LOS ANGELES_Comcast Corp. has joined the pursuit of Rupert Murdoch's 21st Century Fox entertainment assets, expressing interest in acquiring Fox's Los Angeles-based movie studio, sports networks, cable channels and its vast international operations, according to two people familiar with the move.
The Philadelphia cable company already owns NBCUniversal, so buying Fox's entertainment assets would turn it into a dominant media company in an increasingly shrinking field. Walt Disney Co. engaged in similar talks with the Murdoch family last month, but those discussions broke off.
The conversations with Comcast are in a preliminary stage, according to two other people knowledgeable about the talks who were not authorized to discuss the situation.
Other bidders also appear to be circling Fox, including mobile phone giant Verizon and possibly Amazon.com Inc.
Fox has hired investment banking companies to field interest from the various companies, according to another person who was not authorized to comment.
A Comcast purchase would combine assets from two of the largest media companies. That probably would invite scrutiny from the U.S. Department of Justice, which currently is poring over another blockbuster combination, AT&T's proposed $85-billion takeover of media company Time Warner Inc., which includes HBO, CNN, TBS and the Warner Bros. movie and television studio.
Industry insiders expect the Justice Department to file a lawsuit to block the sale because AT&T has so far refused to divest Time Warner assets, including CNN and other cable channels. What's more, the Justice Department has previously looked askance at Comcast's ambitions to get bigger.
The Justice Department was gearing up to block an earlier Comcast merger attempt _ with Time Warner Cable _ in 2015, but Comcast abandoned that deal.
In August 2016, Comcast completed a $3.8-billion acquisition of DreamWorks Animation, Jeffrey Katzenberg's boutique studio that created hits such as "Kung Fu Panda" and "Shrek." Comcast viewed the DreamWorks Animation purchase as the most efficient way to become a force in animation.
Not every media company can make a play for the assets of Fox, which has a market capitalization of about $52 billion. But with about 25 million customers for its internet and television service, Comcast has plenty of free cash flow to make big-ticket purchases.
Fox appears most interested in retaining Fox News, its broadcast network and television stations. NBC already has two cable news channels, CNBC and MSNBC.
The sources said that combining two movie studios _ Universal Pictures and 20th Century Fox _ would probably not trigger antitrust concerns because the combined studio would control about 30 percent of the domestic box office.
Universal is ranked third, and 20th Century Fox fourth so far this year, behind Warner Bros. and Disney, according to Box Office Mojo.
Comcast has its eye on even more assets than Disney because it is interested in the sports channels. (Disney owns ESPN and probably planned to stay clear of the sports channels to avoid antitrust concerns).
The Fox talks come amid a frenzy of consolidation as media companies race to bulk up to better compete against tech giants Google, Amazon and Netflix that are upending traditional TV business models.
"All media companies should be talking strategically given the changing ecosystem," Wells Fargo Securities analyst Marci Ryvicker wrote in a report Thursday after The Wall Street Journal first reported the talks.
"However, we view the likelihood of any real deal being consummated as being exceedingly low, especially given the regulatory scrutiny over the pending AT&T-Time Warner Inc. deal," Ryvicker said.
Comcast is particularly interested in Fox's international assets, including its stake in European pay-TV Sky and Fox's Star television service in India, according to the people with knowledge of the talks. Of the assets that are on the block, about 70 percent of the revenue comes from international businesses.
NBCUniversal has a much smaller international presence, so Fox's global assets are particularly attractive to Comcast, which is looking for ways to grow its business that also includes broadband internet, cable TV and phone service.
In addition to the 20th Century Fox movie and television studio in West Los Angeles, Comcast is interested in the cable channels such as National Geographic, FX and Fox's portfolio of regional sports networks, the people said. Comcast also operates sports networks, including regional sports channels in Philadelphia, Chicago and San Francisco.
