21st Century Fox (NASDAQ:FOXA) Executive Chairman Rupert Murdoch said on Thursday the company’s $52.4 billion asset sale to Disney (NYSE:DIS) “makes sense.”
“There’s a lot of change coming, people watch television differently, not news or business, but entertainment they watch very differently. We are seeing that in the mergers of new companies. Silicon Valley has spent tens and tens of billions on entertainment programming—so it makes sense,” Murdoch told FOX Business’ Maria Bartiromo on “Mornings with Maria.”
As part of the deal, Disney will acquire the studios that produce Marvel superhero movies, “The Simpsons” and the “Avatar” franchise, along with along with cable and international TV businesses.
Immediately prior to the acquisition, 21st Century Fox will separate the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company that will be spun off to its shareholders.
“The new Fox,” Murdoch said, “It will have a cash flow of at least $2 billion a year after everything, so you know we can see expanding that and taking other opportunities and building another great company there.”
The deal also includes Bob Iger remaining the chairman and CEO of Disney through 2021.
“The leadership is solely with Bob Iger under the condition of the deal that he would stay on,” Murdoch said. “We didn’t want someone running it we didn’t know.”
When asked whether he would consider combining News Corp. (NASDAQ:NWSA) and the remaining assets of Fox, Murdoch replied: “I don’t know, ideally yes, but I think that’s years away. We’ll have to think about that.”