Fox and Disney discuss possible media merger

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They "are not now talking at this very moment" but negotiations "could be revisited" according to Variety.

Twenty-First Century Fox declined to comment to Breakingviews.

Cable subscriptions, an area where both Fox and Disney have made fortunes, are slipping as more people "cut the cord" and rely on the internet to deliver their entertainment.

In addition to the movie studio, TV production and global assets such as Star and Sky, Disney would also add entertainment networks such as FX and National Geographic. While Fox would end up with a more tightly focused news and sports business, Walt Disney would gain an additional movie studio and some massive TV production assets.

The deal would not have included the Fox broadcast network, as a company can not legally own two broadcast networks, and Disney already owns ABC.

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By selling its entertainment assets to Disney, Fox would free itself from having to compete with larger-scale media conglomerates like Disney and Comcast. That £11.7bn ($15.41bn) deal has run afoul of regulators' concerns about media plurality in the United Kingdom and the Murdochs' commitment to broadcasting standards.

Under his resign Disney acquired Pixar for $7.4 billion in 2006; Marvel for $4 billion in 2009, Lucasfilm Ltd for $4 million in 2013 and even managed to regain the rights to the very first character ever illustrated by the company's namesake founder. And more resources could perhaps be diverted to sports in a leaner company, allowing Fox to possibly pick up bigger rights packages.

Fox has had tremendous success in recent years with its X-Men films franchise based on Marvel Comics characters such as Wolverine and Deadpool (less so with the Fantastic Four superhero team), and with Marvel Studios already under the Disney banner, a deal could bring audiences one step closer to a fully unified Marvel Cinematic Universe.

Sheikh said he is surprised that the Murdoch family, which controls 21 Century Fox, would consider giving up control of the company.

Fox's shares rose 5.8 per cent to $26.40 U.S. in afternoon trading, after being halted in the morning when the report came out. The Murdochs would retain its sports and news properties, as well as its more than 100 local broadcasting affiliates.

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