Disney To Buy Fox Family
As the mergers continue, Disney answers the AOL Time Warner and Viacom call and grows for the first time since the 1996 Capital Cities/ABC merger. On Saturday, July 21, 2001, the LA TIMES Sallie Hofmeister reported that the Walt Disney Co. will buy Fox Family for $3.3 billion plus assume $2.1 billion of the troubled ventures debt. Long in the rumor mill, this new acquisition is supposed to be final and announced within a few days according to Ms. Hofmeisters sources. Obviously the true value for Disney in this deal is obtaining the fifty international Fox Family channels. Spread across Europe and Latin America, these channels will provide avenues for Disney to penetrate these markets. While Toon Disney reaches 15 million U.S. subscribers, it has very little international spread. Disney will also add the Fox Family Channel to its arsenal. The channel currently reaches 80 million households and targets an older audience than Disneys Disney Channel and Toon Disney. MIGHTY MORPHIN POWER RANGER king Haim Saban merged his Saban Entertainment with News Corp. five years ago to form a greater Fox Kids Network to compete with WB Kids and Disney. However, soon the venture proved unprofitable and the partners were driven into cableland. After struggling from ground zero in 1997 through three painful years of strategic and management shifts, the last three quarters have been a different story for the Family Channel as it has started an upward curve. Last December, Saban called upon News Corp. to buy him out by enacting a provision in his deal. Currently, News Corp. is stashing cash as they are expected to merge their satellite assets with DirecTV owners Hughes Electronics Corp. for $6 billion in cash soon. Therefore, selling Fox Family was a natural. The partner was also a perfect fit as Fox Family was formed by the acquisition of International Family in 1997 the key competitor in this buy was Disney. Saban is expected to capture a cool $1.6 billion from the deal. His next move has not yet been announced. Fox Kids Network is not included in the sale and will continue with its struggle in the competitive kids world.