The REAL Reasons Why Everyone’s Bidding On Fox
Dear Rundown Reader,
There are few industry landscapes as cutthroat as big media’s right now.
Streaming services and the cord cutting trend have forced to the big boys to completely reevaluate their positions.
Which is why they are working furiously to consolidate.
The old adage, if you can’t beat them join them, never rang truer.
But there’s a few key things at the cusp of this that few are talking about.
And they’re the real reasons why everyone wants Fox.
And it’s why whoever does has a real shot of battling Netflix.
Today’s Rundown breaks down what you need to know.
Your Rundown for Monday, June 18, 2018…
Precedent Set… Now What’s Next?
In case you missed it last week, the DOJ’s efforts to stop AT&T’s (NYSE: T) purchase of Time Warner Inc. (NYSE: TWX) fell flat.
We could say the ruling was expected.
The last time the DOJ successfully stopped a vertical merger like this was during the Carter era.
And while not surprising on the Street, the ruling does set sweeping precedent for big media moving forward.
Here’s what you need to know.
The AT&T / Time Warner deal is done.
Now the focus is on Comcast’s (NASDAQ: CMCSA) bidding war with Disney to acquire 21st Century Fox (NASDAQ: FOXA) assets.
Whoever wins will have a huge edge moving forward.
Disney originally offered an all-stock deal worth $52.4 billion, as reported by The New York Times.
Comcast’s new offer is even larger at $65 billion. And is an all-cash offer, as reported by the Times.
Shares of Fox (NASDAQ: FOX) were up over 12% to close out last week.
The Fox assets in play, according to CNBC “include movie studios, cable networks, stakes in a European pay-TV provider and streaming service Hulu, and regional U.S. sports networks.”
Whoever gets Fox, gets Hulu and that’s big.
It’s a well established service with a wealth of content currently not accessible on Netflix.
Without Hulu a potential deal means nothing.
Another wrinkle is any proposed deal would also include Fox’s 39% stake in Europe’s Sky Network.
And this is where things get really interesting.
Sky has licensing deals with Europe’s most prominent soccer league, including the English Premier League (EPL).
That’s like having the media rights to the NFL or MLB.
And that’s why Comcast, the current U.S. rights holder to the EPL wants Fox so badly.
It’s no secret. Big media needs to build new moats if they want to survive.
And the Fox deal is crucial to this.
Now, turning to the markets this morning…
Market Rundown for Monday., June 18
Yield on the 10-Year Treasury sits at 2.911% this morning, down 0.013.
S&P 500 futures are down 19.25 to 2,765.
Oil’s up $0.11 at $65.17.
Gold’s up $3.80 to $1,282.
Bitcoin goes for $6,432 this morning, according to CoinDesk.
We’ll talk again on Tuesday.
For the Rundown,