The Murdochs need to do some explaining.
And by some coincidence, executives at Twenty-First Century Fox Inc. (FOXA) will have their chance to do so when the company reports its fiscal first-quarter earnings after the close of trading in New York on Wednesday, Nov. 8.
A CNBC report this week that Fox executives recently spoke with their counterparts at Walt Disney Co. (DIS - Get Report) about selling their film and TV production studio, among other businesses, has investors squinting at their monitors.
"People are confused," said Huber Research Partners LLC analyst Doug Arthur. "The Murdochs are known for buying things, not selling things. The Disney motivation is easier to understand: Star India, Sky, Fox productions. They get that; they just don't understand why Fox would be willing to sell."
With a long history of acquisitions, it's no surprise that investors were startled to learn that Fox may be considering the sale of large parts of the company: the 20th Century Fox film studio, its very successful TV production unit, the Star India networks and the company's 39% stake in European satellite TV provider Sky plc.
It bears remembering that shortly after Fox announced in late 2016 that it planned to take full control of Sky in a transaction valued at about $14 billion, Bernstein Research's Todd Juenger, who never liked the deal, identified a silver lining.
"One ironic positive, the high initial leverage probably forecloses Fox from using its cash for other acquisitions for the time being," Juenger wrote in Dec. 14 investor note.
In other words, at least after Sky, Rupert Murdoch and company wouldn't try to make more deals. After all, this is the media mogul who started a fourth U.S. broadcast network, acquired DirecTV from Hughes Electronics Corp. and paid up for The Wall Street Journal, which he had coveted for years.
But apparently the changes in the media and entertainment business have accelerated enough to convince the elder Murdoch and sons Lachlan and James that they should at least talk with Disney about a deal. Disney, according to additional reports this week, initiated the talks.
It's quite possible the Murdochs' willingness to meet with Disney executives stemmed in part from signals from U.K. regulators that the Sky deal ultimately may fall flat, a victim in part of a series of high-profile sexual harassment settlements at Fox News Channel.
"If the Murdochs are looking around, it's particularly due to being frustrated by how long the regulatory process is taking for Sky," Arthur added. "That's got to be gnawing at them considering that was a big strategic stroke they tried to effect, and they'll have been waiting a year-and-a-half."
Fox is expecting to get a ruling by mid-2018.
For the moment, investors want to know why Fox would be thinking about selling the farm or at least much of the farm.
Unquestionably, cord-cutting by U.S. pay-TV subscribers is forcing the company to search for new sources of revenue. The Murdochs have been high on Hulu LLC's growth, handing the joint venture some content that historically went to Netflix Inc. (NFLX - Get Report) .
But Arthur points out that Fox is actually gaining subscribers worldwide on the backs of growth in India, Latin America and Sky. Furthermore, Fox's television and film studios are enjoying a impressive season. Many of the top-rated shows on television -- NBC's "This is Us," CBS' "Life in Pieces," ABC's "Modern Family" and Fox's own "Empire" are all Fox productions.
Fox News Channel also continues to post strong ratings, and plans are in store for a direct-to-consumer Fox-branded sports platform -- both assets Fox reportedly would retain in a sale scenario.
Still, the good growth and studio news leaves the question: Why sell now?
Fox previously declined comment on the deal talks.