A full-fledged bidding war for key assets of Rupert Murdoch’s 21st Century Fox erupted Wednesday as media and cable giant Comcast announced it plans an all-cash bid that would top an existing offer from Walt Disney Co.
Comcast said it is in ‘advanced stages of preparing’ the offer for the television and entertainment assets Fox agreed to sell to Disney in a $52.4 billion stock deal announced in December.
Comcast, which owns the NBCUniversal media-entertainment group and is the largest US cable operator, said it was prepared to pay more than Disney for the operations, which don’t include Murdoch’s Fox News Channel, Fox Broadcasting and major sports channels.
‘Any offer for Fox would be all-cash and at a premium to the value of the current all-share offer from Disney,’ the Comcast statement said.
Either deal would dramatically reshape the media-entertainment landscape and scale back the Fox empire created by the 87-year-old Murdoch.
Murdoch, who with his family controls 21st Century Fox, agreed to the tie-up in December that would give Disney the Fox studios in Hollywood along with Fox’s international TV operations and US cable entertainment and regional sports channels.
Included in the sale is Fox’s 39 percent stake in the British pay TV operator Sky. Murdoch has sought full control of Sky but has faced opposition from regulators in Britain.
Separately, Comcast last month made an offer of $30.7 billion in cash for Sky, in a move welcomed by the British firm.
Fox ‘committed’ to Disney
Some reports said Murdoch had previously rejected an offer from Comcast. But the controlling family and shareholders would face pressure if the new offer is richer than the one from Disney.
Fox had no immediate comment on the Comcast statement. But in its most recent earnings call, co-executive chairman Lachlan Murdoch said that ‘we are committed to our agreement with Disney’ and that board members ‘are aware of their fiduciary duties on behalf of all shareholders.’
Christopher Hohn – a British investor whose firm, TCI Fund Management, holds a 7.4 percent stake in 21st Century Fox – called upon the group to immediately engage in discussions with Comcast in the event of a formal offer. 
In his letter, addressed to Rupert Murdoch, he added he would support the cable company’s offer.
Analyst Richard Greenfield at BTIG Research predicted last month that Comcast would likely offer ‘a 25 percent premium to Disney’s bid’ in an effort to win the deal, although it would be ‘surely challenging financially’ for Comcast.
Either deal could face intense scrutiny from antitrust regulators because of the implications for the television and cinema sectors.
A tie-up with Disney would create a giant with up to 40 percent of US box office revenues, according to some estimates.
Comcast’s Universal studios is smaller than Disney’s but could vault to the top of the market by adding 20th Century Fox.
Either Comcast or Disney would gain global stature in the TV sector with Sky, the pan-European broadcaster with operations in Britain, Ireland, Germany, Austria and Spain. Comcast operates the NBC broadcast network while Disney owns ABC, and both have multiple cable channels.
Shifting TV landscape
The move comes with Rupert Murdoch gradually withdrawing from the empire he built.
The group announced last week that his son Lachlan Murdoch would assume the role of chairman and chief executive at the ‘new’ Fox, which would be tightly focused around the Fox News Channel and sports cable channels.
The consolidation in the sector comes with traditional operators facing pressure from online and tech platforms including Netflix and Amazon, which are shaking up the model of pay TV delivery as well as the studio system for content production.
Another pending deal that would join telecom and broadband giant AT&T with media-entertainment group Time Warner is being challenged by the US Justice Department in an antitrust suit. A judge is expected to rule in that case next month.
Brian Wieser, a media analyst with Pivotal Research Group, said nothing is likely to happen until the regulatory environment is cleared up with AT&T and Time Warner.
‘If AT&T/Time Warner doesn’t happen then Comcast-Fox doesn’t happen,’ Wieser said.
Daniel Ives of the research firm GBH Insights said he expected a pitched battled for ‘these golden entertainment assets of Fox’ as traditional media groups gird for competition against streaming and tech firms.