While the business world continues to discuss what the Walt Disney Company’s decision to buy most of the assets of Rupert Murdoch’s 21st Century Fox for $52.4 billion (nearly Rs 3.36 lakh crore) means for the industry, the media mogul has perhaps let slip what could have been one of the reasons behind going for the deal.
In an interview with Fox Business after the deal was announced, Murdoch said that American social media giant Facebook’s unsuccessful $600 million (Rs 3,900 crore) bid for the digital rights of the Indian Premier League earlier this year was a “warning shot”.
“The one that’s coming at sport is Facebook,” he said. “They unsuccessfully bid just for the digital rights of half of the Indian cricket for $600 million, so that was a warning shot you know.”
In September, Facebook put in the biggest bid for the digital rights of the next five seasons of IPL but lost out to Star India, a subsidiary of 21st Century Fox. Star India’s consolidated bid for television and digital rights worth Rs 16,347 crore ($2.55 billion) won the IPL media rights auction.
However, Facebook’s bid of Rs 3,900 crore for five years, or Rs 780 crore per year, was almost equal to the Rs 820 crore Sony Pictures Networks had paid for the IPL television rights every year between 2009 and 2017. While Facebook lost, “they’ve announced they’ll spend billions on sports rights, so we don’t know which country they’ll go after or what they’ll do”, Murdoch added.
While the American did not necessarily state that Facebook’s bid for IPL was responsible for the Disney-Fox merger, it wouldn’t really be stretching it to assume it played some part in the decision. Digital and social media companies are aggressively looking to enter the sports media rights space.
In August last year, Facebook live-streamed Manchester United footballer Wayne Rooney’s testimonial match against Everton. Via Facebook Live, fans could not only watch the game live, but also chat with other supporters, send messages to Rooney and donate money to his charity foundation.
In April, Amazon won the live-streaming rights for 10 of the United States’ National Football League’s Thursday Night Football matches in the 2017 season. Amazon reportedly paid $50 million and replaced Twitter as the digital rights holder for TNF. The e-commerce giant paid five times more than what the micro-blogging platform paid last season, reports said. Facebook and YouTube had also bid for the rights. Then, in September, Facebook signed a multi-year deal with the NFL to show game highlights.
Murdoch also said in his interview that the future of the industry is news and sports, which are the Fox assets he hasn’t sold. Under the new deal, Disney will only buy the film, television and international businesses of Fox, while Murdoch’s company will keep its news and business news divisions, its broadcast stations and Fox Sports. “The new Fox will have Fox News, Fox Business, Fox Broadcasting, Fox Sports, but the point is it will have a cash flow of at least $2 billion a year,” Murdoch was quoted as saying.
However, while Murdoch did not sell Fox Sports, Disney will acquire all of Star India’s businesses, which includes 10 sports channels. It is still not clear whether this will create a monopoly in the Indian sports broadcasting industry, considering Disney-owned ESPN has a joint venture with Sony Pictures Networks in India. Sony has 11 sports channels in India.
The Disney-Fox deal is also subject to approval from shareholders and antitrust regulators.