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Comcast said to seek Sky ownership in battle for Fox
[NEW YORK] Comcast Corp is interested in seeking full control of Sky Plc, part of the reason it's vigorously pursuing a deal to acquire film and TV assets from 21st Century Fox Inc despite tough competition from rival bidder Walt Disney Co, according to a person familiar with the matter.
Fox's international holdings, including its 39 per cent stake in British pay-TV giant Sky Plc, are compelling to Comcast, said the person, who asked not to be identified discussing private information. Comcast sees Sky's technology as superior to most other pay-TV providers in Europe, much as the US cable giant's X1 platform outshines its competitor's set-top boxes, the person said.
X1 lets subscribers search for movies and TV shows through a Netflix-like user interface and a voice-activated remote control.
Disney is also interested in Fox's assets outside the US, including Sky, which would offer either bidder the opportunity to run one of the biggest pay-TV providers in Europe.
Fox would prefer to sell some assets to Disney in part because it believes that deal would present fewer regulatory hurdles, people familiar with the matter said. But a tie-up between Disney and Fox isn't guaranteed to get an easy pass through Washington, either.
Disney owns the largest film studio and the largest cable sports network, ESPN. Buying Fox's studio and its numerous regional sports networks would make Disney an even larger player in Hollywood and sports broadcasting than a tie-up between Comcast and Fox, potentially inviting greater regulatory scrutiny. Philadelphia-based Comcast, however, is the largest cable provider in the US, and the Justice Department has shown it's resistant to approving deals between big TV distributors and programmers after suing to block AT&T's purchase of Time Warner Inc.
Fox's board would also need to decide whether to own Comcast or Disney shares in an all-stock deal. In the past two years, Comcast stock would have been the better bet. The cable giant's shares have risen 27 per cent, while Disney has dropped 7.1 per cent, during that time.
When Comcast chief executive officer Brian Roberts sets his sights on a deal, he rarely loses. In 2001, Mr Roberts won a bidding war for AT&T Broadband, beating out AOL Time Warner Inc and Cox Communications Inc.
In 2011, Comcast beat out Fox and Disney for rights to air the Olympics. In 2014, Mr Roberts swooped in at the last minute and trumped Charter Communications Inc's bid for Time Warner Cable Inc, catching Charter off guard. Comcast's purchase was later blocked by regulators in Washington, and Time Warner Cable ultimately ended up in Charter's hands.
Mr Roberts met with Fox executive chairman Rupert Murdoch on Monday in New York to discuss the deal, the person said. The Wall Street Journal previously reported on their meeting.