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Fox sale: Can Comcast's Roberts and Murdoch make a deal? Disney could have inside track

Bob Fernandez, Philadelphia Daily News on

Published in Business News

PHILADELPHIA -- Comcast Corp. CEO Brian Roberts met with Rupert Murdoch at the New York Athletic Club on Monday and remains in the hunt for 21st Century Fox Inc.'s movie and television studios, non-news cable channels, and global assets, according to people familiar with talks between the two companies.

Fox and the Walt Disney Co. are reportedly close to a deal that would enable Murdoch to shed entertainment assets while retaining ownership of Fox News and the Fox broadcast-TV network.

But Roberts and Comcast have not given up on an acquisition that would be larger than Comcast's takeover of NBCUniversal in 2011 and combine the two family-controlled media empires, marrying the home of "The Simpsons," "Empire" and "Family Guy" with the nation's largest cable-TV operator and U.S. television-rights holder to the Olympics. Roberts has a keen interest in Fox's global assets in Europe, India, and South America as Comcast has faced antitrust backlash, people familiar with the talks say.

The Murdoch Family Trust controls 38 percent of 21st Century Fox. Roberts controls 33 percent of Comcast through his super-voting Class B shares.

A Disney-Fox deal would combine two of the biggest U.S. producers of entertainment. Disney has said it will have to broaden its library of content as it launches a streaming service to compete with Netflix.

The Fox assets for sale include the British satellite-TV operator Sky, the Indian streaming and satellite-TV Star Networks, Fox International in South America, 22 Fox-branded regional cable sport networks, a second major Hollywood studio, the FX and Nat Geo cable networks, and 30 percent of the online streamer Hulu.

Comcast also owns 30 percent of Hulu. Expiring in September 2018 are Justice Department restrictions relating to managerial control of Hulu that were placed on Comcast as part of its acquisition of NBCUniversal.

In addition to Comcast and Disney, Verizon and Sony have expressed some interest in the Fox assets, according to published reports.

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About 70 percent of the revenues associated with the Fox assets that could be sold are related to international operations, sources say. Murdoch, 86, spent about four decades building 21st Century Fox into a global entertainment and news giant. His family trusts control about 40 percent of the company. His sons, Lachlan, 46, and James, 44, work at Fox in leadership positions. Murdoch is said to be looking for a stock transaction for its tax benefits.

He seems intent on shedding entertainment assets. Murdoch is not expected to sell the conservative Fox News Network, the Fox Business Channel, the Fox broadcast-television network, or the national sports network FS1.

"News and sports will survive, and it will be the least-disrupted content on television," Philip Salas, an assistant teaching professor at the Drexel University graduate program in television management, said recently.

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