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Strict regulation needed for Disney-Fox merger in Mexico
Sources close to both companies have assured that there will be a 20% increase in prices by the end of the year - Photo: Richard Drew/AP

Strict regulation needed for Disney-Fox merger in Mexico

14/12/2018
19:36
Carla Martínez
Mexico City
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Experts warn that the merger could result in a sports TV monopoly, affecting 30 million subscribers

The Disney-Fox merger must be regulated in Mexico so that it does not affect pay television companies and their 30 million subscribers in the country, according to analysts.

Sources close to both companies, which still operate separately in the country, have assured that there will be a 20% increase in prices by the end of the year. The increase will mostly affect subscribers of restricted television, since the companies will transfer most of the cost directly to their customers.

This merger is likely to monopolize sports TV. Once they merge, the companies will own 27.79% of the content distribution industry, according to Statista.

This is more than any other TV producer owns in the country, with Warner Bros owning 15.12% of the market; Sony and Columbia Pictures, 12.10%, and Universal Pictures, 11.45%.

Fox and Disney are waiting for the authorization of regulatory authorities in Mexico, Brazil, and other Latin American countries, since the merger will be conducted differently than with the United States and the European Commission.

In the United Stated, Fox and Disney excluded Fox’s sports channels from the merger, which was revealed by the TV network on December 2017, when they announced that a new “Fox” would keep the cable sports networks Fox Sports 1, Fox Sports 2, Fox Deportes, and Big Ten Network.

Javier Tejado, an expert in telecommunications and broadcasting, stated that it was up to Mexican authorities to decide on the matter responsibly. “The Disney-Fox merger in the United States and the European Union is different to what is offered in Latin America, where there is a higher risk of a sports channel monopoly in several countries, including Brazil,” he commented.

Last week, Brazil’s Council of Economic Defense figured that the operation could not be approved in two of the seven markets involved: Movie distribution and cable sports TV.

In Mexico, these companies sell their content in packs that cost each subscriber one dollar.

Salomón Padilla, vice-president of the Independent Telecommunications Association of Mexico (ATIM), stated that the fusion would generate an impact on the concentration of TV content.

The association, which is made up of middle-size cable TV companies, mentioned that the IFT had not intervened on tied sales before.
 

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