$80 Billion Offer From Rupert Murdoch Is Rejected, but Time Warner May Be in Play

If it ever happens...

Quote:Together, 21st Century Fox and Time Warner would become a colossus with an array of television networks and channels like Fox, Fox News, FX, TNT and TBS; the premium subscription channel HBO, movie studios like 20th Century Fox, Warner Bros. and other prominent outlets. It would also combine Fox’s growing sports business with the broadcast rights that Time Warner owns for professional and college basketball and Major League Baseball, among other sports.

The combined company would have total revenue of $65 billion.

... move the TNT/TBS sports broadcast rights to FS1 and FS2, and then you have a critical mass of live sports that makes Fox much more competitive with ESPN.

Man I hope they keep rejecting it.

(07-16-2014 05:30 PM)Wedge Wrote:  ... move the TNT/TBS sports broadcast rights to FS1 and FS2, and then you have a critical mass of live sports that makes Fox much more competitive with ESPN.

Story from 2 months ago......
"Fox Sports 1 is unlikely to take down ESPN or Turner Sports in the pursuit of an NBA TV package, but the network is reportedly in talks for a limited slate of games.

The Big Lead reported Wednesday that Fox Sports “in the midst of negotiating” a television package with the NBA. Any negotiations would presumably be informal; the NBA has yet to officially begin talks with incumbents ESPN and Turner Sports."

http://www.sportsmediawatch.com/2014/05/...v-package/

Wedge - that appears to be exactly what they are trying to do.

If the NBA won't give you the broadcasting rights you want, just make a hostile takeover of the company who has those rights!!! Boom!, don't mess with News Corp.


.

(07-16-2014 05:30 PM)Wedge Wrote:  $80 Billion Offer From Rupert Murdoch Is Rejected, but Time Warner May Be in Play

If it ever happens...

Quote:Together, 21st Century Fox and Time Warner would become a colossus with an array of television networks and channels like Fox, Fox News, FX, TNT and TBS; the premium subscription channel HBO, movie studios like 20th Century Fox, Warner Bros. and other prominent outlets. It would also combine Fox’s growing sports business with the broadcast rights that Time Warner owns for professional and college basketball and Major League Baseball, among other sports.

The combined company would have total revenue of $65 billion.

... move the TNT/TBS sports broadcast rights to FS1 and FS2, and then you have a critical mass of live sports that makes Fox much more competitive with ESPN.

If the combined revenue of the two companies is $65 billion, then $80 billion sounds like a pretty steep price to offer for one of them.

(07-16-2014 05:51 PM)ken d Wrote:  

(07-16-2014 05:30 PM)Wedge Wrote:  $80 Billion Offer From Rupert Murdoch Is Rejected, but Time Warner May Be in Play

If it ever happens...

Quote:Together, 21st Century Fox and Time Warner would become a colossus with an array of television networks and channels like Fox, Fox News, FX, TNT and TBS; the premium subscription channel HBO, movie studios like 20th Century Fox, Warner Bros. and other prominent outlets. It would also combine Fox’s growing sports business with the broadcast rights that Time Warner owns for professional and college basketball and Major League Baseball, among other sports.

The combined company would have total revenue of $65 billion.

... move the TNT/TBS sports broadcast rights to FS1 and FS2, and then you have a critical mass of live sports that makes Fox much more competitive with ESPN.

If the combined revenue of the two companies is $65 billion, then $80 billion sounds like a pretty steep price to offer for one of them.

$80 Billion may not be that bad of a price. Usually in an acquisition the price is some multiple of revenues. Presuming News Corp has the cash on hand, $80 Billion could be a bargain.

The juicier implication might actually be in the TV news/talk arena. Could you imagine News Corp owning both Fox News AND CNN?

(07-16-2014 08:26 PM)chargeradio Wrote:  

(07-16-2014 05:51 PM)ken d Wrote:  

(07-16-2014 05:30 PM)Wedge Wrote:  $80 Billion Offer From Rupert Murdoch Is Rejected, but Time Warner May Be in Play

If it ever happens...

Quote:Together, 21st Century Fox and Time Warner would become a colossus with an array of television networks and channels like Fox, Fox News, FX, TNT and TBS; the premium subscription channel HBO, movie studios like 20th Century Fox, Warner Bros. and other prominent outlets. It would also combine Fox’s growing sports business with the broadcast rights that Time Warner owns for professional and college basketball and Major League Baseball, among other sports.

The combined company would have total revenue of $65 billion.

... move the TNT/TBS sports broadcast rights to FS1 and FS2, and then you have a critical mass of live sports that makes Fox much more competitive with ESPN.

If the combined revenue of the two companies is $65 billion, then $80 billion sounds like a pretty steep price to offer for one of them.

$80 Billion may not be that bad of a price. Usually in an acquisition the price is some multiple of revenues. Presuming News Corp has the cash on hand, $80 Billion could be a bargain.

The juicier implication might actually be in the TV news/talk arena. Could you imagine News Corp owning both Fox News AND CNN?

It would own two things I never, ever watch, then.

This deal is DOA because of two things:
1)Time Warner has already rejected the 21 Century Fox proposal and
2)The big four leagues want to have more bidders for content rights. If Time Warner is swallowed up by 21CF, the increase in rights fees would decrease significantly.

If there is a bidding war for Time Warner, don't be shocked if Google gets involved. They have plenty of cash available to get involved in a bidding war.

Also for Terry d, Rupert Murdoch has already said that should the Time Warner deal go through, CNN would be sold off to avert anti-trust issues.

(07-16-2014 08:45 PM)Rube Dali Wrote:  This deal is DOA because of two things:
1)Time Warner has already rejected the 21 Century Fox proposal and
2)The big four leagues want to have more bidders for content rights. If Time Warner is swallowed up by 21CF, the increase in rights fees would decrease significantly.

If there is a bidding war for Time Warner, don't be shocked if Google gets involved. They have plenty of cash available to get involved in a bidding war.

Also for Terry d, Rupert Murdoch has already said that should the Time Warner deal go through, CNN would be sold off to avert anti-trust issues.

Lol. One thing, then.....

Perhaps ol' Rupert is sensing big changes down the road...

Quote:The bid is likely more than a means for Fox to gain scale at a time when pay-TV distributors such as Comcast Corp. and AT&T Inc. are getting much bigger through their own acquisitions. Media moguls like Fox Chief Executive Rupert Murdoch are contemplating a more nuanced problem: How to assemble the right mix of assets—from broadcast channels and sports-television rights to international properties—to stay relevant as the media landscape undergoes tectonic shifts.

All big media companies are trying to find the magic formula that will inoculate them from the pressures that could come, for example, from customers cutting their pay-TV connections in greater numbers. And they are trying to position themselves to exploit, rather than be buffeted by, the growing viewership of content online and on mobile devices.

http://online.wsj.com/articles/21st-cent...1405511112

I thought Time Warner was just bought by Comcast-NBC/Universal

(07-16-2014 11:43 PM)IceJus10 Wrote:  I thought Time Warner was just bought by Comcast-NBC/Universal

I think that was Time Warner Cable, which is a different company

Boy you new bigeast guys are terrified about fox sports tanking. Lol

I like FS1 and think they produce a pretty good product. Gus Johnson calling anything makes me watch lol. Seriously, competition makes every channel better.

(07-16-2014 08:26 PM)chargeradio Wrote:  

(07-16-2014 05:51 PM)ken d Wrote:  

(07-16-2014 05:30 PM)Wedge Wrote:  $80 Billion Offer From Rupert Murdoch Is Rejected, but Time Warner May Be in Play

If it ever happens...

Quote:Together, 21st Century Fox and Time Warner would become a colossus with an array of television networks and channels like Fox, Fox News, FX, TNT and TBS; the premium subscription channel HBO, movie studios like 20th Century Fox, Warner Bros. and other prominent outlets. It would also combine Fox’s growing sports business with the broadcast rights that Time Warner owns for professional and college basketball and Major League Baseball, among other sports.

The combined company would have total revenue of $65 billion.

... move the TNT/TBS sports broadcast rights to FS1 and FS2, and then you have a critical mass of live sports that makes Fox much more competitive with ESPN.

If the combined revenue of the two companies is $65 billion, then $80 billion sounds like a pretty steep price to offer for one of them.

$80 Billion may not be that bad of a price. Usually in an acquisition the price is some multiple of revenues. Presuming News Corp has the cash on hand, $80 Billion could be a bargain.

The juicier implication might actually be in the TV news/talk arena. Could you imagine News Corp owning both Fox News AND CNN?

Often, that is how the media reports such deals, especially when they don't have ready access to all the underlying data. In practice, an offer price is usually determined by applying a multiple to free cash flow as opposed to revenue. Free cash flow is also sometimes referred to as EBITDA (earnings before interest, taxes, depreciation and amortization) less debt. Depending on other factors (especially the purchaser's expectations of future earning prospects and strategic fit) , a typical multiple would probably be between 5 and 8.

If Time Warner's revenues were $40 billion, and cash flow was 20% (which would make it highly profitable by corporate standards) that would mean that Murdoch applied a very high multiple - 8 - in making his offer. If Time Warner's revenues were lower than that (and I didn't take the time to look them up) then the Murdoch offer could almost be characterized as "an offer you can't refuse". I'll look into the numbers a little further.

I'm sure Fox would like to pick up the content but getting access to the distribution chain I suspect is the bigger driving force.

I sincerely hope this would get struck down if the deal was made. Consumers need more choices not less. I hope the Comcast and AT&T deals get struck down too.

Sent from my KFTHWI using Tapatalk

(07-16-2014 05:30 PM)Wedge Wrote:  ... move the TNT/TBS sports broadcast rights to FS1 and FS2, and then you have a critical mass of live sports that makes Fox much more competitive with ESPN.

Problem is, those are two of the top 5 highest subscription rates on cable. Moving their sports would significantly lower that.

Plus both are more houses than ESPN. If anything, the inverse would be true. They would move the major sports they now show on Big Fox to TNT/TBS, as the "marquee" national network, as a way to help promote FS1 and FS2.


One thing I would be curious of is what would happen to F/X. It would not seem to have much use with TBS and TNT on board. Maybe it would be converted to a full time sports channel. I also imagine one of FXX and Tru TV would be changed as well.

(07-17-2014 09:43 AM)adcorbett Wrote:  

(07-16-2014 05:30 PM)Wedge Wrote:  ... move the TNT/TBS sports broadcast rights to FS1 and FS2, and then you have a critical mass of live sports that makes Fox much more competitive with ESPN.

Problem is, those are two of the top 5 highest subscription rates on cable. Moving their sports would significantly lower that.

Plus both are more houses than ESPN. If anything, the inverse would be true. They would move the major sports they now show on Big Fox to TNT/TBS, as the "marquee" national network, as a way to help promote FS1 and FS2.


One thing I would be curious of is what would happen to F/X. It would not seem to have much use with TBS and TNT on board. Maybe it would be converted to a full time sports channel. I also imagine one of FXX and Tru TV would be changed as well.

Good point about the huge number of homes for TBS and TNT. Maybe if Fox is really determined to take a bite out of ESPN, they'd make one of those into a sports channel, or just load it up with marquee live events as you suggest - - eg the World Series, or the next World Cup, which Fox has.

As for FX, I'd guess that Fox has thought ahead and made a list of several channels, including CNN and maybe FX, that Fox will offer to sell off in exchange for getting the gov't to allow the deal.

(07-17-2014 10:27 AM)Wedge Wrote:  

(07-17-2014 09:43 AM)adcorbett Wrote:  

(07-16-2014 05:30 PM)Wedge Wrote:  ... move the TNT/TBS sports broadcast rights to FS1 and FS2, and then you have a critical mass of live sports that makes Fox much more competitive with ESPN.

Problem is, those are two of the top 5 highest subscription rates on cable. Moving their sports would significantly lower that.

Plus both are more houses than ESPN. If anything, the inverse would be true. They would move the major sports they now show on Big Fox to TNT/TBS, as the "marquee" national network, as a way to help promote FS1 and FS2.


One thing I would be curious of is what would happen to F/X. It would not seem to have much use with TBS and TNT on board. Maybe it would be converted to a full time sports channel. I also imagine one of FXX and Tru TV would be changed as well.

Good point about the huge number of homes for TBS and TNT. Maybe if Fox is really determined to take a bite out of ESPN, they'd make one of those into a sports channel, or just load it up with marquee live events as you suggest - - eg the World Series, or the next World Cup, which Fox has.

As for FX, I'd guess that Fox has thought ahead and made a list of several channels, including CNN and maybe FX, that Fox will offer to sell off in exchange for getting the gov't to allow the deal.

As I understand it, the offer to Time Warner is light on cash and heavy on Fox stock (which TW and many analysts believe may be temporarily inflated and due for a correction). I wouldn't be surprised if Murdoch believes he can sell off CNN and other properties for enough cash that he doesn't have to pay out anything except his own stock. He didn't get to be rich by making bad deals.

CNN and The CW would be sold off of the deal I'm sure. Probably a few other stations in a deal.

Of course the NBA is the sports property everybody is talking about it, but you should be talking about the NCAA Tournament. That is a Time Warner property. Fox wiggle that over and it would be a major coo against ESPN.