Disney's increasing its estimate for Hulu losses this year to $250 million could indicate expectations of the virtual MVPD service gaining a million incremental subscribers, which would help Disney subscriber trends but potentially hurt legacy MVPDs, Barclays analyst Kannan Venkateshwar wrote investors Wednesday. Disney has begun the process of seeking regulatory OK for its Fox purchase in numerous jurisdictions worldwide, Disney CEO Bob Iger said on the company's quarterly earnings call Tuesday. Iger said the deal gives it "significant production capabilities and ... the talent to produce on our behalf." He said those production capabilities would be used in Disney's movie and TV businesses and in creating content for its direct-to-consumer offerings. He said an ESPN direct-to-consumer service will launch this spring in conjunction with a "reconceived and redesigned" ESPN app that will allow livestreaming of all ESPN networks and the ESPN+ subscription service. He said the ESPN+ streaming service will be $4.99 monthly, with the Disney direct to consumer service targeted for late 2019. He said the media company is seeing a trend of cord-nevers "coming into ... the multichannel world," attracted by the lower prices and skinnier bundles of digital platforms.
AT&T is considering an initial public offering of a minority interest in its Latin America entertainment services business, DirecTV Latin America, sometime in 2018's first half, it said Wednesday. It said it confidentially filed a registration statement with U.S. regulators, but there's no guarantee it will go through with the IPO.
Sinclair/Tribune deal opponents the Coalition to Save Local Media met last week with aides to Chairman Ajit Pai and Commissioner Mignon Clyburn, and with Commissioner Jessica Rosenworcel to argue against the takeover by Sinclair, said filings posted Monday in docket 17-179. The transaction will hurt competition, cause a rise in retransmission consent rates and reduce localism, said representatives of coalition members Ride-TV, the National Hispanic Media Coalition, Sports Fan Coalition, Computer & Communications Industry Association, NTCA and National Association of Broadcast Employees and Technicians-Communications Workers of America. "Transaction-related public interest harms to viewpoint diversity, localism, and competition overwhelm any purported public interest benefits." Sinclair and allies have defended the deal (see 1712060055).
Two former deputy assistant attorneys general for economic analysis at DOJ's Antitrust Division will be lead economics expert witnesses, on opposing sides, for the U.S. District Court for the District of Columbia trial on the agency's attempt to block AT&T buying Time Warner. DOJ counsel Craig Conrath told U.S. District Judge Richard Leon Friday during a biweekly status hearing on the impending trial that University of California, Berkeley economics professor Carl Shapiro will be lead economics expert witness for DOJ. Conrath said Justice potentially had two other expert witnesses to testify about regulatory issues. AT&T outside counsel Daniel Petrocelli of O'Melveny said the lead economics expert for the defense will be University of Chicago economics professor Dennis Carlton, and it has potentially three other expert witnesses to discuss advertising, media and entertainment and business efficiency issues. Petrocelli said there's a cap of 30 fact witnesses each for the two sides, but it's unlikely either side will call more than half that. Leon urged the two sides to give him a heads up about potential conflicts over evidence admissibility, so as to avoid numerous or protracted objections that could make the trial disjointed or delay a final ruling. The trial -- expected to run two to three weeks -- is to start March 19 (see 1712070067).
The trend of longer DOJ and FTC transaction reviews can be reversed by sometimes deferring Hart-Scott-Rodino notification filing to use that time to better work out arguments why the deal poses no harm to consumers, said Deputy Assistant Attorney General Barry Nigro Friday at the annual Antitrust Law Leaders Forum, according to his prepared remarks. After that, quickly give strong arguments for why a fuller investigation isn't merited, he said: "A high level white paper re-hashing the rationale for the deal and the reasons not to worry often won’t cut it." Instead, within days of the HSR filing, provide names and phone numbers of major customers, big data for key transactions, areas of product overlap, internal analyses of competitors in areas of product overlap, business and strategic plans for overlap areas and analyses of the proposed transaction done internally or by consultants. Very few deals raise competitive red flags, with the DOJ Antitrust Division in 2017 opening investigations in 2.7 percent of proposed transactions and issuing second requests in 1.6 percent, he said.
The boards of CBS and Viacom set up a special committees of independent directors to evaluate a possible deal, they said (see here and here) Thursday. The companies also looked at combining in 2016, though talks went nowhere (see 1612120060).
Approving Sinclair's buy of Tribune could undermine DOJ’s position on AT&T/Time Warner (see 1801310074) and lead to “huge liberal broadcasters that dwarf the size and power of the merged Sinclair-Tribune company,” wrote former House Republican Majority Leader Tom DeLay for Politico Wednesday. Broadcast ownership limits allowed Republicans to make large gains in the 1980s and '90s because they ensured a broad spectrum of licensees owned most of the country’s TV stations, “bypassing the liberal bias of New York City network executives at NBC, CBS and ABC,” DeLay said. Though Sinclair is conservative-leaning, approving the deal would set a precedent that would allow the much larger networks to grow, DeLay said. “At that point, nothing can stop liberal Northeast corporate executives from telling homes in the heartland what to think.” Allowing Sinclair/Tribune would weaken the case against AT&T/TW, DeLay said. “Trump’s DOJ would be gifting AT&T’s lawyers with a powerful argument that DOJ’s selective enforcement is not only arbitrary but also illogical.” It would give “an easy talking point to liberal Democratic senators” who argue Justice’s opposition to that deal is “political payback for CNN’s drumbeat of anti-Trump news,” Delay said. Sinclair didn't comment.
Communications and media company services firm Amdocs is buying Vubiquity, the buyer said Tuesday. Amdocs said the acquisition will mean increased digital content capabilities aimed at over-the-top, video distribution and content production customers. The $224 million cash deal is expected to close before the end of Q2, it said.
Meredith completed the takeover of Time Inc. in a $2.8 billion deal, the buyer announced Wednesday. The FTC had cleared the takeover (see 1801160012 and 1801120053).