Sources: 21st Century Fox may sell majority of company to Disney

21^st Century Fox has recently had talks about selling a majority of the company to Walt Disney Co. according to people familiar to the situation, CNBC reports.

The potential of a deal has not moved past the talks stage. Conversations have occurred during the last few weeks, but the sides are not talking at the moment. Since the talks have been on again and off again, there’s a chance the subject could be brought up again.
Fox’ interest in selling the company to Disney comes from a belief among senior management that scale in media is crucial, but there is no path to gain that type of scale in the entertainment industry through acquisition. Instead, the company is said to believe focusing on news and sports properties could be more competitive in today’s marketplace.
Part of Fox’ thoughts of selling could be because of the changing media landscape. Recently, Google, Amazon, Facebook and Netflix have all changed the way people consume media and these tech giants dominate the distribution of digital video content. Many people believe Disney has the scale to compete in that evolving landscape, but 21^st Century Fox does not.
From Disney’s perspective, a potential purchase presents an opportunity to take control of another movie studio and significant television production properties. The timing could be perfect as Disney is preparing a direct-to-consumer entertainment streaming service. Disney also finds Fox’s presence in international markets like Germany, the United Kingdom and Italy appealing.
Disney would not purchase Fox in its entirety, according to sources. Since it could not own two broadcast networks, it would not buy the Fox broadcast network. It also would not buy the Fox’ sports programming since Disney already owns ESPN and combining the two would be viewed as anti-competitive from an antitrust standpoint. Disney also would not purchase Fox News, Fox Business Channel or any of its local broadcasting affiliates. It would add entertainment networks like FX, National Geographic, the movie studio along with TV production and international assets.
Officials at Disney and Fox both declined to comment.