Disney is all set to give away Sky to Comcast so that they can buy Fox

Disney is all set to give away Sky to Comcast so that they can buy Fox
Disney logo, Sky network logo, 21st century fox logo (Source : Official websites)

Things are changing fast in the world of Disney and by that we mean they're changing in the business side of things. A source close to the famed company told The Hollywood Reporter that at one point, Disney CEO Bob Iger said that Sky was a "crown jewel" but he might have to give up the European network.

This is all being done so that Disney can buy majority stake in 21st Century Fox before Comcast gets in the way and ruins everything.

The proposal that was put forward by Disney included the 39% interest that Fox has in Sky. It's being said that by the time any kind of Disney-Fox union takes place, Fox may end up owning all of Sky and not just the 39%. This will not come in the way of the deal, however, so Iger isn't too worried.

Comcast, in the meantime, is allegedly putting together a cash offer of almost $60 billion for the exact same assets of Fox that Disney has agreed to buy for $52.4 billion. The company has also thrown a small wrench in Disney's plans by offering to buy all of Sky for $31 billion. The plan for Disney now is to make everyone happy by trying to get Fox to give Sky up to Comcast while also convincing them to merge with Disney themselves.


According to what we know about the situation so far, Disney will be able to do away with almost $12 billion in debt, when the partial merger with Fox comes through, if Comcast takes over Sky. This could end up being a good thing for Disney and give them more leverage if they have to outbid Comcast in the future.

Comcast's goal is to expand in the international market and Sky is the best company for them to do this while Disney wants to have complete control of the domestic market and they basically want to annihilate streaming services like Netflix.

Disney as a company is already dominating the charts because they have Star Wars, Marvel and Pixar under their wing. If they are able to buy Fox's Avatar, X-Men and Planet of the Apes franchises, they will become the biggest and most fearsome studio to have ever been in Hollywood.

Disney will release it's own streaming service next year and this will be a direct competitor for Netflix. Iger said that their streaming service will exclusively have Disney content and the content of Fox after the merger goes through. The content on their site will not be found anywhere else and this could prove a bit difficult for Netflix to beat.


Disney also plans to add Fox's bit of Hulu to what they already have in their hands. Iger said on May 8 that any inappropriate content that Disney has to put out there will be streamed through Hulu and not the Disney streaming service.

Fox is currently in the vice-like grip of Rupert Murdoch who has grand plans of becoming one of the largest shareholders of The Walt Disney Company. If the deal between Disney and Fox goes through, Murdoch will end up owning 5% of the $153 billion net worth company. Murdoch allegedly liked the deal with Disney better than Comcast because the former offered him payment in stock while the later wanted to give him cash which would have had more tax liability.  

Brian Roberts, the CEO of Comcast, will end up being a winner regardless of what happens because his company will be getting Sky and most of Fox. The possibility also remains that Comcast could get all of it. Even if Roberts' company doesn't get anything out of these deals, he would have at least succeeded in pushing the prices up for Disney to pay for the assets they seek.


BTIG analist Richard Greenfield speaks of the situation saying: "Is there any scenario where Disney would proceed with Fox, but allow Comcast to assume majority control of Sky? We continue to believe Sky is critical to Disney's direct-to-consumer ambitions and international expansion."

On the flip side, RBC Capital Market's Stephen Cahall said that Fox is "quite important to Disney" while also saying that Sky is "less so". 

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