Media mogul Haim Saban explains why the Fox-Disney merger ‘stumped’ him
Disney+ (DIS) has thrived during the COVID-19 pandemic, boasting last month that it has 86.8 million subscribers. The streaming service predicts it will have between 230 million and 260 million global subscribers by 2024, when it will be five years old.
The platform’s surge owes in part to an immense content library bolstered by the high-profile acquisition two years ago of 21st Century Fox, which brought aboard franchises like “X-Men” and “Deadpool” as well as old favorites like “Home Alone” and “Night at the Museum.” (The agreement also gave Disney 60% ownership of Hulu.)
Billionaire media investor Haim Saban told Yahoo Finance that the $71 billion deal between Disney and Fox “stumped” him at the time because it deviated from the longtime strategy of holding onto assets favored by Rupert Murdoch, executive chairman of Fox parent company News Corp.
But Saban said he understood the thinking behind Murdoch’s side of the deal, explaining that Murdoch believed he could not achieve the scale necessary to compete with other media behemoths and instead opted to “play the Disney card.”
“Rupert doesn't sell anything. He doesn't like to sell absolutely anything,” says Saban, who partnered with Murdoch in the 1990s on the launch of “Fox Family Channel,” which later sold to Disney in 2001.
“He realized it's a matter of too big to be small and too small to be big, so he really needed to make a move,” Saban adds. “He realized you need more scale, both at the content and as well as the distribution level.”
Saban said Murdoch first tried to acquire other entities that would help Fox amass enough scale to compete.
“When he identified the fact that there wasn't much for him to buy,” Saban says. “And [Disney CEO] Bob Iger came to him with this offer, he said, ‘Well, okay, I'll go the other way, I'll play the Disney card.’”
After the sale of 21st Century Fox, Murdoch retained ownership of Fox Sports, the Fox TV network, and Fox News, the latter of which set cable news viewership records last year. The channel drew heightened scrutiny for its friendly coverage of President Donald Trump over recent days in the aftermath of the siege of the Capitol.
Saban spoke to Serwer in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
Known for his entertainment industry savvy, Saban rose to prominence in the 1990s with the creation of “Mighty Morphin Power Rangers,” which led to a joint production venture with News Corp. called the Fox Family Channel that later sold to Disney (DIS). Currently, Saban serves as chairman and CEO of the private investment firm Saban Capital Group, which specializes in media and entertainment.
Speaking with Yahoo Finance, Saban offered unequivocal praise for the another recent media merger: between AT&T and Time Warner, which overcame a prolonged legal challenge from the Trump administration in 2019. He highlighted the content acquired by AT&T and praised Jason Kilar, who last April became the head of the company’s entertainment and news.
“Jason Kilar is a guy with a vision to run it, and I think that they're doing some very interesting things,” Saban says. “I think they're going to come out really well with the [Time] Warner acquisition, in my humble opinion.”
Read more:
Trump’s conduct ‘out of bounds’ amid Capitol siege: former Citigroup Chairman
Trump voters chose ‘the economy' over confronting ‘white supremacy’: Michael Eric Dyson
Trump’s refusal to concede ‘hurts the economy’: LinkedIn co-founder Reid Hoffman
Netflix co-founder on creative culture: We ‘manage on the edge of chaos’
Read the latest financial and business news from Yahoo Finance
