21st Century Fox reported their 3rd Quarter earnings today. Fox saw adjusted earning of $.47 a share, up 8% from the prior year quarter. In the press release and earnings call, Fox leadership made several comments that are of interest to those following the Fox-Disney transaction that is expected later this year.

Executive Chairmen Rupert and Lachlan Murdoch on the Earnings Release:

“We continue to make operational and financial progress against near-term objectives as we also work to close our strategic transactions. Our cable segment delivered its highest earnings ever in our fiscal third quarter, propelled by sustained double-digit gains in domestic affiliate revenues. Creatively, we are firing on all cylinders. Our stand-out programming continues to drive up the value of our video brands to distributors, as well as build our direct relationship with consumers, as we’re demonstrating with the successful inaugural season of Indian Premiere League on STAR Sports and Hotstar platforms. Our film studio delivered box office and awards momentum that we expect to continue with the upcoming release of Deadpool 2.”

Purchase of TV Stations:

  • 21 Century Fox that it had entered into an agreement with Sinclair Broadcast Group, Inc. and Tribune Media Company to acquire seven television stations from Tribune for approximately $910 million to satisfy regulatory condition of Sinclair’s purchase of Tribune.
  • The transaction will grow Fox Television Stations’ coverage to nearly half of all U.S. households, and its market presence to 19 of the top 20 television markets.
  • As part of the transaction, the Fox entered into new network affiliation agreements with Sinclair and will grant to Sinclair options to acquire two of the Fox’s stations.
  • These stations will remain part of New Fox and will not be part of The Walt Disney Company.

Status of the Fox-Disney Deal:

  • 21st Century Fox and The Walt Disney Company continue to go through the regulatory process on the merger.
  • On April 18, 2018 the preliminary joint proxy statement/prospectus was filed with the Securities and Exchange Commission in connection with the transaction.
  • The transaction is still expected to be completed approximately 12 to 18 months from December 13, 2017.
  • Both companies expect to seek shareholder approval during the summer.

Fox’s Purchase of Sky:

  • 21st Century Fox anticipates regulatory approval of their purchase of the part of Sky that they do not already own by early summer 2018.
  • On April 25, 2018, Comcast announced a pre-conditional cash offer for the fully diluted share capital of Sky, which is subject to regulatory pre-conditions as well as additional closing conditions.
  • Fox remains committed to its pre-conditional cash offer.
  • Fox believes that Comcast’s offer should be subjected to a robust regulatory review, as Fox’s deal has faced.
  • They are considering all-options and will announce their decision “in due course.”

Comcast’s Reported Bid for Sky:

  • Fox is aware of the reports that Comcast will be making a bid for the same assets that Disney intends to buy.
  • Fox repeatedly stated that they will not comment on market speculation.
  • They remain committed to the Disney deal.
  • The Board is also aware of their fiduciary responsibility to all shareholders, regarding considering other options.


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