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A Walt Disney Co (DIS) Deal For Fox Would Draw A Lot Of Antitrust Concerns

DIS – With Disney reportedly in talks to acquire 21st Century Fox media assets, it pays to examine the inherent antitrust issues such a deal would include.


Walt Disney Co (NYSE:DIS) is intent on expanding its media empire in coming years.

The entertainment giant will launch an ESPN streaming service in 2018, with its own Netflix-like movie and TV streaming service the following year. That probably means it’ll need more content to fill up the service, and an acquisition of some key 21st Century Fox properties could fit the bill nicely.

But as CNN Money reports, such a deal would include a number of antitrust concerns, and could actually hurt consumers:

The Justice Department will consider to what extent the new company could dominate the market, using its increased leverage to force cable companies and distributors to pay higher rates to carry Disney and Fox content.

For example, could the combined company negotiate with Comcast by upping the price for FX, threatening to pull ESPN off the air if Comcast refuses to pay the higher rate? Those are the scenarios regulators will be investigating.

“Combining two entities with major content assets in TV and film would typically raise a high level of concern from an antitrust perspective,” said Jonathan Barnett, a professor of media antitrust law at USC Gould Law School.

A deal to acquire Fox assets is far from done at this point, and Comcast itself is also rumored to be in negotiations with Fox (among other media companies). But the acquisition would perhaps make the most sense for Disney — if regulators will actually allow it.

Walt Disney Co shares closed at $104.23 on Friday, down $1.03 (-0.98%). Year-to-date, DIS has gained 1.56%, versus a 20.47% rise in the benchmark S&P 500 index during the same period.

DIS currently has a StockNews.com POWR Rating of B (Buy), and is ranked #4 of 16 stocks in the Entertainment – Sports & Theme Parks category.

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The day of this event (Dec. 10, 2017)
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