Comcast has announced an offer worth US$65 billion (S$87 billion) for the bulk of 21st Century Fox's businesses, setting up a showdown with the Walt Disney Co for Mr Rupert Murdoch's media empire.
The all-cash bid on Wednesday by Comcast, the largest cable company and broadband provider in the United States, came a day after a federal judge approved a merger between AT&T and Time Warner.
Comcast had awaited the decision in that case before mounting its bid for 21st Century Fox. The one-upmanship reflects an industry under threat from Silicon Valley, where deep-pocketed technology giants like Netflix and Amazon are stealing audiences, ad dollars and big-name creative talents.
In December, Disney struck an all-stock deal, worth US$52.4 billion at the time, for Fox's assets, shortly after Fox rebuffed an offer from Comcast that was worth roughly US$60 billion, all in stock.
Now Comcast is back - creating a likely bidding war for a conglomerate that Mr Murdoch has spent a lifetime building, and setting up a showdown between Comcast chief executive Brian Roberts and his counterpart at Disney, Mr Robert Iger, who has staked his legacy on this deal.
There is bad blood between Disney and Comcast, stretching back to at least 2004, when Comcast tried to swallow Disney. The Disney board fought off that attempt, but Mr Iger and his top lieutenants have never forgotten it.
Fox said in a statement it planned to review Comcast's offer. Disney representatives declined to comment.
There are questions about how hard Disney will fight. As Mr Doug Creutz, a media analyst at Cowen and Co, put it in a client note on Wednesday, Mr Iger "has never (as far as we are aware) been put in a position where a proposed acquisition faced a significant competitive challenge such as this, so it's hard to gauge his sensitivity to price".
Mr Iger does have a history of paying premiums for properties he wants, albeit on a much smaller scale. The most obvious example is Pixar, which Disney bought in 2006 for US$7.4 billion, or US$9.4 billion in today's money. The price was criticised then as exorbitant - wrongly, as it turned out, given the value that Disney has since got from the animation studio.
The businesses that Mr Murdoch has agreed to sell include the 20th Century Fox film and TV studios, almost two dozen regional sports networks like the New York Yankees' YES channel, a lineup of cable networks that include FX, and a 30 per cent ownership stake in the streaming service Hulu. But the key attractions for Comcast are Fox's broad international assets. Among them are Fox's 39 per cent stake in the European pay-TV operator Sky and its control of Star, one of India's largest media firms, which reaches 700 million people every month, according to the company.
Mr Murdoch's overseas business accounts for 27 per cent of annual sales, or about US$7.8 billion. Comcast, whose cable business is strictly a domestic operation, draws in only 9 per cent of its revenue from foreign agreements, largely through NBCUniversal.
Comcast has already made an offer to buy the other 61 per cent of Sky in a separate deal. The Fox News cable network, the Fox broadcast stations, the Fox Business Network and the sports network FS1 would not be part of a transaction.
A Fox combination could help Comcast amplify its streaming services. Netflix, YouTube, Apple and Facebook are spending billions of dollars a year to create original series and are competing directly for content and sports programming. Hulu, which has more than 17 million subscribers, would come under Comcast's control if it pulls off the acquisition.
The US Justice Department had sued to block the AT&T-Time Warner merger. "The AT&T ruling pretty much eliminated the vertical issue from at least where the world stands now," said former Justice Department antitrust lawyer Ketan Jhaveri. "It's not hard to make the comparison from AT&T buying Time Warner to Comcast buying Fox."