Disney Is Said to Have Resumed Talks to Buy Parts of Fox

The Walt Disney Company has resumed talks with 21st Century Fox about buying at least part of the company, as Fox weighs whether to shrink its empire, two people briefed on the matter said on Saturday.

Fox is still in talks with Comcast about a potential deal, added these people, who were not authorized to speak publicly about the negotiations. The Murdochs, who control Fox, are expected to make a decision about whether to pursue a sale by the end of the year, one person added.

The return of Disney, which held talks with Fox earlier this year, highlights how media companies are increasingly seeking to compete in a new era of streaming by getting bigger and acquiring more content. It also leaves medium-sized players like Fox to decide whether they can buy the scale they need — or sell and focus on particular business niches.

If Fox decides to pursue sales negotiations, it would represent a potential unwinding of a media kingdom that the Murdoch family has assembled for decades. Disney and Comcast have been most interested in only part of the constellation of Fox businesses, notably the 20th Century Fox movie studio; cable channels like FX; Sky, the British broadcaster; Star, an Indian broadcaster.

Fox would be left with several highly profitable businesses, including Fox News, its broadcast network and its sports pay-TV channel.

Earlier this year, Disney said that it would build two Netflix-style streaming services to address structural challenges to its vast television businesses — namely that more consumers, particularly younger ones, are foregoing pricey cable subscriptions.

One question that would still hang over any transaction is how regulators would view such a deal. The Justice Department has sued to block AT&T’s $85.4 billion takeover of Time Warner, a so-called vertical merger that would unite the largest television distributor in the United States with a major content producer. The Trump administration has argued that the combination would give one company too much power over both the creation of content and its distribution.

The companies are fighting the government’s claims, asserting that they run contrary to established law. But deal makers have wondered whether the Trump administration’s stance would pose difficulties for any sale of Fox assets.

Representatives for Fox, Disney and Comcast declined to comment, or did not immediately respond to requests for comment, on the state of the talks. News of the talks having resumed was first reported by The Wall Street Journal.

Content originally published on https://www.nytimes.com/2017/12/02/business/dealbook/disney-21st-century-fox.html by MICHAEL J. de la MERCED