According to CNBC, 21st Century Fox has been involved in discussions to sell part of the company to the Walt Disney Company. If a deal is reached, Fox is expected to maintain a news and sports focused media company.
21st Century Fox, owned by Rupert Murdoch, has surprised many by speaking to Disney about selling the Fox Studio and Sky. Gabrielle Brown, executive director of global internet and media at the big global bank UBS, told investors, “Many asking why Fox would do this… again, it’s unclear, especially given how tied to these assets the family has been. But James Murdoch has been realistic about industry trends, so maybe this is his way of changing the landscape.”
With Netflix, Amazon, Google, and Facebook changing the way television is consumed, Fox might consider it difficult to compete with new platforms in terms of entertainment programming. Netflix recently said they would spend $8 billion on content this year, with Amazon, Google, and Facebook also promising investors they’ll allocate large sums of money toward digital entertainment.
Disney would not be able to purchase the Fox broadcast network, or Fox Sports because they already own ABC and ESPN. A sale would exemplify two very different strategies for Disney and 21st Century Fox. Disney is looking to add a large amount of entertainment programming whereas Fox may view news and sports as a better long-term investment.
In the last two weeks it was reported ESPN could be facing more layoffs and possibly decide to cut NFL coverage in future years. For Fox, selling part of their company to Disney would allow them to spend more money and increase their sports content distribution. While the traditional television audience as a whole is on the decline, sports programming has actually been impacted the least.