EU queries Disney/Sky deal over concerns about cross-border rights

The European Commission said on Friday it was seeking reaction on commitments offered by Walt Disney in a pay-TV investigation aimed at making shows available across the EU.

The Commission, the EU’s anti-trust watchdog, is worried about contractual clauses in some deals between six film studios, including Disney and pay-TV broadcaster Sky in Britain, that could prevent programmes being shown across borders.

"These clauses appear to prevent Sky UK from allowing EU consumers outside the UK and Ireland to access pay-TV services available in the UK and Ireland," the Commission said in a statement.

Disney profits

The move comes as Walt Disney Co reported a quarterly profit that topped Wall Street estimates on Thursday night, driven by summer crowds at the company's theme parks and big audiences for Marvel movie Ant-Man and the Wasp.

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Shares of the company, which have gained nearly 8 per cent this year, rose 1.7 per cent in after-hours trading to $118 (€104). The family entertainment company reported adjusted earnings per share of $1.48 for the quarter ended September 30th. A year ago, earnings came in at $1.07 per share.

Disney is trying to transform itself into a broad-based digital entertainment company as ESPN and its networks lose viewers to Netflix, Alphabet's YouTube and other streaming options. It is on the verge of gaining new film and television properties in a $71.3 billion purchase of assets from Twenty-First Century Fox Inc. The media networks unit, Disney's largest, reported a 4 per cent year-over-year rise in operating income of $1.5 billion as broadcaster ABC saw higher program sales and fees from channel distributors. The ESPN cable network continued to shed subscribers, the company said, as viewing moves to digital platforms. To counter that ongoing shift, Disney this year released a streaming service called ESPN+ with live college sports, documentaries and other programming that does not run on television. The company will launch in late 2019 a family entertainment service called Disney+ with movies and TV shows.

New Star Wars

Disney Chairman and Chief Executive Bob Iger announced that Lucasfilm is developing a second Star Wars live-action series for Disney+, a prequel to "Rogue One" starring Diego Luna.

Disney is also working on a live-action Marvel series for the new service about Thor's devious brother Loki, starring Tom Hiddleston.

Disney+ could lift the company's stock if the streaming service can challenge Netflix and Amazon. com Inc, said Haris Anwar, senior analyst at global financial platform, Investing. com.

“Disney’s big beat on expectations is great news for the company which is getting ready to take on competitors in the video-streaming business who are taking away ad dollars and consumers,” Anwar said.

In the just-ended quarter, the theme parks division reported operating income of $829 million, an 11 per cent increase from a year earlier, as guest attendance and spending at Disney’s US locations rose during the busy summer months. Profit at Disney’s movie studio more than doubled to $596 million.

Overall revenue rose 12 per cent to $14.3 billion, above analysts’ average estimate of $13.73 billion. Net income climbed 33 percent to $2.3 billion. - Reuters