Whilst not currently talking at the moment, over the last few weeks Disney and Fox have had discussions about Disney buying Fox’s movie company and other assets, but not their news or sports channels. If this does happen, this means that Disney would have complete rights to Star Wars: Episode IV – A New Hope, as well as the X-Men and other properties. For those in the UK it would also mean that Disney would own 39% of Sky. This is interesting news for sure.
Here’s the lowdown from CNBC….
21st Century Fox has been holding talks to sell most of the company to Walt Disney Co., according to people familiar with the situation Fox is said to believe that a more tightly focused group of properties around news and sports could compete more effectively. The two sides are not currently talking at this very moment, sources said.
The talks have taken place over the last few weeks and there is no certainty they will lead to a deal. The two sides are not currently talking at this very moment, but given the on again, off again nature of the talks, they could be revisited.
For Fox, the willingness to engage in sale talks with Disney stems from a growing belief among its senior management that scale in media is of immediate importance and there is not a path to gain that scale in entertainment through acquisition. The company is said to believe that a more tightly focused group of properties around news and sports could compete more effectively in the current marketplace.
The media landscape has changed considerably in recent years with giants such as Facebook, Google (Alphabet), Amazon and Netflix changing the way people consume media and dominating the digital distribution of digital video content. Being able to compete in that changing landscape, many people believe, requires scale that a Disney has, but 21st Century Fox does not.
For Disney, the opportunity to take control of another movie studio and significant TV production assets as it readies a direct-to-consumer entertainment streaming offering is attractive as is Fox’s significant exposure to international markets, such as the U.K., Germany and Italy — both through its networks and 39 percent ownership of Sky. Disney recently announced it will pull all of its movies from the Netflix platform and will establish two direct-to-consumer offerings: one for sports and one including its key franchises such as Star Wars and Marvel.
Disney would not purchase all of Fox, according to people with knowledge of the talks.
The company could not own two broadcast networks and would therefore not buy the Fox broadcast network. It would not buy Fox’s sports programming assets in the belief that combining them with ESPN could be seen as anti-competitive from an antitrust standpoint and it would not buy the Fox News or Business channel. Disney would also not purchase Fox’s local broadcasting affiliates, according to people familiar with the negotiations.
In addition to the movie studio, TV production and international assets such as Star and Sky, Disney would also add entertainment networks such as FX and National Geographic.
The contemplated structure of the deal or the price that has been discussed could not be learned. Given it would involve the sale of many, but not all of Fox’s properties, it’s unclear how Fox would mitigate potential tax consequences of a deal.
Officials at Disney and Fox declined to comment. Fox shares ended Monday higher by 9.9 percent. Disney added 2 percent on the day.
PS – If this does happen, and Disney are reading this, add the fanfare back to the new Star Wars films please!
