Comcast Corp. dropped its pursuit of 21st Century Fox Inc.’s entertainment assets, clearing the way for rival Walt Disney Co. to acquire key pieces of Rupert Murdoch’s media empire after the two sides dueled in recent weeks.
As The Wall Street Journal reports, Comcast said the company is still pursuing European pay-TV giant Sky PLC. Fox already owns 39% of Sky and is vying to consolidate ownership.
Comcast said it wouldn’t submit a new offer for Fox’s entertainment assets after its earlier $65 billion all-cash offer was topped by Disney, which bid $71.3 billion in cash and stock.
The cable giant’s withdrawal ends a high-stakes chess match among some of media’s most powerful players, as they position themselves for the decline of the U.S. pay TV industry and try to stock up on assets that could help them compete against streaming services like Netflix.
Assuming Disney wins all necessary approvals, it will wind up with assets including the Twentieth Century Fox film and TV studio, a controlling stake in streaming-video service Hulu, and international properties including Star India.
Last week, Comcast raised its offer for Sky, valuing the company at $34 billion. That is a 5% premium to an offer Fox announced earlier and 18% above Comcast’s first bid. Comcast said its latest offer was recommended by Sky’s independent directors.
Disney believes it can wring more value out of Fox’s movie and TV franchises such as “Avatar” and “The Simpsons,” and hopes Fox’s collections of assets will help it launch direct-to-consumer subscription services that can compete against Netflix, which has rapidly become a juggernaut.
Murdoch isn’t selling everything, though. Fox News and Fox broadcast network are among the assets that are being spun off into a new news and sports-focused company the Murdoch family will continue to control.
