Sep 26, 2018

Fox to sell minority stake in Sky to Comcast

Photo by Daniel Leal-Olivas/AFP/Getty Images

21st Century Fox says will sell its minority stake in Sky Broadcasting to Comcast.

The details: Disney, which struck a deal to buy the majority of Fox's entertainment assets this year, including its 39% stake in Sky, said in a statement Wednesday that it agreed to the transaction because it will help offload debt.

Why it matters: Comcast just won a dramatic settlement auction over the weekend to buy a minority stake in Sky for roughly $40 billion dollars. Now, they'll own a majority stake in the European Pay-TV and streaming company, which will dramatically increase their international footprint.

Between the lines: Negotiations between Fox, Disney and Comcast have been bitter and complicated over the past few months, but this pretty much puts an end to a months-long battle for assets.

  • Disney aggressively battled Comcast and eventually out-bid the U.S. telecom giant for 21st Century Fox's entertainment assets (most of which are driven by international revenues).
  • As a result, Comcast bid aggressively in this past weekend's auction to beat Fox to a minority stake in Sky.
  • The current value of Fox’s Sky stake is more than $15 billion, per Fox.

Our thought bubble: One can assume that conversations about Fox eventually selling the stake over to Comcast have been happening for a while, in anticipation for this series of events. (Most expected Comcast to out-bid Fox for Sky.)

What's in it for everyone?

  • For Disney, letting go of Sky as a part of their acquisition package of Fox's entertainment assets will significantly reduce their debt to be able to invest in their streaming efforts.
  • For Fox, it still gets to sell minority stake, and will focus those revenues on building its new post-merger broadcast network, dubbed at this point "New Fox."
  • For Comcast, a majority ownership in Sky gives them access to 23 million European pay-TV households to expand their customer set dramatically and overseas.

What's next? Fox, Disney and Comcast all own a 30% stake in Hulu. It's unclear whether there will be any further negotiations for one party to sell those assets. In its statement, Disney says it plans to increase its investment in Hulu’s content offerings and international distribution.

Go deeper

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 11 a.m. ET: 618,043 — Total deaths: 28,823 — Total recoveries: 135,736.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 11 a.m. ET: 104,865 — Total deaths: 1,709 — Total recoveries: 894.
  3. Federal government latest: President Trump signed the $2 trillion coronavirus stimulus bill to provide businesses and U.S. workers economic relief.
  4. State updates: A group of Midwestern swing voters that supported President Trump's handling of the coronavirus less than two weeks ago is balking at his call for the U.S. to be "opened up" by Easter. Alaska is latest state to issue stay-at-home order — New York is trying to nearly triple its hospital capacity in less than a month.
  5. World updates: Italy reported 969 coronavirus deaths on Friday, the country's deadliest day. In Spain, over 1,300 people were confirmed dead between Thursday to Saturday.
  6. Business latest: President Trump authorized the use of the Defense Production Act to direct General Motors to build ventilators for those affected by COVID-19. White House trade adviser Peter Navarro has been appointed to enforce the act.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancing.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

Coronavirus updates: World case count tops 600,000

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

Japanese Prime Minister Shinzo Abe warned that the novel coronavirus pandemic could worsen if people fail to take the appropriate containment measures, at a news conference in Tokyo.

The big picture: The U.S. leads the world in confirmed coronavirus cases, as the number of global cases nears 615,519. Governments around the world are trying to curb the medical and financial fallout of COVID-19, as infections surge across Europe and the U.S.

Go deeperArrowUpdated 2 hours ago - Health

The one-minute coronavirus story

Illustration: Sarah Grillo/Axios

News about the coronavirus is so big and coming so fast that it's hard to remember what happened just last week, let alone last month.

Here's the quickest possible review of the story so far — how it happened and how the U.S. lost control.

Go deeperArrow2 hours ago - Health