Twenty-First Century Fox is said to have opened discussions with Disney as to the possibility of selling off most of its film and television production as the latter looks to broaden its content pool and secure more international viewers.
The dramatic news translated into an immediate bounce in Fox’s share price which climbed close to 10% as markets digested the news, although the impact on Disney was somewhat more subdued with its own shares increasing by just 2%.
According to CNBC the potential suitors sounded each other out in talks last week but are not currently negotiating but a sell-off could fit Fox’s rationale that it lacks the necessary scale with which to compete with the likes of Amazon and Netflix.
While neither party has commented publicly on the speculation it is thought that Disney could be poised to make a move for Fox’s movie and TV production studios, Cable Networks, National Geographic, Sky and India’s Star Network.
Any takeover will bring unquantifiable ramifications for Rupert Murdoch’s long-held dream to acquire a full stake in Sky, with a $14.5bn bid by Fox to wrest control of the remaining 61% of the business currently hanging in the balance as UK regulators deliberate on whether to approve the deal.
From Disney’s perspective this additional firepower could provide it with a springboard to drive its own digital viewing strategy but the media and entertainment giant would refrain from purchasing Fox’s sports channels, Fox News or the Fox Broadcast Network for fear of falling foul of US competition laws.