21st Century Fox (US)

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Fox served for several years as an umbrella brand for the entertainment assets of what was until recently Rupert Murdoch's News Corporation. Following the spin-off of its publishing operations, those Fox businesses now form the core of the renamed 21st Century Fox group. Cornerstones are movie studio Twentieth Century Fox and the Fox TV broadcast network, which has risen steadily in the ratings from rank outsider to one of the top networks. At the same time, the Fox News cable channel has established a position as the most watched news broadcaster in the US. The business has also dabbled heavily, but not always happily, in interactive media through the acquisition or development of destinations sites including the social networking portal MySpace and online video service Hulu, now jointly owned by Fox, Disney, Time Warner and Comcast. For several years between 1999 and 2005, Fox was a self-contained and separately quoted division of News Corp. It was later absorbed back into the larger group, before being re-established as a standalone business from July 2013. The new 21st Century Fox also controls most of the old group's international satellite broadcasting interests including its holding in Sky in Europe. After years, decades even, as an acquirer of other businesses, Fox reversed its strategy at the end of 2017, accepting an offer to itself be acquired by Disney for $66bn. A rival bid emerged from Comcast; in the end Comcast withdrew from the main contest in order to focus on its attention on Sky. The bulk of Fox's entertainment assets will now transfer to Disney, while Sky will be acquired by Comcast. Fox will slim down to its US broadcast network, and cable strands Fox News and Fox Sports 1.

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Brands

Fox Movies Fox News
Fox Searchlight Fox Sports Net
Fox Home Entertainment FX
National Geographic TV The Speed Channel
Hulu.com MyNetworkTV

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 11th Oct 2018: That was fast. Comcast this week became 75% owner of European satellite broadcaster Sky, following the transfer of 21st Century Fox's 39% controlling stake. Most of Fox's appointed representatives, including chairman James Murdoch, have resigned from the board. It's the end of an era for the Murdoch clan, but a brave new world for Sky (and indeed Comcast). "We are pleased today to be the majority owner of Sky," said Comcast CEO Brian Roberts. "Led by Jeremy Darroch and his superb team - now together with Comcast - our combined global leadership in technology and content paves the way for us to accelerate investment and growth in Sky’s brand and premier platforms. We are also fully committed to ensuring Sky News' future, maintaining its editorial independence, and preserving its strong track record for trusted, high quality, impartial news."

Adbrands Weekly Update 11th Oct 2018: Hope Hicks, former senior adviser to President Trump and sometimes referred to as the Trump whisperer for her ability to curb his wilder excesses, was named as the next chief communications officer of what will remain of 21st Century Fox once the transfer of its entertainment assets to Disney has completed. That sale is expected to close during the first half of next year, at which point current communications chief Julie Henderson will retire. Hicks stepped down from the White House earlier this year.

Adbrands Weekly Update 27th Sep 2018: Comcast was victorious in a nail-biting blind auction last Saturday for European satellite broadcaster Sky, fighting off a rival bid from Sky's part-owner Fox in partnership with Walt Disney. In an unprecedented move for a business of this size, UK regulators called the auction to end months of bid and counter-bid between the two sides. After two inconclusive early rounds, Comcast seized the prize in the final contest with an offer of £17.28 per share - equivalent to a total price of £30.6bn or around $39bn - against £15.67 from Fox and Disney. As a result, Disney will proceed with the purchase of the other 21st Century Fox assets as planned. Fox has already said it will surrender its existing 39% stake in Sky to Comcast, which has in turn confirmed that Sky will maintain its notional independence. "The consistent theme at Comcast has been letting leaders of our businesses make their own decisions, being decentralised and keeping an entrepreneurial spirit," said Comcast CEO Brian Roberts said. "We've said this to [Sky CEO] Jeremy [Darroch] and the rest of the Sky team... They will be able to act as an independent company but with the resources of a $150bn company behind them." One hurdle remains: the deal requires majority acceptance by Sky's shareholders; but the decision by Fox to surrender its own 39% stake appears to make full acceptance inevitable.

Adbrands Weekly Update 9th Aug 2018: 21st Century Fox reported strong results for the year to June, likely to be the last in its current form before the bulk of the business is acquired by Disney. New tax laws caused net income to soar by 49% to $4.5bn on revenues up 7% to $30.4bn. Pretax income, excluding the one-off gain, was actually down slightly. On a divisional basis, the weakest performance came from Television - the main Fox broadcast network which will form much of a slimmed-down "New Fox" entity - where revenues and operating profit both fell sharply. However Fox News - also to be retained - remains a financial powerhouse. The group didn't break out the respective contributions from Fox News and the other cable assets that are being sold. However combined revenues rose 11% to $17.9bn - the eighth consecutive annual increase of over $1bn - while earnings rose 10%, accounting for almost 90% of the group's total operating income.

Adbrands Weekly Update 19th Jul 2018: Comcast today withdrew its bid to acquire the bulk of the entertainment assets being sold by 21st Century Fox, leaving the way open for Walt Disney to clinch that deal. Fox has already accepted Disney's bid and has shown a clear preference for that deal over a rival arrangement with Comcast. However, at the same time, Comcast reiterated its commitment to acquire 100% of European satellite broadcaster Sky. The most likely outcome now would be that Fox accepts Comcast's bid for the 39% of Sky it already owns, rather than press on with its own plans to buy the outstanding shares and then sell the whole business to Disney. Sky's board has already agreed to recommend Comcast's offer for the remaining publicly owned shares.

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Background

Free for all users | see full profile for current activities: Rupert Murdoch acquired Twentieth Century Fox in 1985, exactly 50 years after it was first created by the merger of Darryl F Zanuck's independent production company Twentieth Century Pictures with Fox Film Corporation, one of the early pioneers of the industry. Hungarian immigrant William Fox had been one of the first independent filmmakers in the United States. He first set up his company in 1909 to oppose the monopoly held by Thomas Edison's Motion Picture Patents Company on film manufacturing and distribution. Officially an "outlaw", he defied the MPPC with a string of sensational melodramas starring sexy "vamp" star Theda Bara as well as crowd-pleasing cowboy pictures with Tom Mix. Fox also built a chain of lavishly decorated movie theatres across the country. When sound arrived in the early 1930s, Fox invested heavily in the new equipment, but was side-swiped by the depression and was forced to sell off his production business in order to hold on to the cinemas.

At around the same time, Darryl Zanuck, the ambitious young head of production at Warner Brothers, resigned over a salary dispute. Determined to write his own paychecks in future, he formed independent production company Twentieth Century Pictures, agreeing a deal with well-established United Artists to distribute his movies. However the UA deal quickly soured, and Zanuck was forced to find a new partner. In 1935 he agreed to merge his fledgling business with ailing Fox Film to form Twentieth Century Fox, poaching UA's Joseph Schenk to become chairman. (Despite the sale of Fox Studios, William Fox was forced to declare bankruptcy in 1936, but later tried to bribe a judge and was jailed for a year in 1942. He died in 1952).

Zanuck remained the figurehead for Twentieth Century Fox for almost four decades. Although he could be as tyrannical and mercurial as any of his peers, he was arguably one of the most creative of the studio heads, interfering incessantly with scripts (as well as with his roster of eager young starlets) but rarely intruding in the actual film-making process. As a result, Fox quickly became known as the directors' studio, a comparatively hassle-free home for "auteurs" such as Ernst Lubitsch, John Ford, Elia Kazan and Joseph Mankiewicz. Virtually the only gentile studio boss in Hollywood, Zanuck also tended to steer clear of the sentimental fantasies produced by other studios. Instead he broke new ground, daring to tackle more controversial social issues such as dustbowl poverty (memorably in The Grapes of Wrath, which author John Steinbeck described as even harsher than his original novel), anti-Semitism (Gentleman's Agreement), racism (Pinky) and mental illness (The Snake Pit).

At the same time, he kept audiences happy with a string of box-office female stars including Shirley Temple during the 1930s, Betty Grable in the 1940s, Marilyn Monroe and Jayne Mansfield in 1950s. In a bid to ward off the threat from television during that decade, Zanuck invented big budget historical spectacle with The Robe, the first movie filmed in Cinemascope. But the march of television was relentless and Zanuck stunned the industry when he bailed out from Fox in 1956 and moved to Europe to become an independent producer.

Initially the studio continued to prosper, turning its attention to big budget musicals, and scoring hits with adaptations of stage triumphs The King and I and South Pacific. But in the early 1960s, disaster struck when two more expensive musicals, Star! and Hello Dolly both failed at the box office. At the same time the studio was struggling desperately to contain disastrous cost overruns on the production of Cleopatra with Elizabeth Taylor and Richard Burton. Meanwhile former boss Zanuck was riding high on the success of his independently produced D Day epic The Longest Day, and in 1963 he was begged by Twentieth Century Fox's board to take back control of the studio. He agreed, installing son Richard Zanuck as head of production. Their first project was another musical, a highly unpromising tale of a nun who becomes surrogate mother to an Austrian family at the outset of World War II. But The Sound Of Music turned out to be a box office smash, earning five Oscars and ending up as the most successful movie since Gone With The Wind almost 30 years before.

That was to be Darryl Zanuck's swansong. There were no follow-ups to the success of The Sound Of Music and the studio struggled through the second half of the decade. After another mammoth flop in 1968 with Doctor Doolittle, the Fox board made Zanuck Jr acting president of the studio, but the infighting between father and son grew unmanageable, and in 1971 both Zanucks were forced out. Twentieth Century Fox drifted along for a few years but then got a new lease of life in 1977 when it agreed to finance production of another very unpromising-sounding movie, a science fiction adventure set in "a galaxy far far away". Not even director George Lucas had anticipated just how enormously successful Star Wars would be, quickly becoming the most successful film of all time.

With the movie industry now regarded as a hot investment, Fox was acquired in 1981 by oil tycoon Marvin Davis for $722m. He played with the business for four years before selling it on to Rupert Murdoch at a loss for $575m. For Murdoch it was to be the platform for a new entertainment business which would run alongside his newspaper interests in America, acquired a few years earlier. In 1986 he established a television arm with the purchase of six stations from Metromedia. A decade later he established cable news channel Fox News to rival the then all-powerful CNN, followed by a family strand one year later with the acquisition of Pat Robertson's International Family Entertainment. That company's Family Channel was promptly rebranded as Fox Family Worldwide, becoming the springboard for the rollout of the Fox Kids cable and satellite channels. A sports channel was launched the same year, initially as a joint venture with Liberty Media Group. (Fox bought out Liberty in 1999 and rebranded the channel as Fox Sports Net). In order to bolster the output of his sports channels, News Corp acquired the Los Angeles Dodgers in 1998. Fox scored that year with the movie Titanic which beat the odds to become the highest-grossing film of all time. Buoyed by that movie's success, News Corp floated off a 19% stake in Fox Entertainment, generating $2.8bn of cash, then one of the largest ever US corporate offerings. (Those shares were bought back in 2005 for around $6.2bn in News Corp stock).

In 2001 the group began shuffling its pack of broadcast interests, grouping them as Fox Cable Networks, while also acquiring a pack of additional television stations across the US from Chris-Craft. At the same time, the company's partner in Fox Family Worldwide, TV entrepreneur Haim Saban, exercised his option to force News Corp to buy his 49% stake in the business. Unwilling to take full ownership, News Corp began looking for a buyer for the whole business. It was subsequently sold to Walt Disney's ABC division in 2001. In 2003, after what had been literally years of on-off negotiations with General Motors, News Corporation agreed a deal to purchase the controlling stake in Hughes Corporation. News Corp transferred its ownership of Hughes into Fox Entertainment Group.

In 2004, Fox's 169 US television stations were each fined $7,000 by the FCC for airing an episode of reality TV show Married In America in which topless couples sprayed whipped cream on each other, before the 10pm watershed. The combined fine totaled almost $1.2m, a new record for indecency penalties against television broadcasters, more than double that handed to CBS for the infamous incident in which Janet Jackson exposed a breast during the 2004 Super Bowl. See full profile for current activities


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