Business News Deals Media

Disney agrees to buy much of 21st Century Fox in $52.4 billion deal

By | Published on Friday 15 December 2017

21st Century Fox

The Walt Disney Company yesterday announced that it had agreed to buy the bulk of the assets of the Rupert Murdoch-controlled 21st Century Fox in a deal worth $52.4 billion. The transaction will further boost Disney’s dominance in the media and entertainment sectors, bringing much of Fox’s US-based movie and television assets into its fold, plus its stake in the Sky TV business in Europe.

Fox’s shareholders will get 25% of the combined Disney/Fox business as part of the deal, which is still subject to regulator approval. That means the Murdoch family itself will control just under 5% of the combined company.

This in turn means that – while Murdoch Senior called the deal a “merger” and insisted he wasn’t “retreating” – the media mogul and his family will no longer have much control over the movie and television side of their global empire. And it’s not clear what role Murdoch’s son James, most recently Fox’s CEO, will have once much of that business has become a Disney subsidiary.

None of this affects Murdoch’s publishing empire News Corp, which was spun off as a separate business from Fox back in 2013. A handful of Fox’s current affairs channels – including the infamous Fox News – are not being sold to Disney either, and will remain a standalone company currently called New Fox.

Murdoch says that he hasn’t any short-term plans to merge those channels into News Corp, though doing so would make sense. First because News Corp has news provision at its core. And secondly because News Corp does actually have some broadcasting assets already alongside its newspapers and book publishing division, including the Fox-branded sports channels in Australia and the Wireless Group radio network in the UK.

The Disney deal comes as Fox is in the midst of trying to take complete ownership of the Sky TV network, for the second time. The Sky acquisition is being investigating by competition regulators in the UK, with critics saying that the Murdoch family shouldn’t get greater control of Sky News while they also own British newspapers The Sun and The Times through their News Corp business.

The phone hacking scandal that erupted around The Sun’s former sister title the News Of The World, and other accusations of poor ethics at the News UK newspaper group, have also been used by critics as arguments as to why a Murdoch-controlled business shouldn’t get complete control of the Sky network.

The fact that it could ultimately be Disney, rather than the Murdoch-controlled Fox, that would end up owning Sky outright would counter a bunch of those arguments. Though the UK Competition And Markets Authority is expected to carry on with its investigation into the Sky bid regardless, for the time being at least.

Meanwhile, here are some quotes from Murdoch himself and Disney big cheese Bob Iger.

Murdoch: “We are extremely proud of all that we have built at 21st Century Fox, and I firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace in what is an exciting and dynamic industry. Furthermore, I’m convinced that this combination, under Bob Iger’s leadership, will be one of the greatest companies in the world”.

Iger: “The acquisition of this stellar collection of businesses from 21st Century Fox reflects the increasing consumer demand for a rich diversity of entertainment experiences that are more compelling, accessible and convenient than ever before. We’re honoured and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building, and we’re excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings”.