by Ray Keating
July 19, 2018
As expected, Comcast announced today that it would be stepping aside in its race with Disney to acquire assets from 21st Century Fox.
In a company statement, Brian Roberts, Comcast’s chairman and CEO, said, “I’d like to congratulate Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company.”
As MarketWatch noted, “Comcast shares have fallen 15% so far this year, while Fox shares have risen 35%. Disney shares have risen 3%, and the S&P 500 SPX, -0.41% has gained 5.3%.” Disney and Fox shareholders are expected to approve the deal on July 27th.
In DisneyBizJournal.com’s analysis of the Disney-Fox deal earlier this week, I highlighted a host of properties being acquired by Disney that present significant growth opportunities for Disney, its shareholders and fans, while also noting some risks, such as regarding the Avatar franchise. That piece concluded: “When sinking $71.3 billion into a venture, it seems obvious to ask: How long will it take Disney to see a return on this investment? Indeed, the ramped up price Disney is paying leaves little room for error in how these assets are utilized. The entertainment business is notoriously fickle, and of course, it will be years before we know if this purchase was a success. In the end, though, given the full set of assets being acquired, it would seem unwise to bet against Disney.”
Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels, with the two latest books being Reagan Country: A Pastor Stephen Grant Novel and Heroes and Villains: A Pastor Stephen Grant Short Story. He can be contacted at firstname.lastname@example.org.