US media giant Comcast has potentially set off a round of huge media mergers with its $65bn (£48bn) offer for 21st Century Fox’s entertainment assets.
The cash deal sets up a potential bidding war with Disney, which has made a $52.5bn cash-and-shares bid for Fox.
Rupert Murdoch and his sons, who control Fox, are looking to slim down the company and focus more tightly on news and live sport.
Meanwhile, the world’s biggest telecoms and entertainment firms are battling to seal tie-ups so they can achieve the scale to compete with the existential threat posed by streaming services such as Netflix and Amazon Prime, which already have large subscriber bases and big production budgets.
Comcast’s bid came a day after a US judge cleared the way for telecoms provider AT&T’s takeover of Time Warner, the company behind The Dark Knight and the Harry Potter films. The deal would unite a large catalogue of entertainment assets with the “plumbing” required to deliver it, a strategy that Comcast has already pursued.
AT&T’s bid was scrutinised over concerns it would reduce competition and possibly push up cable prices for consumers. Now that it is free to go ahead, a wave of further consolidation in the industry is expected.
Disney plans to launch its own entertainment streaming platform later this year featuring films from its vast catalogue, including the Marvel franchise and Pixar’s suite of films.
A tie-up with Fox would bulk up that offering with the X-Men films, as well as popular TV shows like The Simpsons and Modern Family.
However, Disney’s move for Fox could still face problems from competition regulators. If the deal were to go ahead, the combined movie studios would account for 45 per cent of worldwide box office revenue, according to analysts at BTIG.
The merger landscape is further complicated by the fact that Disney and Comcast are already fighting over Sky in the UK.
Fox owns a 39 per cent stake in Sky, with the Murdoch family intent on capturing the broadcaster outright. Culture secretary Matt Hancock said last month that he would only allow the deal if Sky News was sold off to ensure adequate media plurality.
At the same time, Mr Hancock cleared Comcast’s rival bid for the 61 per cent of Sky that the Murdoch family doesn’t own.
