Deal to sell most of Rupert Murdoch-controlled company would establish new Hollywood powerhouse but would not include Fox News, CNBC report says
The Rupert Murdoch-controlled 21st Century Fox has held talks to sell most of the company to Walt Disney, CNBC reported on Monday, citing unnamed people familiar with the matter.
The news comes as Fox is struggling to secure full control of Sky, the British satellite television giant. That £11.7bn ($15.41bn) deal has run foul of regulator’s’ concerns about media plurality in the UK and the Murdochs’ commitment to broadcasting standards.
Fox’s shares were briefly suspended and then rose close to 10% in response to the news, which would combine some of the most famous media brands in the world.
According to CNBC, the two sides are not talking currently, but have held talks in the last few weeks, reflecting a view among Fox managers that the company could not gain the size needed to compete with Amazon, Netflix and other major media players.
As well as adding Fox’s TV assets to Disney’s portfolio, a deal would create a Hollywood powerhouse. Fox’s recent hits have included The Planet of the Apes and X-Men franchises while Disney controls Pixar and the Star Wars series.
Cable subscriptions, an area where both Fox and Disney have made fortunes, are slipping as more people “cut the cord” and rely on the internet to deliver their entertainment. At the same time, while Disney has outperformed, the US box office has had its worst year in a decade with notable flops including Pirates of The Caribbean 5 and Transformers 5.
A Disney spokesman did not immediately respond to a request for comment while Fox declined to comment.
Disney, which under US rules could not own two broadcast networks, would not purchase all of Fox, CNBC reported, citing the same sources.
Disney would not seek to buy Fox’s sports programming assets for fear of running foul of antitrust laws with its own ESPN network, and would also not buy Fox News or Fox’s local broadcasting affiliates, the report said.
In addition to the movie studio, TV production and international assets such as Star and BSkyB, Disney would take the entertainment network FX and National Geographic, the report added.
Disney reveals its latest earnings on Thursday and is expected to be quizzed by analysts about the report.