Comcast wants to buy Disney for $66 billion

Posted Wednesday, February 11, 2004 8:43 AM | Contributed by Jeff

Comcast, the largest U.S. cable television operator, Wednesday launched a stunning proposal to buy Walt Disney in a deal Comcast said would value Disney at $66 billion including debt. If successful, the deal would vault Comcast into one of the world's largest media companies, combining Disney's film studio, ABC television network, ESPN sports network and theme parks with Comcast's 21 million cable subscribers.

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Wednesday, February 11, 2004 8:44 AM
Jeff's avatar What possible benefit could there be for the company or consumers for a company that big?
Wednesday, February 11, 2004 8:55 AM
There would be no benefit and quite the opposite would occur. Look at ABC now. The 3rd network and not far ahead of some of the cable networks. Why?

Well, it is a little complicated but the short answer is that Disney would rather see it's own shows on the network. That would be fine if they were producing some quality shows that people care about but it isn't happening. So, they are treading water with average at best programming while the others vault out ahead of them.

ABC was a much better network before Disney came along. I think that is pretty obvious.

With what the cable industry is doing with cable rates, I'm not sure I want to see Comcast influencing decisions about theme park admissions, etc.

Wednesday, February 11, 2004 9:00 AM
My first thought when I saw this one on CNN was "it's gonna be the end of an era". I'm not the biggest fan of Disney, in fact I believe that they're the biggest scam to ever hit the face of the earth, but I do believe that they're necessary, if not for the parks, then just for kids in general. If Comcast took them over, Disney would just get sterilized, watered down even further than it is, and even further from the hopes and dreams of Walt. Comcast should get a giant b**ch slap just for making the offer ... if I had my own place yet, I'd cancel my cable ;)
Wednesday, February 11, 2004 9:05 AM
Eisner or Comcast... I can't help but figure Eisner is the lesser of two evils. What are they going to do? Rename it Cinderella's ComCastle?
Wednesday, February 11, 2004 9:07 AM
The Mole's avatar Something scarry is that the take over bid is $66.6 billion dollars. Now that's scarry.....
Wednesday, February 11, 2004 9:11 AM
Gemini's avatar Maybe it's just me, but does anyone else think Comcast is out of their league?

I'm not a big fan of Comcast. It was their exorbitant rates that caused me to switch to DirecTV and DSL.

Wednesday, February 11, 2004 9:19 AM
I'm about *that close* to making the same switch, Walt. Also, the price Comcast is offering is pretty minimal; the press release I read said $5B "premium". But, if the offer is $66B, then that's less than a 9% premium in share price. That's not a serious offer for a company that's seen share prices increase substantially over the last year.
Wednesday, February 11, 2004 9:25 AM
Comcast seems to me like ... what's a good comparison here ... ah ha! A very valid one!

I've only seen the movie once, so bear with me, but Comcast is like the bad guy in Aladdin, it seems. Gaining great power, growing, growing, and growing seemingly without bounds. But, just when they hit their peak, everything just comes crashing down. Not only would we end up with a red and white Disney world, but I think within a few years, either Disney would be up for sale again or just plain have to shut down as Comcast falls.

It also strikes me as somewhat of a conflict of interest issue if the cable company all of a sudden owns ABC, the Disney channel and ESPN? Maybe not ABC as you can usually get that with rabbit ears, but Comcast relies on ESPN and Disney channel to pay their bills doesn't it?

Wednesday, February 11, 2004 9:37 AM
Can you imagine, "Disneyland: A Comcast-Disney Theme Park"
Wednesday, February 11, 2004 9:38 AM
What killed ABC was the season a few years ago. Almost all of their programming was Millionaire. People grew tired of it. That, in addition to Dharma and Greg, Home Improvement, and Spin City leaving the line up did not help. The network has been making great strides in terms of regaining viewers, but is nowhere near the level of CBS. I expect NBC will be in the same boat come next year. Friends and Frasier leaving are a huge hit for the Peacock, and there really hasn't been a dominate new show on NBC that people are talking about. I expect CBS, with only a few new shows coming next year, to dominate the airwaves for a long, long time.


Wednesday, February 11, 2004 9:41 AM
It seems like NBC is grooming Scrubs to be their new flagship sitcom.
Wednesday, February 11, 2004 9:57 AM
as for the conflict of interest thing, that's not going to stop the FCC from approving this. There are other big folks who own both delivery pipelines and content pipelines (Rupert Murdoch the obvious one). Brian Roberts at Comcast (no relation) wants to control both the content and how it's delivered to people, just like Murdoch.

I'd worry more about Comcast owning Disney's theme parks than I do about NBC owning Universal's theme parks, just because it's so much larger a percentage of the company. If this goes through (which I doubt... I have fantasies of this playing out just like the early 80's with Roy managing to divert the hostile takeover by installing a new board of directors and new CEO) I could seriously see Comcast selling off the parks and having hte new park owners just be a licensee (a'la OLC... and of course, if the new owner WERE the OLC we'd all be happy campers)

Wednesday, February 11, 2004 10:21 AM
Jeff's avatar At least we see Eisner making a good decision. He wanted no part of it. I don't think that's about his position or money either, because clearly he'd be insanely rich if this purchase were to happen. He knows that it would kill the culture that is already the subject of so much debate.

Cable companies don't do anything well. Seriously, the only "good" cable company I've ever encountered was one run by the local municipality, and there are only a handful of those nationwide (and yes, they're always cheaper).

If the FCC isn't looking a little harder at ownership limitations again, they should be. The regulation of spectrum and natural monopolies like cable and phone companies is completely justified because these are scarce resources. You can't create more radio spectrum and it's cost prohibitive to string up a competing phone or cable system.

The FCC back in the day promoted "diversity in the marketplace of ideas" by heavily regulating these resources, because they obviously could see the danger in few companies controling what you could see over said resources. That pretty much went out the window when they started lifting ownership limits in radio, where a condition of being a licensed broadcaster is supposed to be that you serve the public interest, yet two or three companies now own everything and run it out of New York and LA. Real public interest there.

It's a bad idea, and the FTC and FCC should be looking really hard at this.

Wednesday, February 11, 2004 10:29 AM
Gemini's avatar Brian - I made the switch and I'm saving something like $30/month (combined Internet and TV), losing no channels in the process. Plus, I get a better picture, access to NFL Sunday Ticket, and my TiVo - with the built-in DirecTV tuner - is much better than the standard TiVo. After nearly a year - zero regrets.
Wednesday, February 11, 2004 10:34 AM

If the FCC isn't looking a little harder at ownership limitations again

In the current administration? Given recent FCC actions? Don't hold your breath.

Walt: the only thing holding me back is that my DVR is a ReplayTV, and that investment would be just about worthless in a DirectTV world. From the pricing I've done, I'd be saving only a few dollars a month with a programming package equivalent to what I have now---the broadband access is paid through a work account.

But, I've had the Replay for 2.5 years now, and Comcast has been ticking me off consistently of late, so perhaps it's time to say goodbye.

Wednesday, February 11, 2004 10:44 AM
I want to believe that Eisner is against this because he cares about Disney and its culture, although I can't help but think it is because, if he talks to Comcast and the buyout falls through, he will surely be voted out.
Wednesday, February 11, 2004 11:03 AM
Jeff's avatar Which FCC actions are those?
Wednesday, February 11, 2004 11:21 AM
1EyedJack's avatar It could be worse.... Just be glad AOL wanted to merge with Time Warner years ago instead of Disney.

Just my $.02


Wednesday, February 11, 2004 11:26 AM
Gemini's avatar DirecTV runs specials on DirecTV Tivo players all the time. After a $50 mail-in rebate - combined with a special price, I paid $49.95 for mine. Plus, the monthly TiVo fee is only $4.99 - compared to something like $12/month for standard TiVo. But, if you already have ReplayTV, I can see the hesitation. DirecTV isn't perfect. They charge $5 for each additional TV, where with cable, you can get the non-digital package for no charge on any number of TVs.

My situation was probably a little different than yours. One example - I wanted TechTV. Comcast only offers TechTV in a special package with a handful of other channels for $10/month. So I paid the extra $10, basically, to have TechTV. DirecTV includes TechTV in their Total Choice Plus package, so I saved $10 right there.
*** This post was edited by Gemini 2/11/2004 11:27:28 AM ***


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