21st Century Fox has been consistently trying to avoid selling to Comcast because Fox officials believe a merger with the largest US cable company may not be approved by the federal government.

Comcast and the Walt Disney Company have been in a bidding war for the assets being sold by Fox. The most recent development came last week when Fox leadership rejected a $65 billion offer from Comcast and accepted Disney's new offer of $71.3 billion.

Comcast could try to outbid Disney again and seek approval from Fox shareholders. But Fox and Disney said in a new Securities and Exchange Commission filing that a Comcast/Fox deal would face a difficult path to regulatory approval.

The Fox board prefers to merge with Disney in part because "a strategic transaction with Comcast would be subject to a greater degree of regulatory uncertainty, including the possibility of an outright prohibition and a higher risk of divestitures and delay to closing, as compared to a strategic transaction with Disney," the filing said.

Comcast/NBC merger conditions expire

Comcast's "asset mix" would make a Comcast/Fox deal difficult, the filing said. This likely refers to Comcast's status as the largest home Internet provider and the largest cable TV provider in the US. A Comcast/Fox agreement would let Comcast decide how much to charge other cable, satellite, and online TV providers for access to that programming.

Comcast has already expanded into programming, notably with its 2011 purchase of NBCUniversal and its ownership of regional sports networks. The US government imposed conditions on the Comcast/NBC merger in order to prevent anti-competitive behavior, but those conditions are expiring entirely in September of this year.

Buying the Fox properties would also give Comcast majority control of Hulu, one of the major online video services that competes against the cable TV industry.

Disney would also face some regulatory scrutiny given its ownership of major programming assets such as ESPN and ABC. But the Fox and Disney boards are recommending that the companies' shareholders approve the Fox/Disney merger.

Comcast rebuffed by Fox last year

Comcast first approached Fox about buying Fox properties in November 2017, the month before Fox struck its first deal with Disney. Fox management quickly concluded that a deal with Comcast was more risky than one with Disney.

Comcast's hopes of completing a deal with Fox were raised by AT&T winning a court ruling allowing it to complete its purchase of Time Warner Inc. But Comcast's continued attempts to purchase the Fox properties didn't eliminate Fox's concerns. Comcast's latest offer "did not address the risks raised by a potential transaction with Comcast despite the fact that a transaction with Comcast, given its asset mix, raised a significantly more difficult set of regulatory issues than a transaction with Disney," the SEC filing said.

As we've previously written, the sale to either Disney or Comcast would include 21st Century Fox's film and television studios, cable entertainment networks, the Fox Sports Regional Networks, and international properties including Star in India and Fox's 39-percent ownership of Sky across Europe.

The Fox sale would not include major assets such as the Fox News Channel, Fox Business Network, and Fox Broadcasting Company. Those would be spun off into a new company, and Comcast or Disney would acquire 21st Century Fox after the spinoff.