21st Century Fox and Walt Disney shareholders approved the sale of Foxâ€™s entertainment assets Friday, moving one of the biggest media mergers in history nearer to completion.
Disney is the parent company of Bristol-based ESPN, the biggest sports network. To win regulatory approval in the U.S., Disney has agreed to divest Foxâ€™s 22 regional sports channels. Bidders for the properties, which could fetch as much as $20 billion, may include companies backed by cable billionaire John Malone, private equity and regional broadcasters.
The companiesâ€™ investors gave their blessings to the $71.3 billion transaction in separate votes at the New York Hilton Midtown in Manhattan. When the deal was announced in December, Disney said it would take 12 to 18 months to close - a timetable the company is sticking with. Upon completion, a new Fox will emerge focused on broadcast TV, sports and the Fox News Channel.
Disney Chief Executive Officer Robert Iger now must turn his attention to the dealâ€™s many loose ends - to consummate the merger and prepare his company for life afterward. Below is a look at some of his remaining challenges:
Some analysts also see the possibility that Iger will look to cut a deal with Comcast Corp. over that companyâ€™s 30 percent interest in Hulu. When the Fox deal closes, Disney will become the majority owner of the video-streaming service.
Although Comcast said last week it wonâ€™t continue bidding for Foxâ€™s assets, the Philadelphia-based cable TV giant has the highest offer on the table for British satellite-TV provider Sky at $34 billion. Disney is acquiring 39 percent of Sky through the deal with Fox and still technically has a bid on the table for the broadcaster.
Some analysts have suggested Iger may cede Sky to Comcast, freeing Disney from the $19 billion or so it would take to purchase the rest of the business.
Disney has pledged to generate $2 billion in cost savings as a result of the merger, which will unite two of the six largest Hollywood studios.
Thatâ€™s created a lot of angst at Fox and Disney, where overlapping marketing, ad sales and distribution departments at their respective film and TV units could lead to hundreds if not thousands of job cuts. Fox had 21,700 employees at year-end, according to data compiled by Bloomberg, while Disney has 199,000.
Some executives are already negotiating their future, with Fox Networks Chairman Peter Rice expected to take a similar role overseeing the combined companiesâ€™ TV business, with the exception of ESPN. Fox TV studio co-CEO Dana Walden is expected to lead their TV production business.