Fox charges for content with Time Warner acquisition offer

It’s a media arms race.

Comcast and CEO Brian Roberts have take🀅n the distribution hill with its $45 billion deal for Time Warner Cable, while 21st Century Fox is charging toward the content zone, with its $80 billion offer last week for Time Warner.

But Time Warner CEO Jeff Bewkes declined the proposal, in what appꦏears to be a coy attempt to𒀰 get more money for the company.

Whilཧe regulators were probing the Comcast-TWC deal, which would join the No. 1 and No. 2 cable providers that between them serve 30 million homes and 40 percent of US households with broadband, Fox✅ saw an opportunity to strike.

On the distribution side, Comcast-TWC would𓄧 have a powerful chokehold on the entire🎀 pay-TV ecosystem and its evolution in broadband.

Critics argue Comcast-TWC could use its market power to call for huge increases from other distributors for its who𒁏lly owned NBC, its stations and stable ൩of cable channels, including USA and Syfy.

In turn, th𒆙at could force down the fees rivals such as satellite operator DirecTV want to pay for everyone else’s smaller cable bundles.

AT&T, whi💎ch is in the process of acquiring DirecTV, said in June i𝓀t expects 20 percent in cost savings, or $1.6 billion, shaved off its video bill over the next three years. Comcast-TWC will no doubt entertain similar aims.

Comcast also can command what amounts to a most favored nation status to get the bes🔴t prices versus competitors for its programming.

What’s more, critics only have to point to the fuss Netflix is creating over connection poiꦚnts with Comcast’s Web network to see how fearful Comcast could be if we’re all streaming NBC’s “Sunday Night Football” in five years.

Into this frayꦛ, Fox is countering with a “Content Is King” battle plan.

In the US, a combined Fox-Time Warner would own fiv💛e of the top 11 pay-TV networks by ratings, including: TNT (4), Fox News (5), TBS (7), Cart♑oon Network (8) and FX (11).

“If I’m Brian Roberts, I don’t want to negotiate with [21st Century Chairman and CEO] Rupert Murdoch if he’s ꦕgot HBO; it’s pretty beefy🍸,” said one source.

Time Warner hasn’t tired of stating its goals to increase affiliate 🐼fees on its Turner cable properti🐲es, including CNN, TBS, TNT and Cartoon Network, by double-digits over the next five years.

The proposed deal would make Fox much less reliant on advertising cycles and more weighted toward a TV subscription business with Time Warner in the fold. Ad-dollar commitments 🦄have been down🅰 in both cable and broadcast this upfront season.

Some argue HBO could command a market cap nea✤r Netflix’s $27 billion if set free from the mothership.

Paul Gallant, an analyst at Guggenheim Securities whoꦿ follows regulatory issues closely, cites the Universal and EMI merger as a precedent for approval of a Fox-Time 👍Warner acquisition.

“The help🀅ful angle for Fox-Time Warജner would be that its merger looks more reasonable as distributors scale-up. The unhelpful angle would be: Where does it stop?” Gallant said.

“With each additional merger, the appeal of simply r🔥ejecting al𝓡l of them probably rises,” he added.