Comcast, Verizon Looking At 21st Century Fox Assets

Comcast Corp and Verizon Communications Inc have both expressed interest in acquiring a significant part of Rupert Murdoch’s Twenty-First Century Fox Inc’s assets, two people familiar with the situation told Reuters on Thursday.

News of competing interest in some of Murdoch’s assets broke even though the U.S. Justice Department was preparing a lawsuit to block AT&T Inc, the largest pay-TV provider in the United States, from buying Time Warner Inc for $85.4 billion, according to a source. This raised questions about the U.S. government’s willingness to allow large media industry mergers.

The Fox assets that buyers have expressed interest in include Fox’s movie and TV production studios, cable networks FX and National Geographic, and international assets such as the Star network in India, and the European pay TV provider Sky Plc. These units have also been the subject of recent talks between Fox and Walt Disney Co, one of the sources said.

Fox shares jumped nearly 8.0 percent in after-hours trading after the Wall Street Journal first reported the news. Shares of Viacom Inc and CBS Corp also rose more than 2.0 percent, a sign investors may see them as potential targets also.

Comcast has approached Fox about its interest, and talks are in early stages, the source added, requesting anonymity. There is no guarantee that talks between the companies will result in a deal.

Fox, Comcast and Verizon declined comment.

After Comcast first bought a stake in NBCUniversal in 2011, buying the Fox assets would give Comcast, the largest cable provider in the United States, an international distribution footprint through ownership of Sky and Star in India.

Comcast has steadily boosted its ownership of content over the years and acquiring Fox’s assets would further position Comcast as a diversified conglomerate to rival Disney, analysts said.

Verizon, which has said it is launching a new streaming service, could have more targeted advertising with a vertically integrated platform, he added.

Traditional cable television networks have been struggling with faster-than-expected subscriber erosion in the competition with streaming services like Netflix Inc and Amazon.com Inc.

The moves come after the U.S. Federal Communications Commission on Thursday voted to remove key roadblocks to increased consolidation among media companies, potentially unleashing new deals among TV, radio and newspaper owners as they seek to better compete with online media.