International

Fox held talks to sell most of company to Disney

The Twenty-First Century Fox Studios lot is seen in Los Angeles, California U.S. November 6, 2017. REUTERS/Lucy Nicholson

NEW YORK: Rupert Murdoch’s Twenty-First Century Fox Inc. has held talks to sell most of its film and television assets to Walt Disney Co., which would gain new programming and expand its international reach, CNBC reported Monday. Shares for both firms surged following the report. Fox’s shares jumped 9.9 percent to close at $27.45 on Nasdaq, and Disney shares climbed 2 percent to $100.64 on the New York Stock Exchange.

The two sides are not currently talking, but had held talks in the last few weeks, CNBC reported, citing unidentified people familiar with the matter.

The discussions reflect a view among Fox executives that the media company could not reach the size needed to compete with Amazon.com Inc, Netflix Inc and other major media players, according to CNBC.

Representatives of Disney and Fox had no comment.

For Disney, a deal could bring additional programming it could use to lure audiences as the company tries to navigate consumers’ rapid migration to digital viewing and compete with heavy spending by technology companies pushing further into Hollywood.

It also could extend Disney’s reach into international markets.

Disney, which under U.S. rules could not own two broadcast networks, would not purchase all of Fox, CNBC reported. It would not seek to buy Fox’s sports programming assets for fear of running foul of antitrust laws with its own ESPN network, and also would not buy Fox News or Fox’s broadcast network or local broadcasting affiliates, the report said.

It did discuss buying Fox’s movie and TV production studios, cable networks FX and National Geographic.

There were also talks around acquiring international assets such as the Star network in India and European pay TV provider Sky PLC, CNBC said.

Fox has bid $14.5 billion to acquire the remaining 61 percent of Sky, but the acquisition has been delayed by British regulators.

“I see lots of synergies for Disney. It’s a no-brainer,” Pivotal Research analyst Brian Wieser said. “The confusion is what it means for Fox.”

Traditional media giants are currently scrambling to increase the scale of their operations and add new businesses, particularly after AT&T’s bid for HBO and CNN owner Time Warner Inc., which is awaiting regulatory approval.

Other media companies also could be interested in Fox’s assets, Wieser said.

Credit Suisse analysts said the talks increase uncertainty around the Sky transaction. Disney may want Sky as part of an international streaming strategy, but a deal also would deepen its exposure to traditional businesses that have been under pressure.

“It is not clear whether the main Disney shareholders will agree and give their support to management on this point,” the analysts said.

Disney has been struggling with subscriber declines at ESPN, its biggest network, and is planning to launch direct-to-consumer video streaming services to reach younger audiences that have shunned traditional cable and satellite offerings.

Chief Executive Bob Iger has said he plans to retire from Disney in July 2019, and the company is searching for a successor.

Much of Fox’s revenue has come from its cable division, which houses Fox News, FX and other channels.

Fox said in August that it expects to see high single-digit domestic affiliate fee growth every quarter in fiscal 2018.

 
A version of this article appeared in the print edition of The Daily Star on November 08, 2017, on page 5.

Recommended





Advertisement

Comments

Your feedback is important to us!

We invite all our readers to share with us their views and comments about this article.

Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.

Alert: If you are facing problems with posting comments, please note that you must verify your email with Disqus prior to posting a comment. follow this link to make sure your account meets the requirements. (http://bit.ly/vDisqus)

comments powered by Disqus

Advertisement

FOLLOW THIS ARTICLE

Interested in knowing more about this story?

Click here