Author Mark Fairlie
Earlier this month, Walt Disney announced that they would buy 21st Century Fox in a $66billion landmark deal. Valuing Fox at $52.4billion, Disney will also assume $13.7billion of the company’s debt.
Whilst the sale will secure Disney’s status as the world’s largest media company, the question of what will happen to Fox’s entertainment businesses remains unanswered.
Having acquired Lucasfilm in 2012, Disney has emerged as a global leader in entertainment. Because of their power in the industry, many are strongly opposed to the Fox deal.
U.S. Representative David Cicilline has said that “Disney’s proposed purchase of 21st Century Fox threatens to put control of TV, movie, and news content into the hands of a single media giant.”
“If it’s approved,” he warned, it “could allow Disney to limit what consumers can watch and increase their cable bills”. In the Fox deal, Disney will gain over 300 channels and 22 regional sports networks, as well as several streaming services.
However, many are now concerned over what will happen to Sky News once it is taken over by Disney.
Rupert Murdoch’s 21st Century Fox currently owns just 39% of the satellite broadcaster Sky and was attempting to buy out the remaining shares before the Disney deal was agreed.
Murdoch’s youngest son, James Murdoch, currently sits as both chairman of Sky and chief executive of Fox.
Bob Iger, Disney’s chairman and chief executive, has said that James Murdoch will be
“integral to us integrating these two companies over the next few months. During that time he and I will talk about whether there is a role for him here or not.”
According to the Financial Times, he is expected to end his professional relationship with his father and brother, who are both chairmen of 21st Century Fox, following the sale.
As it remains unclear whether or not James Murdoch will remain in control of Sky under Disney, many are sceptical of what will become of Sky News.
Stewart Purvis, ex-chief executive of ITN and former senior executive at Ofcom, believes there may still be hope for the channel. If Disney chooses not to go ahead with acquiring the remaining 61% of Sky as Murdoch had attempted, Sky News may still have a future.
Purvis added that if Disney does buy the entirety of Sky, that he has “never found Disney to be very interested in news. It’s an entertainment company and maybe being in news is more trouble than it’s worth.” Last month, Sky threatened to close the Sky News channel if it created difficulties in Murdoch’s takeover bid.
Founder of research firm Enders Analysis, Claire Enders, also told the BBC that Disney is not by nature
“a company that engages in political investment. It runs businesses that make profits and that’s one of the reasons why it’s thought of as one of the best companies in the world.”
As Sky News loses an average of £40million a year, whilst taking in $1billion of investment, she believes itis unlikely Disney will choose to continue funding the channel. Enders has also said that “it’s very hard to make money out of the news in a small market like the UK.”
Disney currently owns American television network, ABC, which run their own news service. Whilst this may suggest the company is, in fact, open to keeping a news channel running, Purvis stressed that “ABC News is profitable”, which is the reason it is safe.
Others are concerned that if Sky News were to be taken down, BBC News would be left as the only dedicated UK television news service. This could create issues around media plurality, as viewers would only be able to receive one point of view.
Despite people’s uncertainty, Disney appears to be taking a positive outlook towards the channel. When asked whether Sky News would still have a future after the Fox deal is completed, Iger stated “absolutely. All of Sky has a future.”