Disney Lines Up Cash to Finance Bid to Buy Fox Studios

The Disney Corporation is setting up direct cash financing in the event that 21st Century Fox requests cash during their upcoming sale negotiations. While Disney was anticipating offering some cash during the deal, sources at the company report that they are likely to offer as much cash as is needed to get the purchase completed.


Currently, both companies have agreed to an offer of 52.4 billion USD. The contents of the sale would include Fox’s movie studios and other entertainment assets. However, Disney is not the only suitor at this time. Comcast is expected to make a bid for Fox Studios as well if some contingencies line up.


There is currently a federal trial going on involving AT&T and their merger with Time Warner Cable. If the federal judge rules in favor of the merger, that will signal that the waters are right for Comcast to begin acquiring other media properties. This is one of the reasons Disney is preemptively bringing cash to the table. They want to be able to counter any pro-Comcast board members who may be more inclined to take their offer.


Insider sources mention that Disney is looking to possibly change the makeup of their offer to Fox Studios. Other sources report that the bid Comcast is preparing to make will have an all-cash option. This can be desirable for a number of reasons. Disney is trying to be more flexible in order to counter Comcast’s potential offers.


One issue that has regulators and intellectuals worried is the fact that this will congregate almost all American media under the umbrella of one company. Whether Comcast or Disney ends up purchasing Fox Studios, the resulting company will be the largest media company in the history of mankind. Commentators have expressed some worry about such a large scale media empire being in the hands of one group of people.


The movie industry, in particular, will be heavily affected by any media merger. The tendency for films to go bigger and bigger budget has pushed out many of the small players in the moviemaking business. It seems the only big budget films getting funded these days are attached to large conglomerates like Disney or Fox. Either way, this merger will affect the movie business drastically.


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