DealBook Briefing: What Is Disney Paying For in Its Deal With Fox?
Good Thursday morning. We break down Disney’s deal to buy a huge part of 21st Century Fox. The Republican tax overhaul is near the finish line. And the F.C.C. will vote to repeal net neutrality rules today.
The latest deal to reshape the media landscape is here.
Let’s break down the Disney deal with Fox that was just announced:
• Disney will pay about $29.45 a share in an all-stock transaction, buying a big chunk of Fox businesses valued at about $66 billion, including debt.
• Fox shareholders as a whole will own about 25 percent of The Walt Disney Company.
• As expected, today’s announcement has no mention of a role for James Murdoch at Disney. That may come down the line as he negotiates with Disney.
• The Murdochs, who own about 17 percent of existing shares in Fox, will own less than 5 percent of Disney and won’t have any board seats there.
What Robert Iger of Disney has to say
We’re honored and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building, and we’re excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings.
What’s at stake: Disney wants to bolster its defenses against Netflix and Amazon. The deal will give the media giant another production studio to pump out content for its forthcoming video streaming service. And Fox’s international broadcasting operations will extend its reach abroad.
A deeper dive: Ben Thompson of Stratechery takes a look at how effective a response this is to Netflix. He writes, “What has been so impressive over the last few months is the extent and speed with which Disney has seemingly figured it out — and acted accordingly.”