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The Potential Value of 21st Century Fox’s Media Assets

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Discussions to divest certain assets

Twenty-First Century Fox (FOX) (FOXA) has been reported to be engaged in discussions that could see it unload a large portion of its entertainment assets, include its film and television studio.

Walt Disney (DIS), Comcast (CMCSA), Verizon (VZ), and other unspecified companies are said to be interested in acquiring Fox’s assets such as the 20th Century Fox studio, the National Geographic cable group, international television operations including Europe-based (EFA) Sky and India-based Star India, and Fox’s stake in streaming video provider Hulu.

Assets likely to be sold are worth $48.5 billion

If Fox goes ahead with the sale of the assets, how much could the transaction generate for the company? In a report cited by Variety, Michael Nathanson—founding partner of MoffettNathanson—provided estimates of the enterprise values of the assets Fox might sell and those that it might keep.

According to Nathanson, the assets that might be sold by Fox have an enterprise value of ~$48.5 billion. The film and television studio, along with its library, is assigned the highest value among the assets that could be sold. The studio unit is valued at roughly $15.0 billion.

In fiscal 2017,[1. fiscal 2017 ended June 2017] Fox’s studio business, or the Filmed Entertainment segment, brought in $8.2 billion in revenues and slightly less than $1.1 billion in operating profits. Both revenues and profits from the studio business fell from fiscal 2016.

Fox could keep assets valued at $45 billion

When it comes to breaking up the entertainment business and selling a portion of it, Fox is expected to keep Fox Broadcasting network along with Fox News and Fox Sports channels. The assets that Fox might keep are estimated to have an enterprise value of $45.1 billion.

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