The Fox and the Found(er)

I’ve been reading all the analyses and backstories and the opinion pieces of the Disney-Fox-Comcast situation. (Who doesn’t like a big deal?)

The Comcast offer is the larger of the two deals, by a lot: if someone gives you that offer, you should probably take it (you’ll also have to take a chance on increased risk of the deal being vetoed). Walking away from the Disney deal now will mean a $1.53b break fee for 21st Century Fox, but you can make up for that by taking the higher Comcast deal and paying Disney back. (And Murdoch could still use the extra leftover money from the Comcast deal to buy even more shares of Disney and have both toys!)

However, if you founded a firm, ran the firm, and still control a big piece of the firm, the Disney deal makes way more sense. My favorite take on why Murdoch presently favors the Disney path is the one from Felix Salmon, shareholders be damned:

The official answer is that Disney-Fox is a “horizontal” merger, while Comcast-Fox would be a “vertical” merger, and well-paid readers of antitrust tea leaves consider the former to be easier to do than the latter. The increased chances of the government vetoing a Comcast deal mean that it makes sense for Murdoch to just go with Disney instead.


Once the Disney deal closes, Murdoch will be Disney’s largest individual shareholder and will have a direct line to Iger; he might even have a son, James, in a senior position at Disney. The combined Disney-Fox will include a huge amount of Murdoch DNA, especially when it comes to television production, and Murdoch will be justified in taking the occasional victory lap if and when Disney goes on to ever greater strengths.

It reminds me of the founder mentality at work here: of course, it is about the money, but it is also about your work, your legacy and how best to make sure your company and vision will outlast you. This is true of big companies and small.

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