Netflix should stream a drama covering the Sky, Disney, Comcast, Fox takeover battle

Rupert Murdoch has just tabled a markedly improved bid for Sky in an attempt to frustrate Comcast, which also wants to buy the Fox entertainment assets he's trying to sell to Disney

Rupert Murdoch has tabled an improved bid for Sky (AFP/Getty)

The battle between Disney and Comcast for control of Rupert Murdoch’s 21st Century Fox in the US, and Sky in the UK, is turning into one of the most entertaining soap operas in business.

It might even, one day, be worthy of a show on, say, Netflix?

It’s the disruptive effect the streaming giant has had on the media industry that got it all started.

The latest update to the saga is the tabling of an improved offer for Sky by Mr Murdoch’s 21st Century Fox, priced at £14 a share in cash, which values the business at a tasty £24.5bn.

It’s markedly better than Mr Murdoch’s earlier £10.75 a share bid, and indicates that those of us who believed Sky was selling up too cheaply when this all got started 18 months ago, were on the right track.

More importantly, the improved offer trumps a rival one priced at £12.50, or £22bn, from NBC owner Comcast by just over 10 per cent, and it has been recommended by an independent committee of Sky’s board.

The battle for Sky is, of course, playing out against a wider struggle for the entertainment assets of Fox between Comcast and Disney.

Sky is part of the package that Mr Murdoch wants to sell to the latter in a $71bn deal that would be paid for in Disney stock, and make Mr Murdoch a leading shareholder, perhaps the power behind the throne of mouseketeer in chief Bob Iger.

That’s clearly what he wants. And there is some justification for his stance beyond the bruising his ego would take through having to bow before Comcast CEO Brian Roberts, whom he first sent packing before the ding dong battle went public.

As I’ve written before, the deal would give Disney majority control of streaming service Hulu, currently jointly owned by Fox, Disney, and Comcast, with 30 per cent each (the final 10 per cent is in the hands of Time Warner).

Mr Murdoch struck the deal to get Fox out of Netflix’s way (he'll keep Fox News, its sports channels, some other bits and bobs). Disney combined with Fox should be able to get in Netflix's way, with the Murdoch clan in a position to influence its direction, and poised to benefit from a handsome potential upside.

Comcast, by contrast, offered cash. That’s nice to have, but it’s not something Fox’s boss is short of.

It’s a different matter for Fox’s other shareholders, however and some of them have already filed a lawsuit that seeks to block the deal.

The ball is now back in Comcast’s court, both regarding Sky and Fox. Could Mr Murdoch really afford to ignore an improved offer from Mr Roberts paid for with something his fellow shareholders might prefer to Disney stock? Would Disney, a company noted for its financial discipline, feel able to respond again?

See, I told you this was a soap opera. And it won’t be long before the next episode goes live.

An interesting potential twist is that it is possible to foresee a situation in which Comcast loses out on Fox, but succeeds in taking over Sky, whose fate will be decided by a separate set of shareholders (Fox’s stake currently stands at 39 per cent).

Sky, a pan European broadcasting juggernaut, wouldn’t be a bad consolation prize, because one of Comcast’s aims with this is to increase its international exposure.

The Big Short, among others, has proved films about business can work if handled correctly. Netflix writers take note. This should give them plenty of material.