Reports have emerged that 21st Century Fox has been holding talks to sell most of the company to Walt Disney Co. Any such deal would not involve all of Fox’s assets, according to people with knowledge of the talks.
It is understood that Fox believes that a more tightly-focused group of properties around news and sports could compete more effectively, with tech giants such as Facebook, Google, Amazon and Apple showing an increasing interest in acquiring premium sports rights.
According to CNBC.com, 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.
It could be a timely move for Disney, presenting it with the opportunity to take control of another movie studio and significant TV production assets as it readies a direct-to-consumer entertainment streaming offering.
Media ownership rules in the US mean that Disney – which already owns the ABC network – would not be able to own two broadcast networks and would therefore not buy the Fox broadcast network. Acquiring Fox’s sports programming assets to combine them with ESPN could also be seen as anti-competitive.
The assets are also thought to include Fox’s 39 per cent stake in Sky. Fox’s planned acquisition of the remaining 61 per cent of the pay-TV operator is currently the subject of an investigation by the UK Competition and Markets Authority as to whether broadcasting standards or media plurality will be affected should the deal go ahead.
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.