Disney, Fox asset talks restarted

21st Century Fox has restarted talks about selling a range of its assets to Disney, a month after reports of a possible deal first emerged.

James Murdoch

Discussions have revolved around the future of Fox’s cablenets, including FX, its international operations, such as European pay operator Sky and Star in India, and film studio operations.

Shares in Fox soared last month after it emerged US media giants Comcast and Verizon had joined Disney in the race to acquire the company’s assets.

NBCUniversal owner Comcast and telecoms giant Verizon entered the fray after the interest from Disney reportedly cooled.

However, that interest has now been reignited, according to the Financial Times in the UK, with a deal that could leave Fox, run by James Murdoch, with a highly focused news and sports media company.

The addition of Fox’s TV assets and international exposure would be attractive to Disney as it gears itself up to take on 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. This has previously been dismissed, however, by the company’s executive chairman, Lachlan Murdoch.

Disney announced earlier this year it will pull its film content from Netflix in 2019 and launch a rival Disney-branded international streaming service.

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

Fox’s assets range from a 50% stake in production giant Endemol Shine Group, a sprawling cable business that includes National Geographic and FX and a 30% interest in US-based streamer Hulu.

The entry of Comcast and Verizon has prompted further speculation over just how much of the company Murdoch would be willing to sell, although any deal would be subject to significant regulatory hurdles.

Interest in Fox comes as Verizon rival AT&T’s deal to buy HBO-owner Time Warner remains mired in red tape as the telco attempts to settle concerns over competition. Fox, meanwhile, is struggling to overcome regulatory hurdles to complete its acquisition of Sky in Europe.