The deal for Disney to take over much of 21st Century Fox’s assets, including regional sports networks, international networks Star and Sky, and the movie and TV studios, appears to be entering its final stages. CNBC’s David Faber reported last week a deal was close despite interest from other suitors like Comcast, and reported Tuesday that the Disney-Fox deal is on the “glide path” with Comcast now out of the running and could be officially announced as soon as Thursday. Here are more details from Faber’s report:
21st Century Fox and Disney are on a “glide path” for a Thursday deal announcement, sources familiar with the deal said.
Disney became the sole suitor after Comcast dropped its bid for the majority of Fox assets on Monday.
…Current Fox shareholders would get one share of the company that remains after the movie and television assets are sold, plus shares of Disney in a fixed exchange ratio.
Sources said this week that the Fox spinoff entity would be worth approximately $10 a share.
Faber’s piece notes that the total value of the assets involved was estimated at $60 billion by his sources last week, but that amount isn’t firm. However, the estimated share price of $10 for the Fox spinoff entity does seem to suggest that the regional sports networks will in fact be included here; Fox stock is currently over $33 (a big jump from the $25 it was at in early November before news of a possible asset sale broke), and $10 a share sounds about right for something that would be just Fox News and Business, FS1 and FS2, and the Fox broadcast channel. The RSNs have been valued at approximately $22 billion, and they could be a huge addition for Disney and ESPN on a number of fronts, from carriage negotiations to utilization of local reporters.
Of course, even if a deal is announced Thursday, that doesn’t mean the actual asset transfer will happen quickly. A deal like this will have to get federal regulatory approval, and that’s far from a sure thing, as we’ve seen with the AT&T-Time Warner deal. There could be some interesting discussions there, especially on the sports side, as the new entity would have a whole lot of influence there between ESPN and the RSNs. (Fox obviously had national cable networks as well while they owned RSNs, as does competitor NBC/Comcast, but neither has as many national networks or as much influence as ESPN does.) And if the merger undergoes heavy scrutiny, there might even be some sort of agreement not to pull stations in carriage disputes (as AT&T has now promised).
Beyond the regulatory hurdles, too, there are lots of questions about what this means for Disney, from integration with their own TV and movie studios to ESPN-RSN integration to senior leadership. Will this lead to Disney CEO Bob Iger staying on longer, as Fox’s Rupert Murdoch reportedly requested as a term of sale here? Will it lead to James Murdoch moving from Fox into a senior executive role at Disney, and potentially even becoming Iger’s eventual successor? There are a whole lot of implications to ponder here, but with this deal getting closer to reality, those are becoming much more tangible.