Post Disney-Fox Deal: Fox Gets Higher Ad Exposure

After its proposed deal to sell TV/entertainment assets to Disney is complete, the new 21st Century Fox company will have a much greater share -- and exposure -- to advertising revenue.

MoffettNathanson Research estimates Fox will get 49% of its revenues from advertising revenue after the deal is signed; currently it gets 26% of its revenue from advertising.

The downside risk, writes Michael Nathanson, is that “The Fox Network continues to struggle from a ratings perspective leading to advertising declines that offset upside from [retransmission fees].”

Fox's affiliate fees will rise from a 45% share to a 49% share. “Other” income will drop from 29% to 2% -- business generated mostly from box office and other revenue for TV-film content creations.

Disney’s revenue will remain diversified, with advertising inching up to a 16% share from 14%, while affiliate fees will climb to 28% from 23%. Other income, which includes a big chunk coming from its parks and resorts, is now at 56% from 63%.



Factoring in the proposed deal, MoffettNathanson estimates Disney’s 2018 annual revenue to be $84.1 billion, and 21st Century Fox's to be $10 billion. For its fiscal year ending in 2017, Disney reported annual revenue of $55.1 billion; Fox, for its fiscal year 2017, was at $28.5 billion.

Disney’s combined studios, Disney and and 20th Century Fox TV, would currently create 39.5 shows (accounting for partial ownership) of the 113 scripted broadcast shows in this current TV season. That's far more than the next-biggest studio, Warner Bros, at 23.5. 

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