Is Twenty-First Century Fox Inc. (FOXA) for sale? Yes, no, maybe?
Lachlan Murdoch, who shares the title of Fox chairman with his father, Rupert, dodged the 800-pound question on Wednesday, Nov. 29, saying at Business Insider's Ignition conference that he wouldn't "feed that gossip and speculation," adding that he wasn't "going to talk about the stuff that's been bubbling out there."
But bubble it has, and it will likely continue to simmer until the Murdochs either sell a large chunk of their company or make clear to investors -- and nervous employees -- that they have no plans to split up one of the world's largest media conglomerates.
In recent weeks, Comcast Corp. (CMCSA) and Walt Disney Co. (DIS) have engaged in deal talks with Fox, according to sources familiar with the companies. Possible transactions have focused on Fox selling its Hollywood movie studios and TV production houses as well as its international distribution business, the Star India networks and a 39% stake in European satellite TV operator Sky plc.
Such potential deals would leave the Murdochs with the Fox News Channel, its sports businesses including cable network FS1 and regional sports networks, the Fox broadcast network and its local TV station group.
At the root of the talks is the widespread view that scale is essential in both content and distribution given the ascendancy of Netflix Inc. (NFLX) and recent moves by Amazon.com Inc. (AMZN) and Apple Inc. (AAPL) to enter the media business.
Disney, the world's largest entertainment company, plans to launch two direct-to-consumer streaming services over the next two years: one featuring ESPN and a second featuring its Pixar, Lucasfilm, Marvel and Disney brands.
The news stories around such talk, Murdoch said, have served to highlight the need for scale in today's global media business, which is fast moving toward direct-to-consumer services that bypass pay-TV operators, or even brick-and-mortar movie theaters. And if scale is what's needed to thrive, Fox is well positioned, he said.
Fox's cable TV channels and its broadcast network are on all of the new streaming pay-TV services such as Sling TV from Dish Network Corp. (DISH) and DirecTV Now from AT&T Inc. (T) , Murdoch said. The same can't be said, he pointed out, for Viacom Inc. (VIAB) , Discovery Communications Inc. (DISCA) or A&E Television Networks LLC, jointly owned by Hearst Corp. and Disney.
"Absolutely, there are subscale businesses in media today, which will be the losers," Murdoch said. "We don't believe we're in that situation."
Of course, if that's the case, the Murdochs might want to set the record straight and say that they're not looking to split up Fox.