It was costly deal and do they really need a third animation studio. This is hardly surprising, especially now we already know Fox 2000 is closing. The next question is where the future lies for Searchlight?Looks like they might sell BlueSky.
Fox Animation Co-President Andrea Miloro Stepping Down (Exclusive)
Andrea Miloro is exiting as co-president of Fox Animation, the division Disney inherited with its $71.3 billion acquisition of most of the assets of the former 21st Century Fox.www.hollywoodreporter.com
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News Disney and Fox come to terms -- announcement soon; huge IP acquisition
- Thread starter ohioguy
- Start date
bartholomr4
Well-Known Member
My bet, Disney Annimation / Pixar absorb Blue Sky into their already common infrastructure. The technical platform at Blue Sky and all of the talent is expensive, hard to replace, and I am sure readily re-usable by Disney for Disney+ requirements. Perhaps Blue Sky survives as a brand, under the common infrastructure. The previews for Spies in Disguise looks good to me, and then there is Scat and Ice Age.... I can't see Disney throwing established characters out....
If they do keep it I also think it may be more likely for Disney+/Hulu content, rather than theatrical features.
the.dreamfinder
Well-Known Member
Lol
Disney would get more money for BlueSky if all of its IPs came with it.
Viacom would be a perfect fit and it could be integrated into Nickelodeon instead of the sh-tshow known as Paramount Animation.
ImperfectPixie
Well-Known Member
Off topic, but your comment reminded me that I'm a more than a little miffed that Paramount (on it's cable network) advertises a website specifically built for having an extra-marital affair.
Disney should not sell Blue Sky. They would be crazy to help another studio build an animation division. Use Blue Sky for television and an occasional movie. Fox was actually purchased for the movie and television library, television production and international businesses.
Rodan75
Well-Known Member
I think we should be careful about reading too much into this. The exec has had multiple HR complaints about a suite behavior.
I suspect they will keep Blue Sky in some capacity.
Disney Layoffs Continue as Key Production, VFX Executives Are Let Go (EXCLUSIVE)
Total number of film layoffs since Disney bought Fox has reached roughly 250.
variety.com
bartholomr4
Well-Known Member
Sinclair completes purchase of divested Fox Regional Sports Networks
ReutersAugust 23, 2019
WASHINGTON (Reuters) - Sinclair Broadcast Group Inc <SBGI.O> on Friday completed a $9.6 billion deal to acquire Fox's 22 regional sports networks after the U.S. Justice Department gave its consent.
The networks were acquired by Walt Disney Co <DIS.N> earlier this year as part of its acquisition of Twenty-First Century Fox Inc but the Justice Department required the divestiture of the regional networks. The networks have exclusive local rights to 14 Major League Baseball, 16 National Basketball Association, and 12 National Hockey League teams.
ReutersAugust 23, 2019
WASHINGTON (Reuters) - Sinclair Broadcast Group Inc <SBGI.O> on Friday completed a $9.6 billion deal to acquire Fox's 22 regional sports networks after the U.S. Justice Department gave its consent.
The networks were acquired by Walt Disney Co <DIS.N> earlier this year as part of its acquisition of Twenty-First Century Fox Inc but the Justice Department required the divestiture of the regional networks. The networks have exclusive local rights to 14 Major League Baseball, 16 National Basketball Association, and 12 National Hockey League teams.
bartholomr4
Well-Known Member
Sinclair completes purchase of divested Fox Regional Sports Networks
ReutersAugust 23, 2019
WASHINGTON (Reuters) - Sinclair Broadcast Group Inc <SBGI.O> on Friday completed a $9.6 billion deal to acquire Fox's 22 regional sports networks after the U.S. Justice Department gave its consent.
The networks were acquired by Walt Disney Co <DIS.N> earlier this year as part of its acquisition of Twenty-First Century Fox Inc but the Justice Department required the divestiture of the regional networks. The networks have exclusive local rights to 14 Major League Baseball, 16 National Basketball Association, and 12 National Hockey League teams.
The Yes network sale also will close by the end of the month. To understand the total impact to Disney you have to add the $9.6 from the Fox Regional Sports, plus almost $4 billion from the Yes Network plus the debt that each of these entities have (which transfers from Disney to Sinclair) for a total of almost $18 billion dollars to Disney. Disney also transfers the employees and their associated retirement/health plans etc. Depending on what Disney does with this cash, if they apply it all to debt, they will be close to paying back half of what they borrowed to purchase 21CF.....
AnotherDayAnotherDollar
Well-Known Member
Use it to buy Spider-man from Sony! Lol jk
I think they will definitely use some of that to deleverage, but they have other initiatives they have to fund. As McCarthy mentioned in one of the calls, they will deleverage quickly, but they won't stop investing in the company's future. If they get a 2nd park in Shanghai and/or a 2nd resort in China then that's a good use of this money. A little early for more M&A talk, but if they were to acquire a few game publishers, then it would also be a good use of this money. It depends if the interest rate they got on the loan is low enough or not.
I hope they use most of it to deleverage though so they can start stock buyback again sooner rather than later.
bartholomr4
Well-Known Member
Actually, I suspect they will retire a bunch of 21CF debt, they acquired with the purchase as it is high cost debt vs today's interest rates.
AnotherDayAnotherDollar
Well-Known Member
Makes sense. That's the best use of that capital.
Do you know the amount of debt that Disney inherited from Fox?
Also they are getting around 14B in cash + unloading ~4B in debt from the RSNs + unloading opex costs from employees/pension/etc. Do I have it all right?
bartholomr4
Well-Known Member
Yes,
It appears they acquired about 22.1 Billion in long-term debt from 21CF as of the Merger date (from the SEC). Old Disney had about $24 Billion at the time of the merger, for a total then of roughly $46 Billion. At the last earnings report, that total had fallen to $36.3 Billion. I think that total reflects a pay-down from the proceeds from SKY. So to get back to the pre-merger debt ration, we are looking at about $14 billion in debt pay down. I am not sure what the cost basis was for the Regional Sports Networks on their books, and if they have to declair a profit or can claim a loss on them. If there is a loss (I think they valued them over $20 billion in the proxy), there may be a tax benefit on the sale, which would make the number above larger.......
On the balance sheet Disney does list a Current Debt due (to be payed within a year) of $21.9 Billion. Its hard to tell what of this is operating or short-term debt and what is long term.... We can look at the next quarterly report to see what change has been made (in the $36.3 number) to tell if they are using the funds for debt reduction or other corporate purposes.....
AnotherDayAnotherDollar
Well-Known Member
Confused by the bolded. So if there is a loss of ~6B (i.e. if they valued at 20B and sold them for a total of 14B) and there is a tax benefit on the sale, why would the amount of debt they have to pay down be larger? Wouldn't the 6B be a benefit in taxes and they could write that off over the coming years?