Comcast has outbid 21st Century Fox for Sky

Comcast has won an auction to acquire UK telecommunications
company Sky, bidding $38.8 billion to overtake Rupert Murdoch’s
21st Century Fox after a lengthy bidding war this summer.
Comcast’s win paves the way for it to acquire Sky and its 23
million European subscribers and entertainment assets. Sky’s
shareholders will now need to approve the deal.

Over the course of this year, Comcast and Fox have been locked
in a titanic battle over their futures, one that will define
the nature of the industry as a whole. Last summer, Disney CEO
Bob Iger spoke with Murdoch
about an acquisition
of Fox and made its first offer in
December, and while Comcast
made its own overtures
this spring. The two made several
bids this spring, but after
Disney later upped
its offer,
Comcast dropped
its plans to acquire Murdoch’s company.

Simmering in the background of this was Murdoch’s ambitions to
completely acquire Sky — Fox already owns a 39 percent stake in
Sky, and Murdoch has been working to fully acquire it since
2016 — to better position the new version of Fox in the larger
telecommunications world. He wasn’t the only one: Comcast was
also interested in acquiring Sky, and
another bidding war ensued this summer
. In August,
government regulators set up an auction
for the company,
which pitted Fox (and by proxy, Disney, which would swallow up
Sky during its Fox acquisition) against Comcast.

The Wall Street Journal notes
that Comcast’s win
will give it a huge new pool of international customers, but it
comes at a steep price: this summer’s bidding war boosted the
final cost for Sky’s cost far above what it was willing to pay
months ago. The acquisition will also give Comcast Sky’s major
television and programming assets, which will help it compete
against the likes of Netflix and Amazon, which have invested
heavily in original entertainment.

Ultimately, the sale is a loss for Disney, which is
working on its own streaming service
. Disney still owns
Fox’s 39 percent stake in the company, and it remains to be
seen if it’ll hold onto it. The deal will now go before Sky’s
shareholders for their vote.

Disclosure: Comcast is an investor in Vox Media, The
Verge’s parent company.

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