Disney, Fox Are in Talks to Complete Major Merger in Entertainment Industry

The logo for Walt Disney Pictures.

Image: Dean Bertoncelj / Shutterstock

Two of the biggest names in the entertainment industry are preparing to team up. According to the Financial Times, executives at Disney and 21st Century Fox have revived talks regarding a major merger in which Disney would purchase around $50 billion worth of Fox’s international and entertainment-related assets. This would include the company’s 39 percent stake in the pan-European broadcaster Sky.

The negotiations have been largely focused on Fox’s movie studio, its cable channels such as FX, and its international business holdings, including both Sky and Star of India. Analysis from MoffettNathanson has indicated that the total value of the assets sold would make up a significant percentage of the company’s $60 billion total value.

“Disney would gain more scale in TV and film production [and] cable networks, as well as adding its own distribution angle while accelerating its [direct to consumer video] strategy,” the MoffettNathanson analysts wrote in a research note.

For Fox, this potential blockbuster move comes at a tricky inflection point in the company’s history. Fox is separately working to complete a takeover of Sky rather than to merely own 39 percent of the company, but those efforts have run into regulatory trouble. Meanwhile, Fox may still be considering offers from other buyers, as cable TV giant Comcast has also expressed interest in controlling Fox’s entertainment assets.

If completed, this deal would have a major impact on the long-term direction of Disney’s business model. Today’s consumers are increasingly looking to consume TV programming in an “on-demand” fashion, and Disney has been looking for a way to compete with bigwigs like Netflix and Amazon in that realm. Disney is working to develop two new streaming services: one aimed at sports fans and another with more family-oriented programming. Acquiring Fox’s programming would give them a lot more content to beef up those new offerings.

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Better Business Bureau Calls an End to Rob Lowe DirecTV Ads

Unfortunately, the hilarious series of DirecTV commercials featuring multiple different versions of actor Rob Lowe will be coming to an end. The ad campaign will be ending due to complaints by cable giant Comcast to the National Advertising Division of the Better Business Bureau.

So why exactly is DirecTV ending this campaign? The main source of the controversy stems from claims made during these advertisements that DirecTV has better customer service, quality, sound and signal reliability than cable. DirecTV made the following claims that were found to be exaggerated:

  • With DirecTV you get 99% signal reliability
  • With DirecTV you get 99.9% signal reliability
  • With DirecTV you get 1080p picture quality and Dolby 5.1, the industry’s best picture quality and sound.
  • Up to 1080p picture quality
  • DirecTV is #1 in customer satisfaction over all cable TV providers
  • DirecTV is ranked higher than cable for over 10 years
  • DirecTV is the undisputed leader in sports, which means you can watch all the games you want
  • When it comes to sports, with DirecTV, you can have them all.

Additionally, it was noted that the tag line used at the end of these advertisements—“Don’t be like this me. Get rid of cable and upgrade to DirecTV”—conveyed a “comparative and unsupported superiority message.”

However, DirecTV responded to these claims with a statement about the complete lack of seriousness in these commercials. In a statement, they wrote: “the various Rob Lowe advertisements are so outlandish and exaggerated that no reasonable consumer would believe that the statements being made by the alter ego characters are comparative or need to be substantiated.”

If you haven’t seen any of these commercials, they compare the cool, suave, handsome Rob Lowe, who has DirecTV, with comparatively uncool, unattractive versions of Rob Lowe (dressed in a silly costume), who do not have DirecTV and instead have cable. These caricatures include “Crazy Hair Rob Lowe, Painfully Awkward Rob Lowe, Scrawny Arms Rob Lowe, and Super Creepy Rob Lowe.” Check out an example of one of these commercials below.

Comcast to Acquire Time Warner Cable

Comcast

IMG: via Comcast

Comcast has agreed to buy Time Warner Cable in a $45 billion dollar deal combining two of the largest cable and Internet providers in the country. In the all-stock deal Comcast will pay $158.82 per share in the friendly merger.

The move comes as a surprise as last month cable operator Charter Communications offered $132.50 a share for Time Warner Cable, but the bid was rejected. In January, Time Warner Cable Chief Executive Robert Marcus said that a merger with Charter wouldn’t have been a good fit and that he preferred to work with Comcast CEO Brian Roberts.

CNN reports that the two companies expect to receive government approval by the end of the year, but regulators will likely take a closer look at the potential impact on consumers. Time Warner Cable is the country’s second biggest supplier of television service. In markets such as New York City and Los Angeles, there are some 12 million subscribers. Comcast has 53.1 million customers with combined TV, broadband, and phone services combined across the country.

With a potential for improved cable and Internet services for consumers, public interest group Free Press has raised concerns over the deal.

“In an already uncompetitive market with high prices that keep going up and up, a merger of the two biggest cable companies should be unthinkable,” the group’s president, Craig Aaron, said in an email. “This deal would be a disaster for consumers and must be stopped.”

Comcast is also the parent company of NBC Universal, which owns the NBC broadcast network, Universal Studios, and several cable channels. The $17 billion acquisition of NBC Universal was completed in 2013.

Internet Providers Are the Most Hated Businesses in America

comcast-logoDoes that really come as much of a shock? Anyone who mentions having to call Comcast or CenturyLink usually get an “I’m sorry” look from anyone who heard them. There have been countless times I have been overcharged or had my service go out, and it generally takes 30 minutes on the phone to fix the problem – at least. The American Customer Satisfaction Index released its annual report on May 21st, on “key industries that provide data, voice and video services to U.S. households.” This was the first time that ISPs (internet service providers) were included in the report. The survey generally looks at over 50 industries, and takes into account customer satisfaction. 

Comcast had the lowest score of all Internet service providers, with a satisfaction rating of just 62 percent. Time Warner Cable had 63 percent, and CenturyLink was at 64 percent. The Internet service provider industry had an average rating of just 65 percent, with Verizon having the best score out of the bunch, at 70 percent.

One reason many customers hate ISPs is that it is so easy compare ISPs in America to ISPs in other countries. You can see that the exact same deal in New York City costs $200 per month, while you can get it for just $25 a month in Hong Kong. One of the main reasons for this is that these companies hold a monopoly – people only have a couple of options and so they are forced to pay the high prices.

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