On Saturday Comcast won the battle against 21st Century Fox for the buyout of TV media broadcaster Sky after offering $40 billion in a dramatic auction to decide the fate of the European company. Comcast executives say that the buyout of media company Sky, which offers major content and distribution in Europe, Italy, and Germany will boost Comcast’s user base to 53 million; assisting in the innovation of new programming and technology advances. Comcast being a U.S. company will now have the opportunity to diversify its revenue streams worldwide which will assist the company is staying strong amid the rise of new competition from streaming services. Fox entered into the bidding race back in December of 2016, but after almost 2 years of negotiations a deal was finally agreed upon on Saturday.
After three rounds of bidding, with the final round having neither side knowing the other’s bid, Comcast’s offer of $22.60 a share at a total of $40 billion easily surpassed Fox’s highest bid when the results were announced. A win for Comcast is not just a loss for Fox, but ultimately for entertainment giant Walt Disney; which probably would have been Sky’s real owner. Disney earlier this year, agreed to a $71 billion dollar deal to buy most of Fox’s film and TV assets, including its existing 39 percent stake in Sky, making a win for fox a major priority for Disney. Back In July, Comcast lost out to Disney in that bid for Fox’s assets, but it seems now the tables have turned. If Fox had won the weekend’s auction for Sky, Disney would ultimately have taken full control of company. Instead, attention will now turn to whether Disney will sell the 39% stake in Sky to Comcast or hold onto it.
Comcast CEO Brian Roberts planned to acquire Sky as a way to help counter declines in subscribers for traditional cable TV in the U.S. market. Many conventional cable viewers have been drawn to switch to video-on-demand services. These streaming services have become huge competitors to big name cable companies as many people look towards cheaper media options. Heavily funded companies such as Netflix and Amazon have been investing deeply into media production and streaming rights; even Disney plans to begin their own streaming services by the end of the year. Comcast now must convince investors on both sides that it did not overpay for the merger and that the deal will accelerate growth for both companies. Many investors are concerned that stock projections will be uncertain and that their investments may be in danger of being lost. Comcast has given its shareholders until mid-October to accept the new offer. For now however, Comcast seems to be ready to embrace its new responsibilities and usher in a new wave of users.