What's going on?
Media empire 21st Century Fox is reportedly in more talks to sell off parts of its business, potentially signaling that a massive acquisition in the media industry is about to go down…
What does this mean?
It’s been known for a few weeks that 21st Century Fox is open to selling its film studio and large chunks of its television business, including channels like FX and National Geographic (it would likely keep its news company, Fox News). The Wall Street Journal reported late on Thursday that American cable giant Comcast has made some serious overtures for these parts of Fox, and other reports have surfaced that Sony and Verizon (which both have sizable media businesses) are in the mix. That’s not to mention Disney, which is also known to be interested.
Why should I care?
The bigger picture: Cable giants are having to adapt or die.
Fox’s international business (it owns parts of UK TV network Sky and India’s Star India) is especially attractive for a buyer like Comcast, whose customers are predominantly based in the United States. Comcast may want to expand into new markets as American cable struggles with more and more viewers “cutting the cord”: the rise of Netflix and other streaming services means that there’s just less money in cable these days. In fact, Fox’s stake in video-on-demand site Hulu may also be of interest to Comcast.
For markets: Shares in Fox jumped by about 7% on Friday.
Shareholders are likely expecting to be paid a nice premium for their stakes if parts of Fox are indeed sold in the near future. Of course, it’s hardly a done deal: there will very likely be a lot of legal hoops to jump through first, especially as scrutiny from US competition regulators has been quite high of late.