Jun 12, 2018

Comcast readying Fox bid pending AT&T decision

Photo by Joe Raedle/Getty Images

Comcast is preparing to announce a bid for 21st Century Fox on Wednesday if the AT&T-Time Warner deal is approved, sources tell CNBCand others.

Why it matters: Fox initially rejected a higher bid from Comcast, fearing regulatory hurdles that come with a vertical merger, according to SEC filings. But if AT&T's merger with Time Warner is allowed, Fox may have reason to consider a higher bid from Comcast.

Be smart: Generally speaking, there hasn’t been as much of a regulatory fuss over a Disney merger as there would be over a Comcast merger, and Fox execs have vocalized support for Disney as a merger partner over Comcast. This could be Fox trying to play the cards it’s been dealt.

Some analysts think that even if the vertical merger were to go through, and Fox were to continue with the Disney deal, there could still be some regulatory issues, like the number of regional sports networks (RSNs) Fox would be giving to Disney — which owns ESPN — and the amount of leverage the combined company would have to increase carriage costs on movie theaters.

"We continue to be surprised how little regulatory concern investors have over a Disney/Fox combination given what appears to be an extraordinarily high combined share of box office — IP consolidation is a leading reason for the deal but it appears to leave a problematic concentration of power as Disney would be more than 4x the size of #2 Warner Bros."
Rich Greenfield, Media Analyst BTIG

Disney has already offered, per its merger agreement, to divest regional sports networks if regulators require it. (Comcast owns RSNs, which could mean the same problem would likely exist as a part of a Comcast bid, too.)

  • And John Fithian, President and CEO of the National Association of Theatre Owners, has indicated support for the merger. “So, on a global scale, Disney getting bigger means broader support for the cinema experience in many ways.”
  • Even the DOJ’s antitrust chief Makan Delrahim has said that Fox carved its assets “surgically” to allow for a Disney merger to go through.

Bottom line: Nothing's a sure bet. And no matter what the outcome for the AT&T/Time Warner deal, regulators will still have to evaluate this deal and every other on its own, regardless of precedents set by other similarly structured — but different — deals.

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Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

Japan's Prime Minister Shinzo Abe announced plans to declare a state of emergency and a 108 trillion yen ($990 billion) stimulus package Tuesday, as several governments announced new restrictions amid a jump in cases.

The big picture: The virus is confirmed to have killed almost 75,000 people and infected 1.3 million globally as of early Tuesday, per Johns Hopkins data. Spain has reported the most cases outside the U.S. (more than 136,000) and Italy the most deaths (over 16,000) as half the planet's population is now on lockdown.

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Boris Johnson in intensive care as coronavirus symptoms worsen

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U.K. Prime Minister Boris Johnson is being treated in the intensive care unit of St. Thomas' Hospital in London due to increasingly severe coronavirus symptoms.

What they're saying: Cabinet minister Michael Gove told LBC radio on Tuesday morning Johnson was not on a ventilator. "The prime minister has received some oxygen support and he is kept under, of course, close supervision," he said.

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 1,348,184— Total deaths: 74,834 — Total recoveries: 284,802Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 368,376 — Total deaths: 10,989 — Total recoveries: 19,828Map.
  3. Trump administration latest: President Trump's economic adviser Peter Navarro warned White House colleagues in late January the coronavirus could take over half a million American lives and cost close to $6 trillion, memos obtained by Axios show.
  4. 2020 update: Wisconsin Supreme Court blocks governor's attempt to delay in-person primary voting delayed until June.
  5. States latest: West Coast states send ventilators to New York and other states with more immediate need — Data suggest coronavirus curve may be flattening in New York, Gov. Andrew Cuomo said.
  6. World update: U.K. Prime Minister Boris Johnson moved to intensive care as coronavirus symptoms worsen.
  7. Stocks latest: The S&P 500 closed up 7% on Monday, while the Dow rose more than 1,500 points.
  8. What should I do? Pets, moving and personal health. Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

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