What began as a simple bid in late 2016 by Rupert Murdoch’s 21st Century Fox Inc. for the part of Sky Plc it doesn’t already own sparked a trans-continental bidding war when Walt Disney Co. and Comcast Corp. joined the chase for Sky, a British broadcaster. A rapidly shifting media landscape threatening all four players is fueling one of the more intriguing global media battles in decades, in which Fox now finds itself in a tug-of-war between rival bidders, Disney and Comcast. Now that AT&T Inc. has won antitrust clearance to buy Time Warner Inc., and the last U.K. regulator has signed off on Murdoch’s Sky bid (with one big condition), the endgame is approaching. Yet the outcome is still very much up in the air.

1. What’s driving these huge media deals?

Two entertainment giants, Disney and Comcast, are fighting over Fox and Sky for one big reason: Netflix Inc. Fueled by an enormous programming budget, Netflix has grown so popular that Americans are abandoning cable-TV subscriptions in droves, eating into media companies’ profits. Owning Fox would give Comcast or Disney iconic entertainment assets -- from “The Simpsons” to the “X-Men” franchise -- which would make their own streaming TV services more compelling. Fox’s 30 percent stake in Hulu would also give Comcast or Disney majority ownership over one of the few real Netflix competitors, since each already owns 30 percent of Hulu.

2. Why is Sky getting so much attention?

Sky’s 23 million customers in five European countries would give Comcast or Disney a rare opportunity to diversify out of the U.S. and reach more consumers directly. Sky boasts a market-leading platform, its Q box, which Comcast Chief Executive Officer Brian Roberts says leaves him “terribly impressed.” Sky also has a suite of sought-after TV content to lure and retain subscribers, including rights to Premier League soccer. Of the assets he’s seeking to acquire from Fox, Disney CEO Bob Iger called Sky “the jewel in the crown.”

3. What’s the latest on Murdoch’s Sky bid?

U.K. Culture Secretary Matt Hancock on June 5 approved Fox’s takeover of Sky, provided Fox sells Sky News. Murdoch, 87, already had proposed selling Sky to Disney, as part of his second attempt to buy the 61 percent of Sky he doesn’t already own. At first, Fox estimated that its Sky deal would close by the end of 2017. But the process was delayed by allegations of racial and sexual harassment at Fox News -- probes of which the company has since cleared.

4. Why is Fox now in play?

In December, Disney agreed to a $52.4 billion deal to acquire much of the global empire that Murdoch assembled over three decades. Those assets include the movie and TV production house, Star India, a lineup of U.S. cable channels that include FX and National Geographic, and the 39 percent stake in Sky. At the time, Disney beat rival bidder Comcast, even though the latter’s offer was at least 16 percent higher. Fox chose Disney because it considered Disney’s stock more valuable and was concerned that Comcast’s bid might hit regulatory snags. But Comcast on June 13 upended all that with its $65 billion bid for the same Fox assets Disney covets.

5. What happens next with Sky?

With the U.K. government’s approval for Fox to buy Sky, Fox’s board must decide whether to make a new offer. As it stands, Comcast’s bid of 12.50 pounds ($16.71) a share is at a premium to Fox’s 10.75 pounds a share. A higher bid would come with complications, though. As part of the Disney-Fox merger agreement, Fox would need Disney’s consent to boost its offer. To keep things simple, Disney might be tempted to make its own outright bid for Sky.

6. We’re going to have a bidding war, then?

The stage is set for one, and not just over Sky. In late May, Comcast confirmed its desire to outbid Disney for the Fox operations, and began approaching Fox shareholders to discuss its plan. If Disney now raises its bid for Fox, Comcast might do the same. The companies, meanwhile, will probably make their final offers for Sky within weeks, at which point Sky’s shareholders would have to decide which to back. All of this had hinged on the fate of another deal: AT&T’s attempt to acquire Time Warner, which the Justice Department had tried to block on antitrust grounds. Now that a federal judge has ruled against the U.S., Comcast has fewer reasons to fear similar treatment for its bid for Fox, though the Justice Department could still intervene.

7. What might the endgame look like?

Two scenarios are plausible. The first is a carve-up, where Comcast and Disney agree to share the spoils of Fox and Sky to avoid either company taking on too much debt. The second is a winner-takes-all outcome, where one outbids the other for the lot.

8. What about the Murdoch dynasty?

The family will still rule over a broadcast network, a cable sports channel, a business news channel and Fox News. The Murdoch family separately controls News Corp., which aside from British newspaper holdings also owns the Wall Street Journal and book publisher HarperCollins. The Murdochs in addition would hold a stake of more than 4 percent in Disney, ranking them among the largest shareholders.

• A QuickTake explainer on the current state of antitrust reviews of major deals like Disney-Fox. 

• An interview with Richard Plepler, HBO’s chief executive officer, on the golden age of television.

• Disney would need Justice Department approval for its Fox bid, too.

• A Bloomberg columnist writes that Disney is making a deal for the entertainment industry’s past instead of its future.

--With assistance from Samuel Dodge.

To contact the reporters on this story: Joe Mayes in London at jmayes9@bloomberg.net;Gerry Smith in New York at gsmith233@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Kim Robert McLaughlin, Paula Dwyer

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