21st Century Fox wants to sell a few of its parts and as it continues to talk with Comcast, reports have emerged that Disney has resumed talks with the company.
According to a report on NYT, people aware about the internal matters of 21st Century Fox have said that the Murdochs, who control Fox, are expected to make a decision about whether to pursue a sale by the end of the year. Disney’s return to the table indicates the importance of diversification and content acquisition in the media business.
It also leaves medium-sized players like Fox to decide whether they can buy the scale they need — or sell and focus on particular business niches. If the Murdochs decide to pursue sales negotiations, it would represent a potential unwinding of a media kingdom that the family has assembled for decades.
The Fox business is a massive one but Disney and Comcast are reportedly only interested in the 20th Century Fox movie studio; cable channels like FX; Sky, the British broadcaster; Star, an Indian broadcaster.
If the acquisition does happen, Fox would be left with several highly profitable businesses, including Fox News, its broadcast network and its sports pay-TV channel.
Disney has confirmed it intends to build two Netflix-style streaming services to address structural challenges to its vast television businesses — namely that more consumers, particularly younger ones, are foregoing pricey cable subscriptions.
Beyond the negotiation hurdles, regulatory approvals are also going to be a major thing considering that Trump administration has argued that the combination would give one company too much power over both the creation of content and its distribution.
Further, the Justice Department has sued to block AT&T’s $85.4 billion takeover of Time Warner, a so-called vertical merger that would unite the largest television distributor in the United States with a major content producer. This means Fox will have a tough time selling its assets – even in parts.
The companies are fighting the government’s claims, asserting that they run contrary to established law. But deal makers have wondered whether the Trump administration’s stance would pose difficulties for any sale of Fox assets.