COMCAST made a $65 billion bid last Wednesday for 21st Century Fox in what is expected to be the first of many attempts to buy up pieces of the entertainment world after AT&T’s decisive legal victory over the government to buy Time Warner.

The offer sets up a battle of wills between two of the most dominant and deep-pocketed entertainment companies in the world — Walt Disney, which proposed a $52.4bn offer for Fox last year — and Comcast, the nation’s leading cable company which already owns Universal Studios and NBC.

Such merger proposals are unlikely to be the last to be announced in the coming months, given the government’s failed attempt to stop AT&T from purchasing Time Warner, analysts said.

Such merger proposals are unlikely to be the last to be announced in the coming months, given the government’s failed attempt to stop AT&T from purchasing Time Warner, analysts said

The impetus to own content has become even more urgent as technology has disrupted the traditional ways consumers got shows and movies. Americans increasingly are consuming entertainment on their smartphones or over high-speed internet connections. And the coming advent of 5G is expected to accelerate the trend.

That has left cable, telecoms and tech giants urgently searching for premier content they can control, which would make them more immune to shifting technologies. Beyond AT&T and Comcast, Apple, Google and Amazon have all moved into producing or buying original programming.

“We’re dealing with huge companies that have the financial value greater than some countries,” said Mary Ann Halford, a global media strategist at OC&C Strategy Consulting, said of tech giants moving into entertainment. “If [legacy entertainment] companies don’t step up now this could be a death-knell for them the way digital media was for parts of the newspaper industry.”

Whether the moves by all of these companies into each other’s businesses impacts the shows themselves remains to be seen. Many independent producers fear that 21st Century Fox — which produces edgy, award-winning shows such as Shape of Water, which won the Oscar for Best Picture, and Atlanta, the fiercely independent show on FX — would see changes once in the hands of Comcast or Disney.

Fox film chief Stacey Snider, who has been actively pursuing new projects as the days of the studio as a standalone entity are numbered, told The Post earlier this year “I do feel like it’s the end of an era; I’m not sure what the studio will look like after an acquisition.”

Some companies have worried whether the government would block some of these deals, especially those between companies in different lines of business. But such concerns are waning in the wake of AT&T’s win in court over antitrust regulators. Less than 24 hours after the ruling, Comcast announced its offer for Fox.

Its fight with Disney will play out in real time over the week as Fox readies for a scheduled board meeting on June 20 at which the issue will be raised.

The original agreement between Disney and Fox in December called for Rupert Murdoch’s company selling many of its assets, including his film and television studios, National Geographic, a 30 per cent stake in Hulu and its 39pc stake in European cable giant Sky to Disney. Many analysts now expect Disney to raise its offer.

But more than money distinguishes the competing bids from Comcast and Disney. By adding shows like “This Is Us” and movie franchises like “Avatar” to its rich stable of Star Wars, Pixar, and Marvel movies, Disney would gain a commanding position in the entertainment world, enabling it to better dictate terms to theatre and cable companies and entice millions to subscribe to its upcoming streaming service.

Comcast presents a different vision of a media company. It built itself into a powerhouse by becoming the largest cable service provider in the country and then bought up some of the best-known content in Hollywood. In contrast to Disney, it said it could use its knowledge of subscription and distribution relationships with consumers to enhance Fox’s reach.

Comcast desires more content that can help it beef up its own streaming service — possibly via Hulu, in which it would own a majority stake if it won Fox. It also could use some film franchises. And it urgently needs an international presence.

“For Comcast, this is a must-win,” BTIG analyst Rich Greenfield told The Post. “It’s the most landlocked company out there. Fox is its only real shot for it to become a global company.”

Fox has given no hint of where it was leaning. In a statement last Wednesday, the company said it “has not yet made a determination, in light of Comcast’s proposal, as to whether it will postpone or adjourn the July 10, 2018 special meeting of stockholders to consider certain proposals related to the Disney Merger Agreement.” Disney did not respond to a request for comment.

The Washington Post Service

Published in Dawn, The Business and Finance Weekly, June 19th, 2018