Today, the Department of Justice filed a proposed settlement
of its civil antitrust lawsuit in the U.S. District Court for the Southern District
of New York that would require Disney to sell Fox’s 22 regional sports networks
within 90-days of closing the deal. The
sale of the RSNs would resolve the agency’s competitive harm concerns that a
combined firm could charge much higher prices for cable sports programming. While it is a huge concession, Disney has
agreed to the settlement terms. After all,
in addition to its international assets, Disney gets Fox’s production studios,
cable networks (excluding news, business, and sports), and the 30 percent stake
in Hulu.
In a memo to employees, Fox CEO James Murdoch and co-executive
chairman Lachlan Murdoch acknowledged that, while the “decision is a big step
forward towards the completion of our Disney transaction and the creation of
new ‘Fox’,” the deal is not done yet.
Regulatory approvals outside the United States and stockholder approval
are still necessary.
And, what about the “fly in the ointment”, Comcast? Will Comcast re-enter the fight when all the
momentum seems to be strongly in Disney’s corner, including Fox’s most certain hesitation
in giving up regulatory approval of one deal to chase another? Or, is it time for
Comcast to walk away and consider the acquisition of content from other market
participants (e.g. Lionsgate) or look to make a bid for some of the assets
Disney will need/want to shed? Could
Comcast scoop up the RSNs? Why not? Could Comcast make a move to buy Sky? Why not? As a pay-tv distributor in the U.S.,
the Sky assets make way more sense with Comcast. These alternative, smaller moves may be much
better for Comcast in the long run.
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