Fox held talks to sell most of company to Disney: CNBC

The flag of the Twenty-First Century Fox Inc is seen waving at the company headquarters in the Manhattan borough in New York
The flag of the Twenty-First Century Fox Inc at the company headquarters in Manhattan. REUTERS/Eduardo Munoz

November 6, 2017

By Lisa Richwine and Jessica Toonkel

(Reuters) – Rupert Murdoch’s Twenty-First Century Fox 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 on Monday.

Fox’s shares jumped 9.9 percent to close at $27.45 on Nasdaq, and Disney shares climbed 2.0 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. http://cnb.cx/2hgHcPA

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 and 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 it does not own, 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 scrambling to increase their scale 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 in a research note.

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.

Fox and Disney are co-owners of Hulu, a streaming service that offers on-demand and live TV packages. Hulu also is partially owned by Comcast Corp and Time Warner Inc.

(Reporting by Lisa Richwine; additional reporting by Arjun Panchadar and Laharee Chatterjee in Bengaluru; Editing by Sriraj Kalluvila and Dan Grebler)

  • TYvets

    Explains some of Hannity’s comments recently.

  • Letmesay

    Disney..is garbage one reason they want to reach the younger generation, like they don’t have the monopoly already. It would be great if Hannity started his own news show.

  • landy fincannon

    Oann seems to be geared more to finical reporting than political.

    I could be wrong but their finical reports seem to be more in-depth.

  • Beachguy53

    I’ve cut cable for years.

    • IceColdLogic

      I could give up cable. But I would find giving up my internet connection difficult.

      • Beachguy53

        There are providers of cable only. Your current provider may also offer it.

  • JaySands1234

    Tightening the nose of the conservative viewers neck. Most of the news media outlets will be controlled by liberals and then the fake news will overwhelm us.

    • rremmy72

      Not if we support alternatives like OANN!!

    • Frank2525

      They are now. Murdock, own in U.K. and USA, and his two sons are in control after Roger Aisles was sent packing. Why do you think they jammed Bill O’Reilly, and tried it on Hannity. Backed off when Hannity informed them of lawyers he retained, preparatory to suing if they pushed the issue. That was a set up, and they were willing to pay the women to make those statements. Hope they use those funds frugally, since employers take that kind of action into future. Will they say stuff about the new employer?

    • Letmesay

      My thoughts exactly…there goes FOX..so glad I have not been stuck on them since Megan K.

    • TYvets

      money

  • iwontell

    That’s the DUMBEST IDEA yet……..and the end of FOX…….why would they want to be associated with the same company that has the WORTHLESS MEDIA ABC SOB’s on their books

    • Wheel of misfortune

      So well said!

  • D Michelle Jeffrey Renick

    I’m not excited about the merging of media giants that are controlling the information that we are getting.

    • iwontell

      YEAH – imagine Fox and ABC together…………whew.

  • The Punisher

    well their political views have been in almost indiscernible, globalist and against Trump.
    its all RINO’s all the time.

  • PrincetonbytheSea

    Hence the more vacillatory tone by Cavuto…………………