Disney Held Talks to Acquire Most of 21st Century Fox (Report)
Executives at Disney and Fox spoke for the past few weeks but are no longer negotiating, CNBC reported.
Disney has spoken to 21st Century Fox about acquiring most of its assets in a move that, should it come to fruition, would allow the Rupert Murdoch-controlled company to focus almost exclusively on sports and news, according to CNBC.
The negotiations come at a pivotal time, as Disney is readying a streaming product to rival Netflix and could use movie and TV content from 21st Century Fox to do so. As for 21st Century Fox, it is trying to purchase European satellite TV service Sky, which would help it distribute both news and sports, along with all other content.
A 21st Century Fox spokesperson had no comment and Disney did not immediately respond to a request for comment. The report, though, caused shares of 21st Century Fox to spike 7 percent in midday trading on Monday.
Executives at Disney and Fox spoke for the past few weeks but are no longer negotiating, David Faber of CNBC reported Monday. He added that negotiations could begin again but that there's no guarantee a deal will get done.
For Fox, a deal to unload its TV and movie studio on Disney would mean partially exiting a rapidly changing space where competition suddenly includes richly funded digital companies like Amazon.com, Facebook, Google and Netflix. News and sports, on the other hand, remain slightly more predictable businesses.
Disney's need for content, meanwhile, has never been greater, given the streaming business it is creating with its acquisition of BAMTech in August is meant to go head-to-head with Netflix.
Disney, in fact, is pulling its Pixar and Disney-branded content from Netflix so that consumers desiring those shows and movies will have incentive to subscribe to Disney's upcoming service, which will also include Marvel and Star Wars product and could conceivably add movies and shows from Fox at a later date.
Disney already owns one broadcast TV network in ABC, so it couldn't also purchase Fox's broadcast network without violating current FCC rules. But it would like to get its hands on the rival conglomerate's cable channels, such as National Geographic and FX, although Fox News Channel is presumably off the table.
It's also unclear how any deal would affect 21st Century Fox's agreement to acquire the portion of Sky it doesn't already own. The conglomerate was already having trouble gaining the approval of European regulators, so it could choose instead to simply sell its portion of the satellite service to Disney.