Fox-Disney, a family affair? Hardly

A major deal between Disney and Fox, a vague rumour just a couple of weeks ago, now seems nailed on. And, if those nails don’t hold, it is said Comcast is waiting in the wings for a similar deal. In other words minds are made up, the patriarch has spoken; the Murdoch’s are breaking up the family business.

Murdoch Senior has never been a seller – he’s always been an empire builder and in recent years has made much of the need for scale to fight the newcomer FAANGS (as passim, the extra A is for Amazon which for me deserves its place in the acronym more than Apple).

Because of this some of the press has defined the sale as some kind of internecine Kane and Abel psychodrama – James, the son seen as most likely to succeed in both senses, has had enough of the paternal shadow. He has fallen fully out of love with the newspapers – particularly since the phone hacking scandal threw a very different perspective on his previously lauded management style. And he is probably tired of trying to justify to his liberal American coastal friends the swivel-eyed headbanging of Fox News.

Meanwhile, there is the other son, Lachlan – until recently mostly known by his nickname ‘Sorry, who?’ He, apparently, likes the news business; a chip off the old man’s printing block. So, Disney or Comcast – both in the running to absorb Fox and claim the uncomfortable mantle of ‘biggest Old World media company’ – will buy the Fox movie business, television studios, the US cable networks, Sky international and Star. The Murdoch’s will hang on to the very profitable but toxic Fox News, the Fox TV channel and the Fox station network in the US, plus, of course, the newspapers.

So, everyone happy. Particularly as some – presumably including him – have speculated that the hot seat at Disney would go to James after Bob Iger retires in 2019. Really? The man who Ofcom said after the hacking scandal ‘“repeatedly fell short of the conduct to be expected of him as a chief executive officer and chairman.”

Nonetheless, happy ever after for Rupert? Well, yes in the sense the family will pocket billions more. But is all, or any, of the above playing into the decision to sell. Of course not. Murdoch has never been a seller but, even more, he has never, ever, been sentimental. He is clear eyed and committed when he sees an opportunity – often one others don’t see or are too nervous to admit; tabloid newspapers, a national tv service via satellite, a fourth network in the US. Big ideas, bigger Cajones.

And now he has the vision and Cajones to admit that the days of Old World Media based on Old World business models – in his case a major structural over reliance on advertising – are over. And building a bigger empire that shifts that paradigm is not likely, or even possible, not least because the FAANGS have changed the meaning of the word scale. The Fox-Disney deal is estimated at $50-60 billion. Walt Disney, ahead of the deal, has a total market cap of $161 billion. Apple has $268 billion lying around in its overseas bank accounts.

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