How a cabbie convinced Comcast's boss to reach for the Sky

If scriptwriters at Universal Studios, Disney or Twentieth Century Fox were to come up with a storyline of the kind engulfing each of their parent companies just now, it would be dismissed as too far-fetched.

The parents of the trio - Comcast (Swiss: CMCSA.SW - news) , Walt Disney Co and 21st Century Fox - find themselves embroiled in a multi-billion dollar tangle at the centre of which sits Sky plc (Frankfurt: 893517 - news) , the owner of Sky News.

In December 2016, Fox said it wanted to buy the remaining 61% of Sky that it does not already own. That deal has been snarled in the UK regulatory process with Matt Hancock, the Culture Secretary, due to rule by June on whether it should be allowed to go ahead.

:: Comcast challenges Fox with £22.1bn Sky bid interest

Assuming it does, Sky would be taken over by Fox, before being sold on to Disney as part of a wider deal involving all of Fox's entertainment assets.

At the time, Comcast, America's biggest cable operator, also expressed an interest in buying those assets from Fox. It was even thought to be prepared to pay more than Disney.

But Rupert Murdoch, the executive co-chairman of Fox, calculated that Comcast would have a tougher time getting a deal past US competition regulators than Disney - and Comcast walked away.

Another factor was that, with Mr Murdoch's family receiving shares as part-consideration, Disney shares were more attractive in view of Comcast's shareholder structure - which effectively gives the Roberts family, which founded the company, control of it.

Since then, two things have happened. The first is that Comcast's board has, according to reports, given serious consideration to reviving its interest in Fox's entertainment assets.

The second is that, in the recent round of auctions for live TV rights for the Premier League, Sky emerged with a great result. In the next three year cycle, from 2019-22, it will be paying £200m less per season than in the current 2016-19 cycle.

That has prompted some minority shareholders in Sky to argue that Fox needed to sweeten its terms from the 1075p-per-share it agreed to pay back in December 2016.

They include Crispin Odey, one of the City's best-known fund managers and Elliott, a notoriously aggressive US hedge fund.

Enter Comcast. The US giant has today waded in with a 1250p-a-share offer that values the whole of Sky at £22.1bn - compared with the £18.5bn Fox was prepared to pay.

It has said that, while it would like to own all of the shares in Sky, it will be satisfied with 50% plus one share and that its takeover is not dependent on Fox selling its existing 39.1% stake in Sky.

Crucially, it is promising to increase Sky's investment in UK TV and film production, as well as pledging to continue broadcasting news under the Sky brand - a guarantee Fox, too, has made along with promises to maintain the independence of Sky News .

Comcast's intervention raises a number of questions for investors.

The first is how Fox will respond. Sky's share price has shot up by more than a fifth, to 1330p, implying that investors expect Fox to come back with a higher offer.

But Mr Murdoch might yet decide to alter the terms of his existing deal with Disney to exclude Sky from the sale.

The second is Comcast's motivation. Is it simply interested in Sky, as it says, as a platform to grow its business in Europe? Or is this part of an attempt to get Fox back around the negotiating table in order to try and gazump Disney?

A third question is how Disney itself reacts. It might choose to launch a takeover bid of its own for Sky which it, too, covets as a way of reducing its dependence on the US.

Both Disney and Comcast have different reasons for wanting to do these deals. In the case of Disney, it wishes not only to widen its geographic spread, but also to acquire - with Fox's entertainment assets - a greater array of film and TV assets with which to take on internet giants like Netflix (Xetra: 552484 - news) and Amazon Prime.

In the case of Comcast, it too wishes to diversify away from the US, where cable subscribers have been "cord-cutting" in their droves.

In response it has launched its own "over-the-top" streaming service, just as Disney and Fox have with Hulu, to try and get around this - but that service requires content. Hence the interest in both Sky and in Fox's entertainment assets.

One fascinating dimension to this story - again, back to the Hollywood analogy - is the cast of characters it brings together.

Mr Murdoch built Fox into one of the world's biggest entertainment companies, founding Sky along the way, but also owns - via News Corporation (Frankfurt: A1W048 - news) - some of the world's most famous newspaper titles, including The Sun, The Times, the Wall Street Journal, the Australian and the New York Post.

It all started from a single newspaper in Adelaide and several members of Mr Murdoch's family have gone on to be executives either at Fox, Sky or News Corp.

Comcast, too, is very much a family concern. Now (Frankfurt: 11N.F - news) the world's biggest broadcasting and cable television company, following its 2011 takeover of NBC Universal and its 2016 acquisition of Dreamworks Animation, it was built by Ralph Roberts from a single cable company in Tupelo, Mississippi.

His son Brian is now chairman and chief executive of Comcast and the Roberts family exerts control of the business.

And there is history, too, between Mr Roberts and Bob Iger, the Disney chief executive.

Comcast sought to buy Disney in 2004 for $54bn. Disney rejected the offer and Comcast walked away.

Mr Iger, who has called Sky a "crown jewel", scuppered Mr Roberts's ambitions on that occasion. It would be ironic were Mr Roberts to now do the same to him.

The final characters, were this being turned into a film, would be the ordinary members of the public. Mr Roberts told reporters this morning that, during a recent visit to London, a taxi driver had spoken to him favourably and in detail about Sky in comparison with rival cable service Virgin Media.

He was then impressed by a demonstration of the Sky Q service in a shopping mall by a Sky sales rep. Those two events, apparently, helped convince him to bid.