In short, Murdoch is getting out of the recorded content business and focusing on the live events streaming business.
Murdoch and his team have divested themselves from recorded content production for over-the-air TV, cable TV, movie theaters and home recorded media as well as direct broadcast satellite TV.
In an interview with Maria Bartiromo on Fox's own Fox Business, Rupurt Murdoch (see video here), the founder of 21st Century Fox believes (rightly) that cord-cutting has so innovated how (North American) consumers pay for televised entertainment, that higher-return future profits exist in live events that are distributed over-the-top (OTT) of the Internet.
From the deal, combined, Fox shareholders will become 25% owners in Disney.
Why is This Deal Happening?
Murdoch gains control of $2 billion in yearly cash flow unburdened by legacy assets, which will be spun to Disney.
Disney, primarily a content producer, gets a huge footprint in India and Europe to peddle Disney products.
Disney Buys
Disney execs increase their footprint in movie production, TV production, recorded content distribution, and international TV distribution (India and Europe). As well, Disney execs acquire a catalog of already produced TV shows and movies to distribute.
In this deal, likely, Disney execs are after 1.3 billion Hindians of India who, in many ways, still live in the early days of the 20th century. Disney seeks to monetize those eyeballs with its legacy content and newly acquired legacy content from Fox.
Even one dollar a year from 1.3 billion Hindians is quite a bit of cash. If Disney can squeeze US$20 from everyone in India, the deal will pay for itself soon enough. At four dollars a year, per capita, in five years the deal will pay itself.
The deal to acquire Star India is not much different than Disney exec's acquisition of Star Wars / Lucus Films a few years back. Disney execs did that deal knowing they would pay off the buy in as little as five years.
In this deal, likely, Disney execs are after 1.3 billion Hindians of India who, in many ways, still live in the early days of the 20th century. Disney seeks to monetize those eyeballs with its legacy content and newly acquired legacy content from Fox.
Even one dollar a year from 1.3 billion Hindians is quite a bit of cash. If Disney can squeeze US$20 from everyone in India, the deal will pay for itself soon enough. At four dollars a year, per capita, in five years the deal will pay itself.
The deal to acquire Star India is not much different than Disney exec's acquisition of Star Wars / Lucus Films a few years back. Disney execs did that deal knowing they would pay off the buy in as little as five years.
The New Fox
The New FOX will consist of these:
- Fox Sports (FS1, FS2, FOX Sports Regional Networks, Yes Network, Big Ten Network, FOX Deportes)
- Fox News Channel
- Fox Business Network
- FOX Television Stations (owned-and-operated TV stations)
Murdoch / Fox once owned DIRECTV, a solid business with a good cash flow. Murdoch spun off the satellite TV distributor now owned by AT&T well in advance of cord-cutter appealing OTT distribution. With the Disney deal, Murdoch divests Fox of Star India and Sky plc. That says Murdoch believes satellite TV is dead.
Likely because Disney execs did not desire to acquire, by keeping FOX Television Stations (28 stations in 17 markets and covering over 37% of U.S. television homes) Murdoch might see a future in over-the-air TV owing to cord-cutters and HDTV antennas.
Part of what has driven this deal is changing demographics of the USA. For more on that see:
Part of what has driven this deal is changing demographics of the USA. For more on that see:
And for more on how cable TV and satellite is dying, see:
Soon, someone smart is going to revolutionize sports TV by doing this:
Gab It
