Mickey Mouse and Wolverine are close to playing nice, but the deal isn’t done yet. After the Walt Disney Co. and Rupert Murdoch’s 21st Century Fox seemed to agree on a $52.4 billion deal in December 2017 that would give Disney the lion’s share of the movie and television assets from the Fox empire, a challenge from Comcast has slowly but surely cast a shadow over the deal, making the potential mega-merger less certain.
Comcast is reportedly preparing a significant all-cash offer for the Fox assets, according to Variety, and is expected to make the offer in advance of the summer vote by Fox shareholders that will decide which deal to take. The offer from Comcast is likely to take into account the $1.52 billion Fox will have to pay if it pulls out of the deal with Disney at this late stage, while also including provisions for a potential denial of the deal by national regulatory commissions.
This latest offer follows a previous one from Comcast reportedly totaling approximately $60 billion in cash, but the terms of the Disney deal were still more appealing to Fox’s board of directors, who rejected the Comcast offer. It seems Comcast is not willing to give up so easily on its mission to spoil Disney’s big plans — which could include, among many other significant results, a merging of the MCU and Fox’s X-Men universe.
In response to Comcast’s latest offer, Bloomberg has reported that Disney has increased its offering bid to Fox. Disney’s new offer comes in at about $38 per-share of Fox stock or slightly more than $71 billion.
The deal between Fox and Disney would have the latter company acquiring Fox’s movie and TV production company and popular channel Star India, as well as a 39-percent stake in European broadcaster Sky. Disney would also take ownership of a number of Fox’s pay-TV channels including FX and National Geographic. Disney wouldn’t get all that Fox has to offer, however, as Murdoch would still run the Fox News channel, the Fox broadcast network in the U.S., and the FS1 Sports network, as part of a new company spun off from 21st Century Fox.
A deal would also give either Disney or Comcast a majority stake in Hulu, as both companies currently own a 30 percent share, a coup for either media conglomerate, but one that would allow Disney to get a bigger head start in the streaming game as it prepares to launch a few of its own streaming services dedicated to its growing library of content.
The deal with Disney would also mean movies from 21st Century Fox franchises such as X-Men could be exclusively featured on Disney’s upcoming streaming service and, as referenced above, the Marvel superhero properties previously owned by Fox — including X-Men, Deadpool, and Fantastic Four — could be integrated into Marvel Studios’ cinematic universe.
The deal would also make Disney one of the biggest players in sports television. The company already owns ESPN, and it announced in November plans to launch a stand-alone streaming service for the sports network — named ESPN Plus — in spring 2018. With the acquisition of Fox’s broadcast networks, Disney would own numerous local Fox networks that air local baseball and basketball games.
These same elements of the Fox empire would likely go to Comcast if the competing offer is accepted, but industry pundits predict that a deal with Comcast would be under much more intense scrutiny from regulatory agencies, given Comcast’s current media holdings, which include not only a vast cable and internet empire, but also the movie and TV powerhouse NBCUniversal.
Whether Fox accepts an offer from Comcast or Disney, any deal that’s approved will then go to the Justice Department for regulatory review, which could reportedly take a year to complete, but may take even longer given the department’s recent involvement in big media company mergers. The Justice Department sued to block the $85 billion merger of AT&T and Time Warner a year after the two companies agreed on the deal. The department lodged the lawsuit based on its belief that AT&T would use Time Warner’s popular programming to drive up prices for customers.
There’s also the small matter of needing Fox shareholders’ approval for any deal to go through. If either deal holds, and all goes well with the Justice Department and Fox shareholders, the entire entertainment landscape is primed for some big changes in 2018 — and beyond.
Updated June 24, 2018, with news regarding Disney’s latest offer to Fox.