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Democrat Lawmakers Question Disney, Fox Studios Deal

18 Dec, 2017 By: Erik Gruenwedel



Following The Walt Disney Co.’s announced $52.4 billion acquisition of 20th Century Fox Studios, several Congressional Democrats voiced concern about the mega deal.

Amy Klobuchar (D-MN), the ranking member on the subcommittee on antitrust, competition policy and consumer rights, said she is concerned about the merger’s consumer impact.

Klobuchar has chaired or been the ranking Democrat on hearings regarding mergers in the telecommunications, health insurance, airlines and music publishing industries, among others.

The lawmaker said she is working with colleagues Mike Lee (R-Utah) and chairman Chuck Grassley (R-IA) to schedule a hearing on the merger so that there is “appropriate oversight” over the antitrust review process.

Congressman David Cicilline (D-RI), the top-ranking Democrat on the House antitrust subcommittee, contends the merger of underscores a “Monopoly moment” in corporate media — consolidating too much control of TV and movie entertainment in the hands of a “single media giant.”

Disney says the merger represents a requisite step in the rapidly evolving media landscape where consumers have increasing options to acquire entertainment.

Cicilline isn’t so sure, saying the merger would allow Disney to limit what consumers can watch, while increasing their cable bills.

He said Disney would gain more than 300 channels, 22 regional sports networks and majority control over Hulu, the standalone streaming service co-owned by Comcast and Time Warner.

“We need more competition than before, not less, to create an economy that has more choices and innovation, lower prices, and better jobs,” Cicilline said. “The House antitrust subcommittee should look at this proposal very closely.”

In a press briefing, White House press secretary Sarah Huckabee Sanders said President Trump congratulated Fox chairman Rupert Murdoch on the deal, adding Trump believes the deal could be a “great thing for jobs.”

BTIG Research analyst Richard Greenfield mocked Sanders’ jobs comment as “fake news.”

The analyst said Disney is looking at $2 billion in cost synergies in the deal — much of that personnel costs.

“In order to reduce costs by upwards of $2 billion, we believe Disney will need to cut well-over 5,000 jobs, and the number could easily swell toward 10,000 given the high degree of overlap between the two companies around the world,” Greenfield wrote in a note.

 


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