When Disney announced their massive $52 Billion acquisition of 21st Century Fox, I had a hunch that there would be rough waters ahead with federal regulators. Now there's talk that the deal may not go through based on how AT&Ts bid to take over Time Warner is going. And with it, Comcast is emerging as a likely replacement. But won't that offer the same problems?
The issue is revealing the coalescing of the industry as major corporations continue to buy one another. Concerned, the US Department of Justice has taken the move block AT&T's Time Warner merger based on anti-trust concerns. The feds did something similar when the wireless carrier attempted to buy T-Mobile several years ago. That proved to be a very expensive misstep on AT&Ts part.
“Disney is already preparing itself for a Comcast topping bid and considering responses in case, according to multiple
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The end result of which, could ultimately have an impact on Disney's merger with Fox. It also means that Comcast may emerge as an unlikely player in the whole mess. CNBC reports that Comcast may be preparing to become a competitive suitor for Fox, and a bidding war could erupt. "Comcast executives suggested to [Fox founder Rupert] Murdoch last year they would be willing to pay significantly more for Fox's assets than what Disney was offering," the report says.
CNBC also says that being fearful of regulatory concerns by the federal government, Murdoch opted for Disney's offer. But my question is, would there really be that much difference between the two? Comcast, which had abandoned its own effort to buy Time Warner, owns Universal Studios and NBC's broadcast and cable networks. It's also a silent partner in Hulu's streaming network. That sounds pretty similar to Disney to me. Granted, Disney's reach is probably bigger from a theme park perspective, but not by much, as Comcast is a dominant player in the cable
On 28 January 2011, Comcast Corporation succeeded in acquiring NBC Universal Inc which was previously managed by General Electric Company (GE) which is an American multinational conglomerate corporation.NBC Universal, ,Inc was formed in may 2004 when it decided to merge with Vivendi Universal Entertainment which was a leading media conglomerate in the entertainment industry. NBCU has a large and leading networks, it is diverse and includes universal pictures, Universal studios and Illumination Entertainment. Before Comcast bought 51% of NBCU, 80% was owned by GE and 20% owned by Vivendi Universal. NBC Universal is the best piece of the media eco system
Disney is the epitome of children’s entertainment. Disney serves as one of the largest sources of
Television, the phone, and the internet. These inventions have uniquely shaped the 20th century and have led to the 21st century being known as the age of information. These services are the primary ways we communicate, express ourselves, and reach out in our ever increasing global world. In the United States, these services are provided by a number of different firms, chief among them is Comcast, being the largest provider of Cable and internet in America, and a large telephone provider. Next to it stands Time Warner Cable, the second largest provider of cable in the United States. The decision for Comcast to buy Time Warner Cable for forty-five billion dollars in 2014 has led to many criticizing the merger, calling it a monopoly. Others have called the whole cable system an oligopoly. For it to be a monopoly or an oligopoly, it would have to fit their respective categories. The merger between Comcast and Time Warner Cable would not create a true monopoly, but would give it significant market power because it has monopoly resources and can be considered a natural monopoly. It will also further its power in a market dominated by oligopolies. People argue that it is not a danger to Americans for this merger to happen, but when one looks at the practices Comcast already uses, it paints
It allows opportunities to combine the performance of certain activities, thereby reducing costs and capturing economies of scope. This is done by acquiring IP that is underexploited or unused by the owner. They have opportunities to transfer their skills, technology, or intellectual capital from on business to another. This is yet again done through media networks, parks and resorts, and also their studio entertainment. All of which allow them to go globally. Along with the opportunity to transfer skills and technology, they can use their brand name across multiple product or service categories. This is seen in the multiple IP networks, studio entertainment, multiple resorts and parks that are all around the world, and lastly, in their consumer products that were ranked number one in 2011 for being the largest licensor of character-based merchandise in the world. Value chain match-ups seen in primary activities are inbound logistics, operations, outbound logistics, the marketing/sales, and service. All lead to support activities such as technology, human resources, and general administration. Opportunities for skills transfer is seen in the media networks, parks and resorts,studio entertainment, and consumer products. Disney Company can share iconic Marvel characters in their parks/resorts, movies, and consumer products, due to buying the IP to Marvel and it does not stop at just Marvel ABC and ESPN are also involved.
In fact, some of the biggest threats to the company’s growth are the government’s regulation that increases the risk to the underlying business. In addition, the risk of losing the exclusive contract for the iPhone would be a major loss for AT&T. Most of the consumers choose AT&T because of their exclusive contract for the iPhone. Hence, this loss of business will significantly influence the AT&T's profitability and revenue. Moreover, the antitrust authorities play an important role on approved the merger of AT&T.
The entertainment industry holds the immense potential for growth and development. The industry is constantly evolving and Walt Disney emerge as a global leader and recognized as the world’s second largest media conglomerate in the terms of revenue after Comcast. The Walt Disney Company is a multinational entertainment conglomerate headquartered at California, United States. The company integrated its products into five target segments are as follows: (1) Media Networks (2) Parks and Resorts (3) Walt Disney Studios (4) Disney Consumer Products (5) Disney Interactive. The company has strong diversified product portfolios and generate high returns and revenues from all the target segments but the media networks contributes
Years later, the Telecommunication Act of 1996 triggered dramatic changes in the competitive landscape. SBC Communications Inc. established itself as a global communications provider by acquiring Pacific Telesis Group and becoming the new AT&T. The merger of AT& T and BellSouth, along with the ownership consolidation of Cingular Wireless and YELLOWPAGES.COM, will speed convergence, competition and continued innovation in the communications and entertainment industry, creating new solutions for consumers and businesses and positioned to lead the industry in one of its most signifi...
What’s more, Disney also needs to recognize which businesses have long-term growth potential and which have not. Hence, Disney also has to divest in businesses which are unprofitable or have no long-term growth potential.
I reason, the idea of their conglomerate is referable to a monopoly. Disney can actually control every aspect of the creation process to the marketing process of a product. For example, Disney’s most recent film Star Wars was a box office success and part of its success is due to the conglomerate that Disney’s. Everything from airing commercials to promoting products or services on its networks and websites is feasible, in regards to their structural network/conglomerate. The concept of media integration and cross promotion Disney has it down to
Second chance given when people made honest mistakes or fail, but Robert Iger has zero tolerance to those who loss their integrity, break the law or lapse of judgment. By establish ethics for the company's employees, they can prevent the scandal and negative news which will damage the company's image and profit. Beside that, Robert Iger himself also take risks and chances all the time. He oversaw the acquisition three of the entertainment industry greatest storytelling companies in the world, Pixar (2006), Marvel (2009) and Lucasfilm (2012). With combine with latest technologies, Mr Iger has made Disney the industry leader through its creative content offering across new and multiple
Michael Eisner, former CEO of Walt Disney Company strained several important relationships to the company because of his abrasive style and tendency toward micromanagement. During his 22-year tenure at Walt Disney, ex-CEO Eisner fought with the Miramax founders Harvey and Bob Weinstein over financial details relating to the purchase of Miramax. Eisner bumped heads several times with Steve Jobs who was then CEO of both Pixar and Apple Computer. The negative remarks Eisner made in front of Congress about Jobs Apple Computer was taken so personally that Jobs threatened to not renew the Disney-Pixar partnership if Eisner was still CEO of Disney. As well Eisner’s continuing disputes with Board of Director members Disney and Gold was that of disruptive behavior. For several years the long-standing board members repeatedly called for Eisner’s resignation.
On December 14, 2000, the Federal Trade Commission approved the planned merger of AOL and Time Warner after both companies pledged to “protect consumer choice” both now and in the future. The AOL Time Warner merger was approved by the Federal Communications Commission on January 11, 2001, and is the biggest merger in corporate history, then estimated at a total market value of $350 billion. The merger created a ‘powerhouse’ of new and traditional media. AOL Time Warner has led the union of the media, entertainment, communications and Internet industries. Throughout the years the face of media and entertainment industries has changed drastically as a result of increased technology. The popularity of newspapers gave way to other forms of media and entertainment such as magazines, television, cable, music, and most recently the Internet.
In conclusion, Disney appears to be a very strong company financially. They do not have any major red flags. Their liquidity ratios and other information does not seem to be alarming in any way. They have been around for many years and are extremely successful, so any obstacle in their way will not be an issue. They will be able to work through it and bounce back from it without a problem.
Disney currently owns the following properties: Marvel Entertainment & Studios, Lucasfilm, ESPN Inc., ABC Entertainment, Pixar, A&E Entertainment, and 30% of Hulu. Trust me this is only scratching the surface and I didn’t even mention the Themeparks and their own library and properties. So what would happen if Disney took over 21st Century Fox? They wouldn’t be a monopoly overnight but it would raise a serious discussion.
Through the ratio analysis, we can conclude that Disney is a stable company, keeping up with industry trends and up to par with industry averages. Although at times it can seem that Disney is a risky and unstable company, those conclusions are false since the unstableness has come through decisions which will better establish Disney’s position on the market. Although Disney’s competition, namely CBS, is on a similar standing as Disney when comparing ratios, Disney will manage to remain the largest media conglomerate in the USA and one of the best corporations in the world.