21st Century Fox

Disney triumphs in battle for Fox properties as Comcast drops out of bidding

Cable giant Comcast said it would now focus on acquiring European pay TV operator Sky

PUBLISHED : Thursday, 19 July, 2018, 11:42pm
UPDATED : Friday, 20 July, 2018, 6:27am

Comcast has dropped out of a bidding war with Disney for the prized film and television operations of Rupert Murdoch’s 21st Century Fox, effectively clearing a path to a new landscape in the media-entertainment world.

The cable and media giant said in a statement on Thursday that it would instead focus on acquiring the European pay TV operator Sky, shifting its stand on how it approaches the latest round of consolidation in the sector.

The move effectively ensures that Disney will be able to complete its US$71.3 billion merger with Fox that creates a new powerhouse in the sector while Murdoch slims down his media empire.

“Comcast does not intend to pursue further the acquisition of the Twenty-First Century Fox assets and, instead, will focus on our recommended offer for Sky,” said a statement from the group, the leading US cable operator and owner of NBCUniversal.

Brian Roberts, Comcast’s chairman and chief executive, added: “I’d like to congratulate (Disney chairman and chief executive) Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company.”

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Both Comcast and Disney had been coveting the assets Murdoch put up for sale, which include the Fox studios in Hollywood and important film and television production operations.

The acquiring company would stand to become a dominant force at the box office and in television, with production companies responsible for The Simpsons and Modern Family, and a key stake in the online platform Hulu.

At the same time, a battle has been heating up over Sky, the British-based pay TV operator in which Fox holds a 39 per cent stake.

Disney launched its offer for Fox’s assets in December at US$52.4 billion as Murdoch and his family announced they would reorganise to focus on Fox News, the Fox broadcast network and some sports operations.

Comcast made its bid of US$65 billion in June, aiming to capitalise on what was seen as an easier regulatory path after rival pay TV operator AT&T prevailed over an antitrust challenge to its acquisition of the Time-Warner media-entertainment group.

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Comcast is competing with Fox over the Sky bid, with regulators wary about Murdoch extending his influence in the media field.

Earlier this month, Comcast increased its Sky offer to £26 billion (US$34.3 billion) only hours after Fox raised its bid for the 61 per cent of Sky it does not already own.

Critics say that allowing Murdoch – who owns the major British newspapers The Times and The Sun – full control of the TV channel Sky News would give him too much influence in the UK news business.

To remedy this, Fox has proposed selling Sky News to Disney.

But some reports suggest that Disney and Fox are prepared to allow Comcast to take over Sky if their merger in the US market goes ahead.

The Fox-Disney merger has already received approval from the US Department of Justice, contingent on the divestment of 22 regional sports networks now owned by Fox. Disney already owns the ESPN sports media empire.

The big media-entertainment firms are pursuing deals as they seek to slow the rise of streaming platforms like Netflix and Amazon, and to prepare for the entry into the sector by Silicon Valley giants like Google and Facebook.

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These issues were debated at the antitrust trial over AT&T’s US$85 billion takeover of Time Warner, with the companies claiming that internet-based platforms have an advantage over traditional media corporations because of the data they collect on customers.

Disney, which owns the ABC broadcast network as well as film and theme park operations, has been expanding efforts in streaming and could use the Fox assets to bring in more highly sought content.

What does this mean for Disney and Comcast?

What would a combination of Disney and Fox look like, as well as a combination of Comcast and Sky? Here’s a look at what each company would be taking away if the deals go through.


X-Men, Avatar and other films from Fox’s studios could be added to Disney’s upcoming streaming service, alongside its existing properties, such as the Muppets, Pixar and Star Wars .  

Fox’s film studios would also pair well with Disney’s, particularly Marvel, which was bought by Disney in 2009 and owns the superhero franchise that includes Iron Man and The Avengers. Fox film properties X -Men, The Fantastic Four and Deadpool all originated with Marvel and could be integrated into that vast cinematic universe.

However, BTIG analyst Richard Greenfield estimates the combined studios make up 45 per cent of worldwide box office revenue. A larger studio could use its power to keep its films in more theatres longer and squeeze out rival films.


Fox’s TV productions include The Americans, This Is Us, Modern Family and The Simpsons. Its networks include FX and National Geographic. Modern Family already airs on ABC.


Disney would have to sell Fox’s 22 regional sports networks to satisfy the government’s antitrust concerns, as Disney already owns national sports network ESPN. Buyers haven’t been announced yet.

The regional networks hold TV rights to professional hockey, basketball and baseball games and show hometown sports in several cities, including New York, Los Angeles, Dallas, Cleveland, Detroit and Kansas City.

Theme Parks

Disney has made extensive use of its portfolio at its theme parks in California, Florida and overseas. Disney, for instance, is expanding its attractions related to Star Wars. On the flip side, Disney turned its Pirates of the Caribbean ride into a major movie franchise.

Disney would be able to expand its opportunities with Fox, though theme parks have historically been able to reach licensing deals with rival studios. Comcast’s Universal, for instance, has rides based on Fox’s The Simpsons and Warner Bros.’ Harry Potter. Disney has licensed Fox’s Avatar for its Pandora park within Walt Disney World.


Disney would get a controlling stake in streaming service Hulu. Comcast, Disney and Fox now own 30 per cent apiece, with AT&T owning the other 10 per cent through Time Warner. With Fox’s share, Disney would have a controlling 60 per cent stake.

Disney already plans an entertainment-focused streaming service in 2019, so it could combine that with Hulu or keep them as separate services.


If Comcast’s Sky bid prevails, Comcast would own the European pay-TV operator. Sky operates in Austria, Germany, Ireland, Italy and the UK. It has 22.5 million customers, attracted by offerings such as English Premier League soccer and Game of Thrones.

Disney would get other international properties from Fox, including Star India, a major Mumbai-based media company with dozens of sports and entertainment channels; Tata Sky, an Indian satellite TV provider; and Endemol Shine Group, a Dutch-based media company.