The Walt Disney Company has reached a deal to buy most of Rupert Murdoch’s 21st Century Fox for a whopping $52.4 billion, NPR reports.
“The sale represents a stunning turn of events for Murdoch, a reversal of decades of alternately calculated and impulsive expansion of a sprawling media empire that started with a single afternoon paper in a forgotten city on the southern coast of his native Australia,” NPR reported.
While the deal will see most of the company’s Hollywood holdings sold to Disney, Fox News will not be included in the deal. The Murdochs are selling their 20th Century Fox Hollywood lot and the rights to their films, as well as other holdings.
But the sale is not a done deal yet, as it may cause Disney to run afoul of anti-monopoly laws. Regulators are likely to scrutinize certain parts of the deal because it would give the company a large concentration of similar holdings.
According to NPR, Disney is looking to consolidate their television and movie studios and use Fox Sports to obtain a large network of local cable channels to fold into their ESPN programming.
The deal also allows Disney to use Fox’s overseas properties to increase their international distribution.
Disney would also get a controlling stake in streaming service Hulu as they seek to compete with Amazon and Netflix. Disney has already announced it is pulling its content from Netflix.
The deal also gives Disney ownership of such high profile brands like The Simpsons and X-Men.
Why did Fox sell off their massive empire? NPR reports their decision-making was driven by fear and pragmatism.
On Fox’s part, the Disney deal appears driven by fear, opportunity and pragmatism: fear of the seemingly bottomless wallets of Netflix, Amazon and possibly Apple to spend on new shows; opportunity to cash out assets at a possible peak; and pragmatism in finally resolving the professional fates of Murdoch’s sons, Lachlan and James, as well the fortunes of four other Murdoch children who do not play a role in the company.
Lachlan Murdoch is 21st Century Fox’s co-chairman, and his younger brother, James Murdoch, is its CEO. Both have spoken over the course of this past year of the need for what they call “scale” in the entertainment industry: the size needed to keep flourishing. Both asserted that Fox had it.
But, much like Jeff Bewkes at Time Warner, who is seeking regulatory approval to sell off his entire company to AT&T, the Murdochs reached the remarkable conclusion that a publicly traded company with a market capitalization of roughly $60 billion just wasn’t big enough.
The move comes after the company struggled to acquire British broadcasting giant Sky after regulators blocked the move.
A number of controversies including “Murdoch’s sympathy for the Brexit movement and open support for the Trump presidency; the ongoing sexual harassment and governance scandals at Fox News; and public outrage over that network’s coverage of the death of Seth Rich that gave broader circulation to conspiracy theories,” stalled the deal, according to NPR.
Fox will hold on to Fox News, which Rupert Murdoch has led personally after longtime CEO Roger Ailes was fired after a slew of sexual harassment allegations.
“The perch has given Murdoch constant access to President Trump, an Oval Office rapport that the media magnate has long sought,” NPR notes, adding that even if Murdoch wanted to sell it, “its brand would be too toxic for many other major American corporations that could afford to buy it.”