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Democrats call for hearings on Disney’s bid to buy 21st Century Fox

Lawmakers on the House and Senate’s top antitrust committee say Congress should take a closer look

A collection of top Democrats in the U.S. Congress want to hold hearings on Disney’s $ 52 billion bid to buy 21st Century Fox.

Key voices on competition and consumer protection fear Disney’s latest deal will only solidify its dominance in entertainment — granting it too many major box-office franchises and too much power over regional sports networks and streaming video services.

“I’m concerned about the impact of this transaction on American consumers,” said Sen. Amy Klobuchar, the top Democratic lawmaker on her chamber’s leading antitrust oversight committee.

Klobuchar said she has already asked the Republican leaders of the Senate Judiciary Committee to convene a hearing. With deals of this magnitude, her panel and others like it often do — though GOP leaders have not yet signaled their plans.

Her counterpart in the House, meanwhile, sounded a similarly fearful note.

“Another day, another mega-merger,” said Rep. David Cicilline in a statement last week. “Disney’s proposed purchase of 21st Century Fox threatens to put control of TV, movie, and news content into the hands of a single media giant.”

For the moment, it’s still early days for Disney’s acquisition of 21st Century Fox. The deal as proposed would see Disney acquire Fox’s film and TV studios, including franchises like “Avatar” and “X-men,” as well as Fox’s regional sports networks and a controlling stake in Hulu. However, Disney would not gain Fox News; the network would remain in the hands of its current owner, Rupert Murdoch.

Both sides have told investors will likely take 12 to 18 months to complete, and they will still have to sell the deal to government regulators, who must review the merger to determine its effects on competitors and consumers. That task likely will fall to the Justice Department, which weeks took the rare step of suing companies in a different blockbuster deal — AT&T’s bid for Time Warner.

In these kinds of transactions Congress doesn’t actually have a say. But lawmakers do often probe major mergers anyway, not the least because the DOJ’s own, independent investigation happens outside of public view. At the very least, the hearings — sometimes featuring testimony from major chief executives — can ultimately shape public opinion about the companies’ plans.

To that end, consolidation-wary Democrats have urged their Republican colleagues all week to schedule multiple hearings on Disney’s pursuit of 21st Century Fox. Among those advocating for greater scrutiny has been Rep. Frank Pallone, the Democrats’ top player on the House Energy and Commerce Committee, which oversees tech and telecom.

“The Committee’s oversight into these proposed mergers has been lacking,” he said in a statement. “Despite repeated calls from Democratic members, this committee has not had a single hearing to look at the changing video marketplace in more than four years — before many online video services had even launched.”

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Disney paves way for streaming Netflix competitor, entertainment behemoth with $52.4B purchase of 21st Century Fox

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The Walt Disney Co., the major media conglomerate that has previously worked closely with Apple, has confirmed plans to acquire 21st Century Fox, with the $ 52.4 billion purchase of the entertainment rival likely to have major repercussions for the rest of the media industry.
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Disney Acquires 21st Century Fox, Paving the Way for Netflix Competitor

The Walt Disney Company has struck a deal with media mogul Rupert Murdoch to acquire 21st Century Fox, which includes the Twentieth Century Fox Film and Television studios and its cable and international TV businesses, in exchange for $ 52.4 billion in stock.

The deal is likely to be very consequential in the media industry, expanding Disney’s already-considerable reach in the entertainment market, adding franchises like “Avatar”, “X-Men”, and “The Simpsons” to a catalog that boasts films from Marvel Studios, Lucasfilm, and Pixar Animation Studios.

Disney will also gain the rights to 22 regional sports broadcasting networks in the US, international Fox assets like India’s Star TV network, as well as a stake in European broadcaster Sky plc. The Fox Broadcasting network, which includes the Fox News Channel and Fox Business News, will be spun off into a new company.

“The acquisition of this stellar collection of businesses from 21st Century Fox reflects the increasing consumer demand for a rich diversity of entertainment experiences that are more compelling, accessible and convenient than ever before,” said Disney CEO Bob Iger in a press release. “The deal will also substantially expand our international reach, allowing us to offer world-class storytelling and innovative distribution platforms to more consumers in key markets around the world.”

Under the terms of the all-stock deal, Fox shareholders will receive 0.2745 Disney shares for each Fox share held. Disney will also assume approximately $ 13.7 billion in Fox debt. Rumors of the deal, which first surfaced in November, sent Fox shares surging by 30 percent. Upon confirmation of the deal on Thursday, the shares climbed 5 percent further.

The acquisition also paves the way for the entertainment conglomerate to compete with streaming giants like Netflix and Amazon, by offering content exclusively on its own streaming service. Disney announced earlier this year in August that its distribution deal with Netflix is due to end sometime in 2019. The company plans to launch an ESPN-branded sport video streaming service in 2018, followed by a Disney-branded streaming service in 2019.

“The deal illustrates the huge strategic challenge traditional media companies face and how they need to reinvent their business models to compete with digital, online competitors such as Netflix, Google and Amazon,” said Nick Jones, partner and head of technology at Cavendish Corporate Finance, to Reuters. “(It) helps Disney dramatically reduce its reliance on traditional television, a business that has declined over the last two decades.”

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