Robert Iger, chairman and chief executive officer of Walt Disney Co. and Brian Roberts, Comcast chairman and CEO. Getty Images

Twenty-First Century Fox, Comcast and Disney are currently locked in a transatlantic bidding war for one of the entertainment industry’s most coveted assets. The skirmish to control British broadcaster Sky comes as some of the worlds’ most influential media moguls try to find ways to stay relevant at a time when American consumers are cutting their cable subscriptions and spending more time online. The rapidly changing media landscape is forcing legacy entertainment giants to consider spending tens of billions of dollars in order to keep pace with upstarts like Netflix and Amazon. This week, that bidding battle will be settled once and for all as Britain's Takeover Panel instigated a formal auction process to decide the fate of the Sky acquisition. Twenty-First Century Fox and Comcast will go head-to-head to gain ownership of the British firm. If Murdoch's Fox emerges victorious, Disney could gain control of Sky, as the media conglomerate has agreed to buy Fox for $71.3 billion in cash and stock. CNBC takes a look at how things stand in one of the most intriguing global media battles in decades.

Disney vs. Comcast

Disney and Comcast are in competition over Sky for one overarching reason: internet streaming. American consumers have been scrapping their cable television subscriptions in order to snap up entertainment offers from Netflix, Amazon and Hulu instead. That has significantly dented media companies’ profits, forcing them to consider consolidation as a means to remain competitive. After Comcast withdrew its bid to buy Murdoch's Fox, this gave Disney the opportunity to gain control over Fox's entertainment assets. That deal not only gives Disney access to Hulu, one of the very few genuine rivals to Netflix, but also to Britain's Sky, which is a major player in both European pay-TV and streaming. The Fox deal would grant Disney 39 percent of Sky. Murdoch's corporation is set to battle it out for the remainder of the British media firm over the weekend, meaning Disney could end up owning Sky once the Fox acquisition is closed.

Why is Sky so important to a deal?

Sky boasts a market-leading platform that is thought to have approximately 23 million customers across the continent. The appeal of Sky to the likes of Comcast or Disney is such that owning the firm would give them both a rare opportunity to diversify out of the U.S. and reach consumers more directly.

“If you look at Comcast and Disney, what they seem to want to do is increase their distribution network. Particularly if you take Sky … It gives you the number one pay-TV operator in the U.K., Ireland, Germany, Italy (and) exposure in Spain and Switzerland. That’s very powerful,” Ian Whittaker, media equity researcher at Liberum, told CNBC. Sky also has a range of other sought-after television content, most notably rights to show English Premier League soccer matches. It also owns TV streaming firm Now TV. Comcast’s Brian Roberts has previously said the appeal of Sky left him feeling “terribly impressed,” while Disney’s Bob Iger called the British broadcaster the “crown jewel” of Fox’s television and movie assets. "Whoever comes out on top will provide Sky with financial security to compete in further costly premium rights auctions; in particular sports which is arguably the company's prized asset with the Premier League," Paolo Pescatore, an independent tech, media & telco analyst, told CNBC in an email. "This is fundamentally important given that more providers are piling into video further increasing the cost of rights. Sky and its customers will also benefit from being part of the wider group; access to more services, products and features."

So what has been offered so far?

On July 11, Comcast raised its cash offer for Sky to $34 billion, topping Fox’s much-improved offer for the same company. Comcast said its renewed bid had been recommended by the independent committee of Sky. The company also said it had earmarked funds to fulfill the terms of the deal. Just hours earlier, Fox had raised its offer to about $32.5 billion. Fox had originally reached a deal in December 2016 to buy the part of Sky it does not already own. When the deal was first proposed, U.K. regulators expressed concerns that the merger would give Murdoch too much control over British television and newspapers. However, the U.K. government has since given the green light to a takeover of Sky by Fox.

Rupert Murdoch Brendan Smialowski | AFP | Getty Images

What happens next?

The bidding process will officially begin on Friday evening and comes to end on the following day, the U.K.'s Takeover Panel said Thursday, with a maximum of three rounds to decide the fate of the deal. Each bid must be made in cash. In the first round, the company with the lowest bid — in this case Fox — can make an increased bid for Sky. Comcast then has the chance to increase its bid for Sky in the following round. If the auction procedure has not been concluded during that second round, it is then carried on into a third and final round.

Simon Dawson | Bloomberg | CNBC