The flag of the Twenty-First Century Fox Inc at the company headquarters in Manhattan. REUTERS/Eduardo Munoz
November 6, 2017
(Reuters) – Rupert Murdoch’s Twenty-First Century Fox film and television conglomerate has held talks to sell most of the company to media giant Walt Disney Co, CNBC reported on Monday, citing unidentified people familiar with the matter.
Fox’s shares jumped 7.1 percent to $26.76 in afternoon trading in response. Disney shares climbed 1.7 pct to $100.33.
The two sides are not currently talking, CNBC said, but had held talks in the last few weeks, reflecting a view among Fox executives that the media company could not reach the size needed to compete with Amazon.com Inc, Netflix Inc and other major media players. http://cnb.cx/2hgHcPA
A Disney spokesman did not immediately respond to a request for comment. A Fox spokesman had no comment.
For Disney, a deal could bring additional programming it could use to lure audiences as the company tries to navigate consumers’ rapid migration to digital viewing and spending by technology companies pushing further into Hollywood.
Disney, which under U.S. rules could not own two broadcast networks, would not purchase all of Fox, CNBC reported. It 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 broadcast network or local broadcasting affiliates, the report said.
It did discuss buying Fox’s movie and TV production studios, cable networks FX and National Geographic and international assets such as Star and B Sky B, CNBC said.
Fox has bid $14.5 billion to acquire the remaining 61 percent it does not own of Sky Plc, but the acquisition has been delayed by British regulators.
Disney has been struggling with subscriber declines at ESPN, its biggest network, and is planning to launch direct-to-consumer video streaming services to reach younger audiences that have shunned traditional cable and satellite offerings.
Much of Fox’s revenue has come from its cable division, which houses Fox News, FX and other channels. Fox said in August that it expects to see high single-digit domestic affiliate fee growth every quarter in fiscal 2018.
Fox and Disney are co-owners of Hulu, a streaming service that offers on-demand and live TV packages. Hulu also is partially owned by Comcast Corp and Time Warner Inc.
(Reporting by Lisa Richwine; additional reporting by Arjun Panchadar and Laharee Chatterjee in Bengaluru; Editing by Sriraj Kalluvila and Dan Grebler)
