Disney Held Talks to Buy 21st Century Fox's Entertainment Assets

Officer Bob Iger holds a news conference at Shanghai Disney Resort as part of the three-day Grand Opening events in Shanghai China

The talks reportedly took place within the last few weeks, and it's not certain they will firm up a deal. For Disney, taking control of another movie studio and significant television production assets would act as an additional extension of the Mickey Mouse-style Voltron that I happen to know the company is building (not really, but really). Facebook, Alphabet's Google, Netflix and Amazon have dramatically changed the landscape within the media industry, causing big changes in how people consume media and becoming dominant in digital distribution. "Our analysis assumes Disney would have to pay FOX close to $37B for the assets", Jefferies analyst John Janedis wrote Tuesday.

The report stresses that talks are in the very early stages, and that the deal could be affected by the US's antitrust laws.

The analyst reiterated his buy ratings for both Disney and 21 Century Fox shares and his price targets of $119 and $36 respectively. DEADLINE's Chmielewski & Hayes noted in the short term, most Wall Street analysts and media observers see "plenty of upside for Disney but murkier prospects for Fox" (DEADLINE.com, 11/6).

Any arrangement would not entail a total purchase of 21st Century Fox by Disney, with the Murdoch company expected to hold on to its Fox broadcasting network, its sports programming assets, news and business channels and local broadcasting affiliates.


21st Century Fox's worldwide exposure through its operations in markets such as the UK, Germany and Italy is also appealing to Disney, which would likely want to add key assets such as UK satcaster Sky and Star in Asia as well as entertainment networks like FX and National Geographic.

The CMA is looking at whether the deal would give Fox, which is controlled by Rupert Murdoch and his sons James and Lachlan, too much market power and hurt media plurality in Britain, as well as whether the company would have a "genuine commitment to broadcasting standards". Chief Executive Bob Iger has said he plans to retire from Disney in July 2019, and the company is searching for a successor.

Disney already owns broadcast TV network ABC, so it would not be allowed to buy Fox's broadcast network without breaching Federal Communications Commission rules. Hulu also is partially owned by Comcast Corp and Time Warner Inc.

Disney announced earlier this year it was pulling its film content from Netflix in 2019 and launching a rival Disney-branded worldwide streaming service.

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