Yes if You Ask Us

While AT&T moving to acquire Time Warner and Disney (and Comcast?) moving to acquire Fox are interesting deals, it’s more interesting to us what the next chess move may be in a world that increasingly values content (live sports and premium original content in particular).  We recently wrote about and discussed the subject on the CEORater Podcast.

Technology’s Four Horsemen

Technology’s four horsemen (Amazon, Apple, Facebook and Google) have each made their interests in licensing and creating original content clear: (Facebook’s recent NFL deal for example; YouTube Red; Amazon and Apple). Netflix also has significant original content ambitions but is materially smaller than the horsemen from a valuation and balance sheet standpoint.

Disney’s Best In Class Content Portfolio

Disney has the best premium content portfolio for our money (legacy Disney content, Pixar, Marvel and Lucasfilm). As such, we expect the question as to whether or not Disney will be acquired more of a question of “when?” and “by whom?” less so “if”. The “when” question is the more difficult one. Perhaps once Disney has either won the day with respect to its proposed acquisition of Fox (post-close) or once the company has definitively lost the deal. “By whom” could be any one of the horsemen, although our guess would be Apple given that the two companies have a relationship that began when Steve Jobs struck a deal with Bob Iger (as Michael Eisner was transitioning out of the CEO suite) to sell Pixar to Disney. It’s primarily because of this relationship that we believe one of the other three horseman has not made a play to acquire Disney. Gaming this through, if Google, Facebook and Amazon believe that Apple would counter any initial offer for Disney, then why expend the resources now when the prospective outcome at best is not clear and very well may be unfavorable? Particularly when there are a number of other high stakes games to compete in  – especially AI. Apple in particular has an AI problem.

If Google, Amazon and Facebook are in fact thinking this way  – assuming they have more than a passing interest in acquiring Disney – we would suggest taking a page out of Philadelphia Eagles Head Coach Doug Pederson’s playbook. Punch first and punch hard.

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