Media firms Disney and 21st Century Fox are signaling more progress in a hotly anticipated announcement of an asset sale that would see Fox completely transformed from a wide-ranging, global conglomerate to a tightly focused media firm centered on just sports and news.
Both Disney and Fox have hired legal teams to scrutinize the details of the potential deal that could see Disney acquiring Fox’s entertainment properties. According to a report in Variety, Fox has brought in representatives from Goldman Sachs and Centerview Partners to assess the financials of the possible deal, while Disney has hired a team of bankers from JP Morgan Chase and Guggenheim Partners.
Reports of the deal and its negotiations indicate Fox is considering selling off its entertainment divisions, including its film and television studios, cable TV networks, and international assets to a third party, and Disney will be the likely recipient. Fox plans to retain its sports, news and broadcast properties.
Top executives at Fox and Disney have been mum on the topic, though Fox CEO James Murdoch, along with executive co-chairs Rupert Murdoch and Lachlan Murdoch, sent a note to employees last week in hopes of easing concerns about “a potential transaction.”
“While we can’t comment on market speculation, we do want to address the impact we know this is having on all of you,” the note read.
An official announcement is expected as early as sometime this week. In the meantime, the industry has seen widespread speculation on what the deal may look like, and what it could mean for the future of both companies. Analysts speculate Fox’s film studio assets could give Disney more ammunition for its upcoming streaming movie service, which will compete with the likes of Netflix and Amazon. A potential Fox deal could also give Disney a 30% stake in Hulu. And Fox may include its slate of regional sports networks (RSNs) in the asset deal, which could give Disney’s ESPN network a boost.
But Disney isn’t the only party interested in Fox’s assets. Comcast is also said to be considering a bid on the assets, and is particularly interested in Fox’s 39% stake in Sky, the UK’s top pay TV operator. Sky has 21 million pay TV subscribers.