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Disney eyes 21st Century Fox assets

21st Century Fox has held talks about potentially selling its television and film production assets to Disney, according to reports.

James Murdoch

Representatives of the two media giants have been negotiating a possible deal that would leave Fox, run by James Murdoch, with a highly focused news and sports media company, according to CNBC.

The addition of Fox’s TV assets and international exposure would be attractive to Disney as it gears itself up to take on the new digital players, such as Google, Apple, Facebook, Amazon and Netflix, with its forthcoming direct-to-consumer offerings.

Sources close to the deal believe Disney’s clout in the changing TV consumption landscape would allow it to compete with the new digital players, whereas many think Fox does not have the scale to do so.

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

Disney’s declaration of intent to end its agreement with Netflix for subscription streaming of new releases came barely a year-and-a-half after the deal began, following a four-year wait after the pact was originally signed.

Besides offering its Star Wars and Marvel franchises, Disney’s service would feature a “vast” collection of Disney and Pixar movies as well as Disney Channel, Disney Junior and Disney XD TV programming.

The company also indicated it would make “significant” investment in an annual slate of original films, TV programmes, shortform content and other Disney-branded exclusives.

21st Century Fox’s international 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.

Fox’s proposed takeover of Sky is still being held up by its recent referral to UK regulator the Competition and Markets Authority, which could mean Fox will want to cut its losses and sell its 39% stake to Disney.

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.

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.

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