Fox Studios” by Tony Hisgett is licensed under CC BY 2.0

As first reported by CNBC on November 6, the Walt Disney Company recently held preliminary talks with 21st Century Fox about buying its entertainment business, including the Fox movie studio, the FX cable network and the UK – based television service Sky. The potential asset acquisition may allow Fox to focus on its news and sport services, primarily run by Fox’s broadcasting network, Fox News or Fox’s sports holdings. The two companies have been talking over the last few weeks but are no longer negotiating. It’s uncertain whether these talks will lead to a deal, although the two sides may come back for further discussions, CNBC reported on Monday. Both companies declined to respond or comment.

Commentators maintain that the talks underline the considerably changing media industry as tech giants such as Netflix, Amazon and Facebook have shaped the way people consume media. To compete with these rich-funded rivals, many people believe, requires the massive scale of a big player like Disney. Companies like Fox who lack that power may do better by just exiting the race and focusing on the news and sport business.

For Fox, which is controlled by Rupert Murdoch, the sale suggests that the media mogul has lost his morale to fight. Some even say it signals the collapse of his media empire and end of an era. However, for Disney, such asset acquisitions seem to make a lot of sense. First, Fox’s strong television production business would help Disney shore up its own struggling ABC Studios and offer exclusive content on its planned streaming platform. Furthermore, this deal could mean a valuable expansion for Disney-owned Marvel Studios. Fox owns the live-action movie rights to Marvel properties X-Men, Fantastic Four, and Deadpool. By acquiring these rights from Fox, Marvel can integrate the characters into the rapidly growing Marvel Cinematic Universe.

Amid Fox’s entertainment assets, Disney was interested in buying Fox’s current 39% stake in Sky, the Britain-based pay-television service, of which the remaining 61% stake was bid by Fox. Such takeover hit the bump earlier this year since UK regulators have been scrutinizing its negative impact on broadcasting standards and media plurality. Analysts say Fox discussing asset sales suggests Mr. Murdoch is walking away from Sky by choice.

Ying Li is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current L.L.M. student at Harvard Law School (Class of 2018).

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