The Dow Jones Industrial Average (^DJI 0.69%) is up 65 points late in today's trading session following a solid earnings report from Intel showing far better performance from PCs than expected. Earnings season seems to be proving profitable so far; we saw expectation-beating results among financials last week.

But The Walt Disney Company (DIS 1.54%) is down 1% after rising briefly this morning. The reason is a potential merger of two of the company's rivals.

Fox tries to buy Time Warner
It was confirmed by Time Warner (TWX) today that Twenty-First Century Fox (FOX) tried to buy the company for as much as $80 billion. It's reported that Fox offered $85 per share for Time Warner but that Time Warner's board of directors wasn't happy that the offer was for nonvoting shares, leaving the Murdoch family firmly in control of a combined company.  

So why do Disney's investors care? Disney currently owns the most valuable assets in media with ABC, ESPN, and a number of other television stations. A combined Time Warner and Fox could take over that top spot and give Murdoch the ability to leverage the company's assets in negotiations with cable companies.

Theme parks are the second-most profitable business for Disney, trailing only media.

But in the long term that's not all bad for Disney. Further consolidation of media companies would leave only four major players -- including NBCUniversal and Viacom -- and give them further leverage over cable companies and consumers of digital media. That may lead to higher prices and slower innovation in areas like streaming media, but it wouldn't be bad for shareholders.

It's also worth noting that Disney's model of creating value, from the box office to television to theme parks, is unmatched in the industry, so the profit machine that has enriched shareholders is still intact.

Disney's stock may be down today on the Fox-Time Warner news, but any deal may actually be a positive for shareholders because it would reduce competition in the media space. It's times like this when a long-term view is needed, because in the short term the market's reaction can be the opposite of what it should be.