Fox executives have signaled many times that “scale for scale’s sake,” as CEO James Murdoch put it last year, isn’t something they’re interested in.
That Rupert Murdoch and sons would consider selling off many of the assets of 21st Century Fox to the Walt Disney Co. — news that emerged on Monday — might have seemed bizarre just a few years ago, but in an era where AT&T may be merging with Time Warner, it could make sense, many observers say.
Disney has been considering a purchase of the Fox film and TV studios and other 21st Century Fox assets, which would leave the Murdoch-controlled conglomerate focused on its news and sports TV operations, including the Fox News, Fox Business Network and Fox Sports 1 cable channels, as well as the Fox broadcast network and TV stations it owns.
For Disney, the benefits are obvious as it readies its streaming subscription service that is meant to rival Netflix. For now, it will contain Pixar- and Disney-branded TV shows and movies as well as Star Wars and Marvel content. Disney owns Marvel, but Fox has rights to some of the characters, like X-Men, and the Twitterverse is already lighting up at the possibility of reuniting the superheroes.
The benefits are a bit less obvious for 21st Century Fox, as Murdoch isn’t known for scaling back his media ambitions. But sports and news, plus retaining the Fox broadcast network while not having to compete as much with a growing stable of content creators, like Netflix, Amazon.
com, YouTube, Facebook and others, could appeal to him, especially as his empire could still expand overseas. Plus, he also controls News Corp, parent of The Wall Street Journal and other publications, and re-merging a scaled-back 21st Century Fox with News Corp could be an option, as well.Co-executive chairman Lachlan Murdoch even hinted at the notion of focusing more on sports via FS1 and news via Fox News Channel and Fox Business Network, all of which would be retained if a deal with Disney is to happen, insiders say.
“The scale and health of our sports and news broadcasting businesses continue to be a…
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