Comcast Wants To Buy Disney For $66 Billion

BenBenBen writes "Comcast have made a surprise $66 billion bid for Disney. The public bid (aimed at swaying shareholders) follows a period of secret negotiation which resulted in Eisner saying no. Comcast has a statement on their website and there is better coverage available here."

Comments

Hostile takeover?

[jaf]

Curious.. is this what's called a hostile takeover?

Re:Hostile takeover?

[PunkPig]

So Comcast buys Disney, keeps all of Disney's TV properties (ABC, ESPN, etc), and sells Pure Disney (Mickey, theme parks, etc) to Pixar+Roy Disney.

Re:Hostile takeover?

[AlecC]

Because that $66 billion doesn't really exist: it is just the hypothetical price tag on the assets which the buyer is offering the shareholders of the company they want to buy. Much of it is probably new stock of their own which they intend to print to give the shareholders they buy out. If bidder and target are both trading at $10.00, the budder may be offering 13 of their shares for 10 of the originals. You can set a stock market price on these shares, but you couldn't eactually get the money out of the stock market: if you tried selling that many shares the stock price would plummet.

There is often a cash element in the offer: but that cash is usually borrowed from banks secured against things the buyer owns, and needs to be paid back.

The stock market only works because the money goes round and round. Someone who makes a killing on the market doesn't take the money out in greenbacks. Either they re-invest it, or they deposit it in a bank, which reinvests it, or they buy things from people who reinvest it.

the whole financial system is a giant lie which we have all agreed to tell each other. You cannot take more than a certain amount out of it, or the Emperor will be revealed to have not clothes and the whole system will fall.

Re:Hostile takeover?

[The Original Yama]

" Heck, Bill has NEVER owned more than 50%. He and Paul Allen each had 50% to start with, until they went IPO. "

Not true:

"Bill Gates received 64 percent of Microsoft to Paul Allen's 36 percent, which explains why Gates is the richest man in the world and Allen is only number two or three on the list."

Re:Hostile takeover?

[Anonymous Coward]

Money can do anything, you just need to know how to use it. You say the world is complex, this is true, but all problems can be made to magically disapear with techniques like bribery or just outright hiring a hit.

That would help with the greedy leaders, next you can bring in your own army of teachers, soldiers, doctors, builders, etc. allong with all the materieals they need to build something out of nothing.

Use available resources there, buy anything that isn't available.

It can all be acomplished with MONEY.

you also need a LOT of it, if you kept throwing problems at it, 66 billion would disapear fast... but you could always argue that a sufficiently smart person would plan, plan, plan so she/he could stretch that money so the project would come in under budget.

Money can solve any problem if you know how to use it.

Re:Hostile takeover?

[rueba]

Why can't you just buy the shares?

I have never understood this part.

Why do you have to make a formal request and everything.

More specifically, why don't they just allow you to buy and buy until you get 51% and can kick the current board out?

Whoa

[Animekiksazz]

I didn't think Comcast was that big... nor would I think they'd want to buy Disney. Go buy Pixar or something.

Terminal Entertainment

[DigiShaman]

Does anyone get the idea that maybe the Internet will be used for nothing but pushed intertainment like some glorified TV set? Soon, the Internet may be nothing more then a controlled system by Hollywood and the like. I guess I can look forward to my PC being nothing more then a dumb terminal.

Re:Terminal Entertainment

[*weasel]

I'd have mod'd your post a troll, designed simply to elicit a railing anti-corporate sentiment from the rabid /. crowd. But you got a +5 Interesting so I'll play along.

the Internet may be nothing more then a controlled system by Hollywood and the like

In short: It can't. Not unless the internet topology itself is radically altered.

So long as anyone can post a web server and serve content with a broadcast license or an expensive broadcasting 'vetting' system, they will. HTTP was dominated by the old guard of media because you and I can publish and consume via HTTP entirely without them, and apparently we netizens value such communication.

So unless 'hollywood' buys the entire fiber backbone, all the comsat time, overthrows ICANN, and starts blocking all IP server traffic from publishers it doesn't personally greenlight - nothing can change.

'Push' as a web technology never took off because no-one likes having to consume content at the schedule of a broadcaster. They tolerate it with TV and radio because there was no alternative. With an interactive alternative, push web technology was DOA.

So as long as there is an alternative, Push will be unable to achieve hegemony in any medium. Unless of course, several currently illegal steps are taken by old media.

Re:Terminal Entertainment

[IntlHarvester]

Another good example is Tivo.

I'm not suggesting that it will be impossible to hack consumer electronics -- But when you have 100 competing models, it will be more difficult to find the Pirate ROMs, etc necessary to do things like you see with the XBox.

Besides, only a minuscule number of users actually do the things you are talking about.

Com-who?

[danielrm26]

Comcast buy Disney? Is this a misprint? I'd have thought it would be the other way around. Disney is...well, Disney.

This is like Blizzard buying Nabisco; shows you what I know about these companies. But I imagine many others thought the same about their relative sizes...

Question from non-usa

[selderrr]

from their website, they seem to be a cable provider, but can one of you natives inform us, foreigners, how big comcast exactly is ?`br~ A Disney takeover by a cable company seems rather over-the-top

Re:Question from non-usa

[Tassach]

IIRC, Microsoft is already the largest Comcast shareholder, owning approximately 33% of the company last time I checked. BillG owns another substantial chunk of Comcast stock under his own name, too. I remember reading that all the major Microsoft insiders were investing heavily in cable companies.

Re:Question from non-usa

[cbovasso]

...they also own the Philadelphia Flyers of the NHL and the Philadelphia Sixers of the NBA not to mention the arena they both use.

Good Investment?

[z0ink]

With the death of their traditional 2d animation studio and Pixas leaving is Disney really an investment anymore? I don't think Disney World is worth 66 billion.

Re:Good Investment?

[leifm]

I'd guess they really want the TV properties Disney holds, as a cable company owning ESPN can't be a bad thing.

Comcast == Cable, Satellite?

[Lord of haha]

Anyways does this mean that satelitte users will lose the disney channel then?

Looks like a strange merger to me

[Reinout]

Disney is, of course, well-known. Big company, earning a lot of cash.

For comcast I (I'm from Europe) had to visit their website. Looks like a run-of-the-mill cable company. Telephone, internet and television over standard cable. They're probably big, but big enough to take on Disney...

Perhaps their stock price is way up so they can pay for this with stocks only... Stuff likes this just seems so artificial, just like there 's no real money involved. (Which probably is the case...)

Reinout

Someone should check the facts..

[vpscolo]

"Disney is one of the world's biggest and best known media companies, and is responsible for everything from Mickey Mouse cartoons to blockbuster movies such as Toy Story."

But Pixar made Toy Story, Disney just published it and Pixar have just dropped Disney. Almost like rats (mice) leaving a sinking ship

Rus

Re:Someone should check the facts..

[tinrobot]

Actually, Disney owns the copyright to Toy Story, the characters and the merchandising rights. They own all of the Pixar films to date. If Disney wants to, they could make Finding Nemo II all by themselves.

The deal with Pixar was that Disney owns the films and pays for distribution, the two companies split production costs 50/50, but Pixar only gets 35% of the back end.

No wonder Pixar's shopping elsewhere.

Expansion

[lukewarmfusion]

Comcast is expanding fast - too fast, perhaps. They bought out the AT&T service here in my area. I'm not sure of all the details of that merger/purchase/whatever, but our service went from expensive to holy crap in no time. Also, they're ridiculous about support and customer service. I don't expect them to improve the state of Disney at all if this thing works out for them. Was going to post: If you want to buy Disney, there's a whole store at the mall selling them.

Re:deja-vu^WAOL-Time-Warner all over again

[TopShelf]

The difference here is the cable TV aspect, however. If Comcast buys Disney, which includes ESPN, for example, you can bet that competitors to ESPN (i.e. Fox Sports) will get 2nd class treatment on their systems. If I recall correctly, isn't something like this the case in Philadelphia, where Comcast owns the Flyers, but if you have some other service, you can't get most of their games on TV?

Sounds like way too much to me

[Andy_R]

Given that Disney just lost their main content supplier (Pixar), and are creatively running on empty (Atlantis, Lilo and Stitch, dozens of straight to video cash-in sequels to classics anyone?), this seems like a lot of money for a chain of shops, a few theme parks and a stack of about-to-go-out-of-copyright cartoon characters.

Pixar have shown a start-up can outdo Disney at animation, Universal and Busch have shown the theme parks are cost effective to build from scratch, and the shops are nothing special.

Great for M$

[EmagGeek]

Since M$ owns much of if not a majority stake in Comcast, this is a great way for them to get into a position to dominate media distribution like they've always wanted to... Don't forget that M$ led a drive to make "high definition" television 640x480, which is lower resolution than analog tv, just for their own benefit.

They're salivating over the chance to get their DRM-hooks into a big media company..

What does Roy Disney think?

[ThePretender]

I'm wondering if he will come out with a blazing attack saying that this is even worse for Disney or if he'll support anything that is anti-Eisner.

Re:That blows my own cover now...

[iamsure]

The truly sad part is that Microsoft could buy Disney at the same price, and only have to use $10B in stock. They have roughly $50B in cash available.

In other words, if the price was lower, Microsoft could buy Disney without changing ANYTHING in their business. Zero impact, other than availabl cash.

Thats absolute insanity.

Conflict of Interest?

[Silwenae]

I'd be suprised if the FCC / SEC let this go through. There seem to be too many conflicts of interest in a cable company owning a content creator.

As far as I understand, cable providers pay (and pass on those costs to customers) for channels like ESPN (which just raised how much they charge cable companies because of ESPN-HD, and had some fights with other cable companies about those rates) and having one company who creates TV shows (for ABC and others) and movies (Disney & Touchstone).

Wouldn't Comcast be able to give themselves exclusive content, whether it's a ESPN channel, first run of pay per view movies created by Disney et al, or save on syndication rights on Comcast / Disney run stations? How many times have we seen actors sue over syndication rights when a company like Fox only syndicates to FX? (Or ABC to ABC Family, etc).

And I have a hard time believing that Comcast would pass on those savings (creation & distribution) to their cable customers.

The deal

[salesgeek]

This deal is in response to AOL/Time Warner. Note to Slashdot communtiy: Comcast's internet business IS NOT THEIR CORE BUSINESS - it's a little bitty piece. Selling adds on cable television and collecting monthly checks from subscribers is.
Anyhow: Time Warner has substantial cable assets and substantial content assets. Rupert Murdoch has substantial subscription assets (satellite TV) as well as FOX. See a trend?

This is a me-too deal and in the end it will suck because Comcast will be way to diversified to have a clear direction. What is nice about this deal is that perhaps Comcast can be a catalyst to causing Disney to get on a creative roll again.

Comcast to be a majority shareholder..

[asdf 101]

.. in the merged entity if this deal is / was to go through.

According to the letter on the Comcast website, Comcast would hold a 58% stake versus 42% for Disney shareholders.

hmm..

Re:Comcast and Disney

[m00nun1t]

It's not about how much cash you have. If Disney is a good investment, then investors/merchant banks will provide the money. If the investors/merchant banks believe under the new management that Disney is capable of making enough profit (or ComCast increase their profit enough) to cover the loan, then they will cough up the money.

In the 80's it wasn't that unusual for companies to buy out other companies larger than themselves. Probably still happens today.

Re:AOL/TimeWarner Redux?

[rm007]

Despite the differences between AOL and Comcast cited by other posters in this thread, the basic similarity remains: linking distribution of content with content production. Given the history of the AOL Time-Warner mega-merger, I'd say that your question is quite appropriate. In economics, the theory of the firm (developed by Robert Coase) suggests that functions are taken into the firm to reduce the transaction costs associated with buying in products/services. Transaction costs are those costs over and above the the price of the good/service that a firm incurs when going to the market. These include search and information costs, bargaining costs, oversight costs etc. Evidently Comcast think that they can save money for themselves by owning a major content producer. Whether or not this is true is open for debate -thanks to deregulation and technology (among other things) transaction costs have fallen tremendously in the past decade. This is why so many companies outsource functions (ranging from cleaning and security to logistics, hr and coding) these days. They must have crunched the numbers, but you have to wonder.

I smell M$ dung in the pile somewhere

[sammaffei]

Try this one for size...

Microsoft signs DRM agreement with Disney for content distribution. There have been grumblings that some Disney board members would like to see Steve Jobs as CEO (instead of Eisner). Microsoft would hate to deal with Jobs or doesn't want Disney to switch to an Apple based DRM solution. Microsoft has been a long time investor in Comcast. M$ leans on Comcast to buy Disney and cut Jobs out of the picture.

The Union of the Two Towers...

[Dave21212]

Think about this deal the next time your pay your cable bill, especially if they are a cable monopoly in your area as they are here in Baltimore...
Now I know where all those extra charges are going !

Oh, and then think about getting a dish.

Anyone here feel that Disney+Comcast would be a Good Thing ?

Re:The Union of the Two Towers...

[applemasker]

Unfortunately, not so unusual. In the NY/NJ area, Cablevision is the biggest cable tv game in town and they regularly screw over their subscribers by positioning Cablevision-owned properties on the lineups at the expense of competitors. For example, we get Independent Film Channel (IFC) which is owned by Cablevision, but not Sundance (similar programming, owned by Turner.) MSG Sports Network (Cablevision) is on basic, while YES and Fox Sports are quasi-premium (you need "Basic Plus" or can pay a la carte).

In 2001 when the Yankees did not renew with MSG but instead formed the YES Network, Cablevision refused to carry YES for that entire season because YES wanted to be on "basic" tier (like MSG, Fox Sports, etc.) while Cablevision wanted to charge it as a Premium Channel, like HBO.

Subscribers were the ones who got screwed for that year, while Cablevision just continually hikes their rates, and provides mediocre cable service. Their digial rollout was a complete disaster, too.

The Dolan Family who owns Cablevision also owns the Knicks and Rangers -- both of which have the higest payrolls but are among the worst teams. Thank heavens the Dolans never were able to buy into the Yankees a few years ago like they tried.

Can someone please explain if I can buy telehpone service, natural gas, or electricity from 15 differnet suppliers, why should cable tv be any different?

So will this reduce my cable rates?

[British]

I've got Comcast. From what I understand, ESPN is strong-arming cable companies to include other channels(whether you want em or not) in cable packages, otherwise they terminate contracts. Hence, no "a la carte" package systems for cable subscribers.

If Comcast buys out Disney, hence, ESPN, would I see a reduction in rates since they own them?

What are you going to do next?

[callipygian-showsyst]

You've just won the Superbowl! What are you going to do next?

"We're going to COMCASTLand!

Seriously, I've worked for the Walt Disney Company through thick and thin. I stuck with them when they flushed millions of $$$ down their dot-com debacle (and made me work with usavory characters like Patrick Naughton. I've been laid off (on my 40th birthay) and hired back. They've tried to replace me with people half my age (and wanted me to train them!).

But I've stuck with them because I believed in the "concept" of the Walt Disney Conpany, even if I didn't have complete faith in the current administration. I just liked Disney.

I hope Comcast knows what they're doing!

So let me get this straight

[uberdood]

They have made enough profit to be able to bid $66B on Disney. Gee, anyone else think maybe, just maybe, they could lower the monthly charges and still make a profit?

Re:ATTN Comcast customers

[saden1]

Well if Comcast doesn't care about their customers then why do they give me a nice discount every time I call them and say I'm going to cancel my service? I have done this three times and every time they reduced my rate for cable internet to $30 dollars a month. Every company cares about their customers and if they don't they are bound to tank. I mean, they don't know how much influence a single customer has.

You seem to think that one person can make a difference. I'm one of those people that think a single person can make a difference.

Can you say California Adventure?

[Anonymous Coward]

Because Eisner ruined Disney's good name? Has anyone been to California Adventure? Without a doubt the worst amusement park I've ever been to. Roy Disney hated it and tried to block it but Eisner forced it through, one of the reasons those two hate each other.

Eisner is purely a business man, and an evil one at that. He's concerned only with the bottom line. The Disney family are artists and as of now, there's not a single Disney on the Disney board.

Another reason to hate Eisner, he outsourced Disney computer jobs to India. I seriously doubt Roy Disney, Jr. would have done that, knowing how Walt Disney really did care about his employees.

Disclaimer: I do own Disney stock and really wish Eisner gets fired then burns in Hell and Roy Disney comes back onto the board. I love true Disney almost as much as some of the Linux fanatics here love Linux.

Re:ATTN Comcast customers

[Xeed]

The readson comcast wanted to take Disney over is because with the recent loss of Pixar and the license of all of the muppet characters from Jim Henson, Disney is in a weak place financially, but is really ready to expand with the content and range of their films