Disney/Fox Bid Approved By The Department Of Justice, But Comcast Isn't Done Yet
In the ongoing battle for most of 21st Century Fox's assets, here's another point in favor of Disney. The Department of Justice has officially approved the latest Disney bid of $71.3 billion, as long as the Mouse House agrees to one condition. Learn about that condition below, and find out what moves Comcast is considering.
A Step Forward For Disney
The Wrap reports that The Walt Disney Company has earned the approval of the United States Department of Justice to acquire most of 21st Century Fox's film and television assets, including the 20th Century Fox film studio and its library of movie properties, networks like FX and FXX, Fox's one-third stake in Hulu, and more. There's one catch, though: the DOJ stipulated that Disney has to divest Fox's 22 regional sports networks that it was set to acquire in the deal. But since Disney has already agreed to that stipulation, it appears as if things can move forward again.
There were concerns that Disney having control of those sports networks in addition to their ESPN channels would be a violation of antitrust laws and could give Disney the ability to force cable operators or internet distributors to raise their prices.
"American consumers have benefitted from head-to-head competition between Disney and Fox's cable sports programming that ultimately has prevented cable television subscription prices from rising even higher," Assistant Attorney General Makan Delrahim said in a statement. "Today's settlement will ensure that sports programming competition is preserved in the local markets where Disney and Fox compete for cable and satellite distribution."
What About Comcast?
This approval is a big step forward for Disney in this long-running fight, but now the ball is back in Comcast's court. Last week, Comcast tried to outbid Disney's initial $52 billion bid with their own offer of $65 billion, but Disney came back over the top with a $71.3 billion counter-offer. The Wall Street Journal reports that Comcast is still technically in the game, and the rival company is deciding whether to come back with a "substantially higher offer" or not to extend the bidding at all. If it continues to escalate, Comcast is exploring the option of becoming tied up with other companies or private investors in order to raise enough cash to outbid Disney should the bidding ever reach the $90 billion range. Here's how the WSJ puts it:
A strategic investor could team up with Comcast, taking on the U.S. Fox assets that are in play—including the Twentieth Century Fox studio and regional sports networks—while leaving Comcast with international businesses such as European pay TV giant Sky PLC and Star India.
But Disney and Fox have postponed a meeting that was set to take place on July 10, so Comcast seemingly has some time to take a breath and make a decision about how they're going to approach this. We'll keep you posted when we hear any concrete updates.