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Volume 24 No. 176
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Disney-Fox Notebook: Deal Seen As Counterattack By Media On Tech Companies

In N.Y., Brooks Barnes in a front-page piece writes Disney's acquisition of Fox assets would make the company a "colossus unlike anything Hollywood has ever seen" and is the "biggest counterattack from a traditional media company against the tech giants that have aggressively moved into the entertainment business." Analysts said that the acquisition would "likely prompt other entertainment companies to join forces as a competitive maneuver." Speculation "immediately surrounded Viacom and CBS, which share common ownership; Lionsgate, which owns Starz; Metro-Goldwyn-Mayer, which controls rights to the James Bond franchise; and Sony Pictures Entertainment, which has struggled with low box office market share" (N.Y. TIMES, 12/15). Sanford C. Bernstein analyst Todd Juenger said that the deal is "bad news for the sector -- in particular Viacom -- if a giant like Disney viewed itself 'too small'" (HOLLYWOODREPORTER.com, 12/14). The HOLLYWOOD REPORTER's McClintock, O'Connell & Kit wrote potential industry "winners" from the deal "are the independent production houses" like Sony Pictures and Warner Bros. (HOLLYWOODREPORTER.com, 12/14).

HITTING THE TARGET? The WALL STREET JOURNAL's Elizabeth Winkler noted Disney "remains a quintessentially American company." Following the deal, Disney will be "much more a citizen of the world." Sources said that talks surrounding the deal were "initially sparked by Disney's interest" in U.K.-based TV provider Sky (WSJ.com, 12/14). ADWEEK's Jason Lynch noted buyers are "intrigued by Disney’s markedly improved portfolio, and are optimistic the merger could accelerate some of the audience targeting innovations the industry has been clamoring for" (ADWEEK.com, 12/14).

PRESIDENTIAL BLESSING: CNN MONEY's Tom Kludt noted the deal has "earned the blessing" of President Trump. White House Press Secretary Sarah Huckabee Sanders said, "This could be a great thing for jobs." Needham & Co. analyst Laura Martin added that "job cuts are inevitable in the short term as the two companies work to consolidate their holdings." Martin: "(The combined company) won't need a lot of the corporate overheard, or two distribution arms in Italy" (MONEY.CNN.com, 12/14).

NOTES: DEADLINE's Dade Hayes takes a "brief walk down media memory lane," detailing valuations and outcomes of the "biggest all-time deals" in media (DEADLINE.com, 12/14)....Kelly Newman Ventures CEO Mike Kelly said, "He who has the most content wins. From Disney's point of view, you've got to get bigger and you've got to own more content" (L.A. TIMES, 12/15)....The deal could "also bring diversity to Disney, where every business division is run by a man." Fox has a "sizable roster of female executives" (N.Y. TIMES, 12/15)....Disney Chair & CEO Bob Iger "could receive as much" as $142M worth of stock under a new agreement he signed along with his company's deal to acquire Fox assets (WSJ.com, 12/14)....Disney will pay $2.5B if the transaction is blocked by regulators as part of a "termination fee outlined in the deal" (HOLLYWOODREPORTER.com, 12/14).