U.K. Regulator Mandates Disney Into Sky Takeover Offer

The Panel on Takeovers and Mergers, a U.K. regulatory board, April 12 ruled the Walt Disney Co. be forced to match Fox’s $14.4 billion cash offer for British pay-TV service Sky should its $52.4 billion acquisition of select 21st Century Fox assets succeed. Fox currently owns 39% of the satellite TV operator.

The panel mandated Disney pay 10.75 pounds ($15.22) per Sky share, which is equal to Fox’s bid in 2016 for outstanding Sky shares currently held up in regulatory limbo.

Disney, which initially said it wasn’t interested in acquiring the remaining stake in Sky, has agreed to the ruling, according to The Takeover Panel.

While the ruling affords Sky investors a guaranteed Sky buyer should Fox’s bid fail, the markets remain key on Comcast’s Feb. 27 stated desire to bid more than $31 billion for Sky – which represents a 16% premium on the Fox bid. Comcast is also mulling a potential rival offer to Disney for 21st Century Fox assets.

Fox, in a statement, said it remains committed to its cash offer for Sky, which is supported by revised remedies recently offered to the Competition and Markets Authority (CMA) with whom Fox has been co-operating in order to bring the U.K. regulatory process to a “swift and satisfactory” conclusion.

 

Redbox Counters Disney With Amended Lawsuit

The day after the Walt Disney Co. filed an amended lawsuit against Redbox alleging copyright infringement, the kiosk vendor countered with its own amended litigation.

The suit, filed April 10 in Los Angeles District Court, accuses Disney – and new co-defendant Anderson Merchandisers LLC – of copyright misuse, false advertising, unfair competition and “tortuous interference” regarding its ability to sell digital codes included in Disney packaged media combo packs.

Redbox is seeking antitrust treble (“triple”) damages and injunctive relief against Disney and Anderson Merchandisers.

The kiosk vendor said it filed the countersuit following a Feb. 20 federal court ruling that both denied Disney a preliminary injunction against Redbox and found Disney committed copyright misuse on 20 of its most recent movies.

Disney alleges that the digital codes included in combo packs cannot be sold separately. It filed initial litigation against Redbox last November. Redbox is selling the codes at a significant discount to the retail cost of standalone digital purchases on third-party platforms.

“Disney wants to eliminate low-cost options like Redbox in order to force consumers to pay as much as possible for Disney’s content, even after Disney has already been fully compensated when it first sells that content to a distributor or retailer,” read the complaint.

Redbox said Disney has not only failed to correct its false advertising to consumers but has doubled down on its unlawful campaign against Redbox with the home video release of three recent titles: Coco, Thor: Ragnarok and Star Wars: The Last Jedi.

“Incredibly, Disney complains that consumers may believe these titles, as well as [upcoming] Black Panther, are somehow inferior to those of other studios simply because Redbox offers them at low prices,” read the complaint. “We look forward to advancing our case to an ultimate victory in court.”

 

Fox: Disney Could Buy Sky News Separately

Media giant 21st Century Fox April 3 floated the prospect The Walt Disney Co. could acquire Sky News in an independent deal to assuage British regulators in its $16 billion acquisition for the remaining 61% stake of the European satellite operator.

Disney’s acquisition of Sky’s news division would be separate from its $52 billion acquisition of 20th Century Fox Film Corp., which includes the corporate parent’s stake in Sky, according to The Wall Street Journal. Fox chairman Rupert Murdoch owns The Journal.

British regulator Competition and Markets Authority (CMA) in January issued a report critical of the merger, claiming Murdoch’s majority ownership of Sky would place too much (i.e. conservative politics) control of British media in hands of one person.

Fox contends selling Sky News to Disney (which owns ABC TV) should alleviate regulatory concerns. It has also pledged 15 years of guaranteed funding for the news division.

“The enhanced remedies we proposed to safeguard the editorial independence of Sky News addressed comprehensively and constructively the [CMA’s] provisional concerns,” Fox said in a statement.

Regardless, Fox faces competition from Comcast, which has submitted an unsolicited $31 billion bid for Sky – nearly twice that of Murdoch’s offer.

Comcast, which owns NBC Universal and DreamWorks Animation, is eying Sky for its European distribution plans. Comcast in 2004 attempted a hostile takeover of Disney, which was scuttled by the latter’s shareholders. Comcast also reportedly offered a 15% premium on Disney’s bid for 20th Century Fox, which was rejected by Murdoch over U.S. regulatory concerns.

 

ESPN+ Streaming Service Launching April 12

ESPN+, Disney’s much-anticipated first standalone over-the-top video service, is launching April 12, priced at $4.99 per month. ESPN+ will be an integrated part of a redesigned ESPN App, also available through ESPN.com.

“ESPN was built on a belief in innovation and the powerful connection between sports and a remarkable array of fans. That same belief is at the heart of ESPN+ and the new ESPN App,” James Pitaro, president and co-chair, Disney Media Networks, said in a statement.

The OTT platform is the first direct-to-consumer service offering from Disney Direct-to-Consumer and International, the newly-created multimedia unit created by Disney’s Media Networks and Studio Entertainment groups.

A Disney-branded direct-to-consumer service, offering SVOD viewing of Disney, Pixar, Marvel and Lucasfilm movies along with a host of exclusive content, will launch in late 2019. Both streaming services are powered by BAMTech, a unit of Disney Direct-to-Consumer and International.

“The launch of ESPN+ marks the beginning of an exciting new era of innovation for our media businesses – one defined by an increasingly direct and personal relationship with consumers,” said Kevin Mayer, chairman, Direct-to-Consumer and International, The Walt Disney Co.

The ESPN+ programming lineup will offer four key pillars of content: live sports events, original shows and films, exclusive studio programs, and on-demand content. Additional details about content in the ESPN+ programming lineup will be announced in the coming days.