Why Sky Matters to Disney/Fox:
• One of Disney's top priorities is building direct-to-consumer relationships globally. It even created a new "Direct-to-Consumer and International" unit earlier this year, headed by Kevin Mayer, who is here with Iger in Sun Valley.
• Sky has a direct-to-consumer relationship with 23 million paying subscribers across five European countries, making it a key part of the overall Fox acquisition -- or, as Iger once said, "the crown jewel" of the Fox assets.
• Without Sky, Disney would cede the direct-to-consumer market in Europe to Comcast, which would then become the biggest pay-TV provider in the world.
What Comcast Is Thinking:
• Brian Roberts has set his sights on Sky and might even be willing to drop his bid for the rest of Fox, a source familiar with his thinking says. At the very least, he is putting Fox on the back-burner for now to focus on Sky.
• Roberts may be trying to telegraph that to Iger and Murdoch through his latest bid.
• Another reason Roberts may back off Fox is the "chain principle," which ties the value of all Sky shares to the value of Fox, since Fox owns 39% of Sky. The more Disney and Comcast drive up the price of Fox, the more they pay for Sky.
The Latest: The UK Government has approved the proposed Fox-Sky merger, saying the two parties have ensured "a scrupulously clear, fair and transparent process."
Welcome to PACIFIC.
We've noticed that the sartorial spectrum here in Sun Valley runs from Håndværk t-shirts (Iger) to polos (Roberts) to dress shirts, sans coat and tie (Murdoch). Historically, people have characterized this as a departure from the usual suits and ties executives wear. But the truth is that in Hollywood and Silicon Valley, if not in New York, media executives pretty much wear whatever the hell they want. Sun Valley style is now the norm.
Talk of the Lodge: Bob Kraft's limited-edition Nike Air Force 1s, which were custom-made for him after the Patriots won the 2017 Super Bowl.
Added Value: What's an empire worth?
The Disney-Comcast bidding war for Fox has seen the value of 21st Century Fox surge from $52.4 billion to $71.3 billion (a 36% increase) and the value of Sky surge from $23 billion to at least $34 billion (a 47% increase).
That has made the war between Iger and Roberts is a contest of debt tolerance.
Former Fox chief Peter Chernin, who advised Comcast on its takeover of NBCUniversal, talks to CNBC's Julia Boorstin:
• "This is in some ways a game of three-dimensional chess. Everybody talks about, 'Who wins?' This is not winning. It's who wants to pay more money for it. Who has a bigger appetite. Who's willing to take on more debt to do it. Who wants to constrain their balance sheet."
• "I think there's still a couple of rounds to go."
Is it worth it? The conventional wisdom today is you need to own the pipes and the content. If that proves right, then it may be worth it despite the debt. At the end of the day Fox and Sky are going to give one of these two media giants a major head-start over the other in global direct-to-consumer.
Collateral Damage: How Disneyfox hurts Netflix
If Disney becomes a real direct-to-consumer player through both Fox and Sky, it poses a real threat to Reed Hastings at Netflix.
• Disney, which arguably has the richest content portfolio in the world, would then have majority ownership of three major direct-to-consumer platforms: Hulu in the US, Sky in Europe and Hotstar in India.
• Users around the world would have to subscribe to Disney-owned platforms to access Disney, Marvel, Pixar and LucasFilm content.
• It "would be a major win for Hastings & Co. not to have all these assets under one hood and especially under the control of Disney," GBH Insights analyst Dan Ives notes.
What Hollywood is Talking About
The Emmys: Nominations for the 70th Primetime Emmy Awards will be announced today at 8:25 a.m. PT, and streamed at emmys.com.
What to watch for, via NYT's John Koblin:
• "'Game of Thrones,' which wasn't eligible for last year's Emmys, is back and ready for a showdown with 'The Handmaid's Tale.'"
• "For the first time since 2011, the perennial winner Julia Louis-Dreyfus is not up for best actress in a comedy. Who will walk away with this year's Emmy?"
• "HBO has been the most nominated network for 17 straight years. Netflix hopes to break that streak."
Kids These Days: Big Bird kills Saturdays
My colleague Jordan Valinsky notes that traditional broadcasters want to dial back the number of federally mandated hours of children's shows they're required to air because of the influx of kids shows on services like YouTube, HBO Go and Netflix.
What's Next (for Kids), via Bloomberg's Mehr Nadeem and Todd Shields:
• "A measure scheduled for a preliminary vote Thursday proposes that broadcasters should be allowed to shift the shows onto little-watched secondary digital channels, and even asks about shedding the three-hour minimum altogether."
• "Children between the ages of eight and 18 spend a significant amount of time watching video content exhibited on YouTube and other online platforms," CBS, Disney, 21st Century Fox and Univision said in a filing.
• Supporters say the changes could negatively impact low-income children who don't have access to the costly services or cable.
One other thought: There are downsides to kids watching cartoons on services like YouTube, where they can immediately jump to less kid-friendly content.
World Cup Crisis: YouTube goes dark
YouTube TV, the company's live-streaming service, went dark for an hour during yesterday's World Cup semifinal between England and Croatia.
• "We are so sorry about the service interruption and we understand your frustration," the company tweeted.
The Big Picture, via The Verge's Chris Welch: "Several of the major internet TV platforms have dealt with outages at the worst possible times for their customers. Simply put, these issues need to stop happening if YouTube TV, Sling TV, Hulu, DirecTV Now, PlayStation Vue, and the rest want to be seen as viable replacements for traditional cable."
What Next: The LABron James Divide: A mural of LeBron in Venice was vandalized twice in five days, forcing the artist to cover it with white paint. "I thought I had learned a long time ago to never touch religion or politics," the muralist Jonas Never said. "I guess it is never touch religion, politics or anyone against Kobe."
Meanwhile ... LeBron and writer Steve Mallory have sold a new comedy film to Paramount Players, and James is in early talks for a potential starring role.
See you tomorrow.
CNNMoney (New York) First published July 12, 2018: 10:32 AM ET