In Beating Disney for Sky, Comcast Remains in the Game

Comcast and the Walt Disney Company have long been rivals. But Brian Roberts, who runs Comcast, has recently become the Magic Kingdom’s nemesis in chief. He waged an unrelenting fight for 21st Century Fox over the summer, forcing Disney to pay about $18 billion more than it had planned in order to secure Rupert Murdoch’s entertainment empire. Then, on Sept 22, Comcast emerged as the decisive victor in a battle with Disney for control of the British pay-television company Sky. For Robert A. Iger, Disney’s chief executive, the loss of Sky and its vast European customer base to Roberts has to sting. It was perhaps the first time during his ultrasuccessful 13-year tenure that Iger was denied such a prize, one he called “a crown jewel” when first pursuing it. But the realities of the entertainment business make the outcome more complicated. “I am happy that Disney didn’t get it,” said Michael Nathanson, an analyst at MoffettNathanson. “Comcast paid a very expensive price for this, and I think it’s hard to justify.” Comcast’s offer for the majority stake in Sky puts that total value of the company at $48 billion including assumed debt, or 15 times expected 2018 earnings. Nathanson added, “This doesn’t stop Disney.” Disney will own 39 percent of Sky through its 21st Century Fox acquisition. Iger can hold on to those shares or sell them to Comcast.