The Fox-Disney-Comcast-Sky conundrum gets a new twist

21^st Century Fox (FOX) does not want to go with Comcast (CMCSA). The Rupert Murdoch-owned media company tossed aside a $65 billion bid from Comcast to accept a sweetened offer of $71 billion from Walt Disney (DIS). Now, ESPN’s parent company has received the green signal from the US Department of Justice for its acquisition of Fox with the stipulation that it must sell 22 of the latter’s regional sports networks.

The DOJ believes that the combined sports networks of Fox and Disney would create a monopoly situation in sports programming and pave way for higher subscription prices. Disney would have 90 days to sell the networks post the Fox buyout.

The Disney-Fox deal is yet to gain regulatory approvals from other countries and Comcast is not out of the picture yet. The NBC owner has the option to raise its offer and it is currently engaged in discussions and a review of its possibilities.

Comcast could continue pursuing Fox but the latter might not want that to happen. The prime reason for this is Fox believes a deal with Disney would be less complicated in regulatory terms than one with Comcast. This has been proven true with the speedy approval of the Disney-Fox deal in the US.

In the meantime, the fourth party in this game, Sky plc (SKY), is pondering its position in the overall state of affairs. While Disney raised its bid for Fox, the latter did not do the same for Sky, raising doubts over Fox’s intentions towards Sky. At present, Fox and Comcast have bid for Sky while Comcast and Disney are looking at Fox. A possible scenario that could play out is Comcast allowing Disney to acquire Fox with Disney allowing Comcast to take over Sky.

That would be the easiest thing to do but none of the parties seems willing to let go of such lucrative assets. Sky appears to be the right fit for Comcast in terms of its operations but the European company owns content that would be a good fit for Disney’s assets which in turn makes it attractive to the Marvel franchise-owner. Although the acquisition of Fox would raise Disney’s debt load, its assets and content would give Disney a massive advantage against rivals like Netflix (NFLX).

Related: Comcast and Disney – a look at the tug of war for Fox

Related: Comcast bids $65 billion for Twenty-First Century Fox