Fox/Disney merger deal update

Previously I have stated that we, particularly the MCU fanboys, should wait until all the dust have settled before discussing the potential inclusion of characters from X-Men and Fantastic Four franchises, at least there are a couple of news that has been reported in the last few weeks may be seen as “good news” for some, yet the betting war may still be continuing by others. Business news websites such as Bloomberg, CNBC and Forbes have been reported that US Justice Department has green-lit the deal while Comcast has decided to drop the bid against; those same reports also reported that while Comcast may have to forego the Fox assets domestically, the stakes of British Sky Broadcasting may still be up for grabs. However, those same reports have also stated that Fox might not increase the bid to BSkyB if Comcast is contemplating in focusing the latter. So, one might be thinking what all of those things mean for the MCU; however, I beg to differ by stating there are more to it than just the MCU by pondering much deeper than just the entertainment aspect.

As condescending or convoluted as it may sounds, the broadcasting rights for the Premier League, the Football League, and Formula One are just as lucrative as the Fox Entertainment, if not more. One might suggest or even question why the European sports needs to be factored in as Fox Entertainment is in the stateside, however, one should also ponder why the Premier League football (or soccer, in the USA) and F1 coverage worth so much more than the National Football League or Major League Baseball by thinking about how Comcast managed to outbid both F1 and Premier League a few years ago that became the genesis of the recent biddings.  When Setanta Sports went bankrupt alongside Fox discontinued its Premier League coverage, ESPN took over the coverage from Fox Soccer/Fox Sports from 2009 to 2013, then NBC Sports picked up where ESPN had left off in 2013 and they have made a tremendous effort in redefining how a soccer (or football) should be presented in sports media.  Rather than leaving most of the games either in time-delay broadcast or merely showing highlights much later in the night, they would either be televised on NBC’s family of network such as USA, Bravo, Syfy, or even the main NBC channel itself, or played/replayed on the NBC Sports apps (later with NBC Sports Gold subscription plan).  In addition, the studio pundits would spend a certain weekend on location for pre-match and post-match shows.  

Just a few months prior, they have also acquired the broadcasting rights of Formula One during the 2013 season and lasted until December 2017; however, the broadcast rights for that deal was rather limited in terms of the overall presentation. For instance, the presentation crew had consisted of merely 5 people, two of whom (David Hobbs and Steve Matchett) were transferred from SPEED Channel, while Will Buxton and Jason Sewell were the only people who had gone to every race in the F1 calendar. Which arrangement would have had reduced the production cost, the presentation itself felt a bit too elementary for the diehards and the racing community at large. That led to the surprise bid from ESPN and took over the rights, in which they opted instead to use the Sky Sports feed rather than doing their own presentation like they and their predecessors had done before, reducing the production cost. Rather than having Bob Vasha doing the introduction in studios, it’s the Sky Sports F1 announcing team who does just about every aspect of the presentation with all the expertise from the likes of former racers Martin Brundel, Graham Hill, and Paul DiResta in racing analysts with Ted Kravitz providing the technological details from the beginning with all three practices until the post-race.

So how’s that being relevant to the topic, you might ask? Here’s my interpretation of the situation, and hope that I’m wrong about this whole bidding war with Disney: Comcast, through NBC Sports, was negotiating an extension deal from the 2018 season and going forward, unfortunately for Comcast/NBC, the current “custodian” of F1, Liberty Media, appointed a former ESPN personnel by the name of Sean Bratches, in the position of F1 Managing Director to run all the broadcasting rights, and due to Braches’ connection with ESPN, NBC, in my opinion, felt that they had been robbed of that deal. On top of that, NBC would love to rake back F1 coverage since they’ve already got INDYCAR, IMSA, NASCAR, Premier League, and Premiership Rugby in England (albeit via a feed from BT Sports).

While the United Kingdom may have been experiencing the aftermath of Brexit, the fact that its dislike of the potential monopoly of British broadcasting media by News Corporations under the “stewardship” of Rupert Murdoch, consider the News of the World phone-hacking scandal and News Corp scandal are still fresh in their minds, never mind their ethical standards in the stateside is equally questionable at best, if not deplorable at worst. Their withdrawal of influence in UK media may or may not be a blessing in disguise as there’s still The Sun and the Wall Street Journal hanging around.

Before I get any further into the bigger question of when this whole affair might see its conclusion, there is one particular matter that I did not include in my previous article and would like to address here. What separates Disney/Fox merger from AT&T/Time Warner is that the latter each operates as media providers in both hardware and contents (i.e., DirecTV/U-verse via AT&T and Time Warner Cable via Time Warner), in addition to the fact that the former is acquiring a specific section that News Corp still has some control of prior to the deal, whereas AT&T is acquiring the entire Time Warner company, which includes the CW Network, Warner Brothers Studios and it’s music division, DC Comics and its subsidiaries, and so forth. While it’s also true that Disney is trying to do the same by acquiring Fox, if you have read the list of contents for the deal, the real “battlefield network” may hinge upon the BSkyB acquisition by either Comcast or Disney instead of Fox Entertainment in the stateside. However, the next 9 days would be the most crucial for Comcast with regarding to their next move, the probability of turning into the most expensive bidding war, henceforth the use of “catchphrase” – for the lack of a better term – “battlefield network”, may still be happening until Comcast Chairman Brian L Roberts makes the official statement of foregoing the counteroffer, as there is the shareholders meeting that still in play with various possibilities might still occur, which including a certain section of Fox shareholders have lodged a complaint with the Securities and Exchange Commission by citing the absence of projections or forecasts for Hulu as well as earnings estimates for European broadcaster Sky in future years, requesting for more information about debt and raises concerns about how a Goldman affiliate was asked to act as an underwriter, placement agent and bookrunner in connection with Fox’s possible incurrence of permanent debt financing amongst the accusations of various securities violation, which could be rescinded with an award of rescissory damages to those shareholders.

Therefore, all I can say, at least in this particular time, is simply, “stay tuned”, and when I get new information as it becomes available, I’ll do another follow-up article for that.

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