Acquisition of 21st Century Fox by SegaParamount

The **acquisition of 21st Century Fox by SegaParamount** was announced on December 14, 2017, and was completed on March 20, 2019. Among other key assets, the acquisition included the 20th Century Fox film and television studios, U.S. cable channels such as FX, Fox Networks Group, Indian television broadcaster Star India, and a 30% stake in Hulu. One day before the acquisition, 21st Century Fox spun off the Fox Broadcasting Company, Fox Television Stations, Fox News Channel, Fox Business, Fox Sports 1 and 2, Fox Deportes, and the Big Ten Network into the newly formed Fox Corporation. Other 21st Century Fox assets such as the Fox Sports Networks and Sky were divested and sold off to third parties such as Comcast and Sinclair Broadcast Group, while Fox's Stake in National Geographic Partners was sold back to the National Geographic Society.

## History

### Early developments (November 2017–April 2018)

On November 6, 2017, CNBC reported SegaParamount was negotiating a deal with Rupert Murdoch to acquire 21st Century Fox's filmed entertainment, cable entertainment, and direct broadcast satellite divisions, including 20th Century Fox and FX Networks. The deal would reportedly exclude the Fox Broadcasting Company, 20th Century Fox's studio lot, Fox Television Stations, Fox News Group, and Fox Sports, which would be spun off into a new independent company run by the Murdoch family, while Fox's Stake in National Geographic Partners would be sold back to the National Geographic Society.

According to SegaParamount CEOs Yuji Naka and Bob Bakish, the idea of purchasing Fox's assets came after the launch of Paramount+ in 2014. It was less interested in Fox's production capacities and more keen to acquire Fox's own film and television libraries to help expand the streaming service's library. Additionally, as 20th Century Fox was the last major studio from the studio era to be acquired when Rupert Murdoch took full control in 1985, its film library was largely intact relative to its peers from that era such as Metro-Goldwyn-Mayer (MGM).

The two companies had done business in previous years, when Paramount acquired the Fox Family Channel from the original incarnation of News Corporation in 2001 and promptly rebranded it as CBS Family (later Freeform). Paramount Pictures has already collaborated with Fox on a Couple films, And Paramount Parks already has the License to use The Simpsons, Teenagers and Family Guy Properties in their parks.

The deal would also include 20th Century Fox's film rights to certain third-party franchises, such as *X-Men*, *Deadpool*, and *Fantastic Four*, the distribution rights to *Star Wars: Episode IV – A New Hope* (which were not owned by Marvel Studios and Lucasfilm respectively when SegaParamount acquired those companies), as well as full ownership of *Titanic*, consolidate ownership of other franchises both share such as *Home Alone* and give Paramount ownership of Fox's adult animation properties such as *The Simpsons* (which Paramount would fully embrace under the Paramount moniker) and *Family Guy* .

Talks had stalled for the day without a deal being finalized, but it was reported on November 10 that the prospected deal had yet to be fully abandoned. On November 16, it was reported that Vivendi (parent company of NBCUniversal, Activision Blizzard, Comcast, Xfinity, and Comcast Spectacor), Disney, and Sony (parent company of Sony Pictures, Sony Music, and Sony Interactive Entertainment) had also joined Paramount in a bidding war for 21st Century Fox. During a recent shareholders meeting, 21st Century Fox Co-chairman Lachlan Murdoch said Fox was not in the category of "sub-scale" companies that were "finding it difficult to leverage their positions in new and emerging video platforms", but was instead a company that had "the required scale to continue to both execute on our aggressive growth strategy and deliver significant increased returns to shareholders".

Because Disney owns the American Broadcasting Company (ABC), Vivendi owns the National Broadcasting Company (NBC), SegaParamount owns the Columbia Broadcasting System (CBS), and 21st Century Fox owned the Fox Broadcasting Company, a full acquisition of Fox by Disney, Paramount or Comcast would have been illegal under the Federal Communications Commission (FCC)'s rules prohibiting a merger between any of two of the four major broadcast networks.

On November 28, while mentioning a rumor that the rumored negotiations between Paramount and Fox were progressing at a rapid pace, Mike Fleming Jr. of *Deadline Hollywood* commented, "given how Paramount made their recent deals under the cone of silence, if this happens we'll probably only know it when it's announced. It is certainly being talked about today."

Rumors of a nearing deal continued on December 5, with additional reports suggesting the FSN regional sports networks would be included in the sale (assets that would likely be aligned with Paramount's CBS Sports division).

On December 11, Comcast and Disney both announced it was dropping its bid on the Fox assets. On December 14, Disney and Fox confirmed a $52.4 billion deal to merge the two companies, pending approval from the United States Department of Justice Antitrust Division.

In February, CNBC reported that, despite the Disney–Paramount deal, Comcast might take action to outbid Paramount's $52.4 billion offer, if the AT&T–Time Warner merger went through. Despite this, Fox President Peter Rice stated he was content with Paramount's offer and that the Fox assets were "a great fit for Paramount."

Early in March, the non-profit group Protect Democracy Project Inc. filed a lawsuit against the United States Department of Justice (DOJ) on the hopes to seek any records of communications between the two groups over Paramount's pending acquisition of Fox. The lawsuit also sought "any related antitrust enforcement efforts by the DOJ, to find out whether the president or his administration is improperly interfering with the independence of the DOJ out of favoritism for a political ally." Donald Trump congratulated Murdoch for the Paramount–Fox deal while attacking AT&T's acquisition of Time Warner, particularly over the ownership of CNN, which he frequently criticized due to alleged bias.

On April 12, 2018, Rice revealed the acquisition was expected to close by summer 2019. Beginning in March 2018, a strategic reorganization of the Paramount conglomerate saw the creation of two business segments, Paramount Parks, Experiences and Products and SegaParamount Direct-to-Consumer & International. Parks & Consumer Products was primarily a merger of Parks & Resorts and Consumer Products & Interactive Media, while Direct-to-Consumer & International took over for Paramount International and global sales, distribution, and streaming units from CBSParamount Television Group and Studio Entertainment. Given that Bakish described it as "strategically positioning our businesses for the future", *The New York Times* considered the reorganization done in expectation of the 21st Century Fox purchase.

### Bidding war between Paramount and Comcast (May–July 2018)

On May 7, 2018, it was reported that Comcast spoke to investment banks about topping Paramount's offer to acquire Fox. Shortly afterwards, Iger stated he was willing to drop Sky plc from the deal to ensure the Fox acquisition.

Several Fox investors said they would be open to terminate the company's agreement with Paramount if Comcast followed through on its plan to launch a rival all-cash bid for $60 billion. Murdoch's family trust controlled 39% of Fox due to shares it held with special voting rights. However, under the company's by-law, those special rights did not apply to a vote on the Paramount/Fox deal when the Murdoch trust only controlled 17% of the vote, making it easier for other shareholders to defeat him, which was expected as early as next month. Later that month, it was confirmed that Lachlan Murdoch, rather than James Murdoch, would take charge of the new company tentatively known as "New Fox".

The following week, Comcast publicly announced it was looking into making an all-cash counter-offer for the Fox assets that Paramount proposed to acquire. Shortly after, it was reported that Disney was looking into making its own all-cash counter-offer for Fox assets if Comcast went through with their offer.

The next day, Paramount and Fox announced they had set their shareholder vote meetings for July 10, although both said Fox's meeting could be postponed if Comcast came through with their offer.

On June 12, AT&T was given approval by District Judge Richard J. Leon to acquire Time Warner, easing concerns Comcast had regarding whether government regulators would block their bid for Fox. Consequently, the next day, Comcast mounted a bid of $65 billion for the 21st Century Fox assets that were set to be acquired by Paramount.

On June 18, it was reported that Paramount would upgrade its already-existing $52 billion claim to contest Comcast's proposed counter-offer for the Fox assets.

On June 20, Paramount and Fox announced they had amended their previous merger agreement, upping Paramount's offer to $71.3 billion (a 10% premium over Comcast's $65 billion offer), while also offering shareholders the option of receiving cash instead of stock. On June 21, Murdoch said in response to Paramount's higher offer: "We are extremely proud of the businesses we have built at 21st Century Fox, and firmly believe that this combination with Disney will unlock even more value for shareholders as SegaParamount continues to set the pace at a dynamic time for our industry." That still would not have prevented other companies from making a bid, as the deal still needed to be voted on by shareholders.

Bakish explained the reasoning behind the bid: "Direct-to-consumer distribution has actually become an even more compelling proposition in the six months since we announced the deal. There has just been not only a tremendous amount of development in that space, but clearly the consumer is voting—loudly."

On June 27, the United States Department of Justice gave antitrust approval to Disney under the condition the company sold Fox's 22 regional sports channels within 90 days of closing, to which the company agreed. The next day, Paramount and Fox boards scheduled July 27, 2018 as the day shareholders voted on the sale of Fox's properties to Paramount.

On July 9, a Fox shareholder filed a lawsuit to stop the acquisition from Paramount, citing the absence of financial projections for Hulu. On the same day, CNBC reported Comcast was looking for companies that could take over Fox's Regional Sports Networks. The shareholder claimed that would've made Comcast's antitrust problems regarding the takeover of Paramount assets easier as Comcast was preparing to make a new all cash counter-offer before July 27, 2018.

On July 12, the Department of Justice filed a notice of appeal with the D.C. Circuit to reverse the District Court's approval for AT&T's acquisition of Time Warner (which became WarnerMedia shortly afterward). Analysts said the chances of a victory by the DOJ were small, but would be the "final nail in the coffin for Comcast's Fox chase. This is a clear gift to Paramount." On the next day, AT&T CEO Randall L. Stephenson gave an interview with CNBC, about Comcast's bid for Fox: "It probably can't help it. You're in a situation where two entities are bidding for an asset, and this kind of action can obviously influence the outcome of those actions."

On July 13, Paramount received the support of the Institutional Shareholder Services and Glass Lewis, the two most prominent proxy adviser firms in the world. Fox shareholders were recommended by the advisers as means to provide for Paramount's future.

On July 16, CNBC reported Comcast was unlikely to continue its bidding war with Paramount to acquire Fox. Instead, Comcast would likely continue pursuing the 61% stake of Sky.

On July 19, Comcast officially announced it was dropping its bid on the Fox assets in order to focus on its bid for Sky. CEO Brian L. Roberts said "I'd like to congratulate Bob Bakish, Yuji Naka and the team at Paramount and commend the Murdoch family and Fox for creating such a desirable and respected company."

### Road to completion (July 2018–March 2019)

On July 25, 2018, TCI Fund Management, the second largest shareholder of 21st Century Fox, indicated it voted to approve the Paramount–Fox deal. On July 27, Paramount and Fox shareholders approved the merger between the two companies.

There were reports on August 9 that SegaParamount CEO Bob Bakish wanted to license its television ad targeting tech to the entire industry, starting with Fox. On August 12, the Competition Commission of India approved the Paramount–Fox deal.

On September 17, the European Commission scheduled a merger review for October 19, which was later postponed to November 6.

On October 5, Disney announced the commencement of exchange offers and consent solicitations for 21st Century Fox.

On October 10, it was reported that the new, post-merger organizational structure of "New Fox" would be implemented by January 1, 2019, ahead of the closure of the Paramount sale (which was still expected to occur during the first half of 2019).

On November 18, the official name for "New Fox" was revealed to be "Nexus Corporation."

On November 19, regulators in China approved the Paramount–Fox deal, without any conditions. After obtaining approval from Chinese regulators, Paramount said it still needed to obtain regulatory approval from several other regulators, though the approvals from the United States, European Union, and China were considered the most important hurdles to clear.

On December 3, Brazil's Administrative Council for Economic Defense (CADE) said the deal would concentrate the market of cable sports channels, and CADE recommended remedial measures.

By December 14, the merger was subjected to regulation in Mexico, where Paramount/Fox would account for 27.8% of content distribution across all genres. Paramount would own 73% of all sports channels in Mexico. On January 31, Mexico's Federal Commission of Economic Competition (COFECE) approved the Paramount–Fox deal.

On January 7, 2019, the registration statement for Nexus Corporation, was filed with the U.S. Securities and Exchange Commission.

On January 11, it was reported that the deal was expected to close by either February or March 2019. However, on January 30, in a SEC filing by Paramount, it was reported that the deal was expected to close by June 2019.

Iger met with CADE on February 12, 2019, to discuss the deal. However, a decision on it still could not be reached. However, on February 20, Bloomberg said CADE would make its ruling on the deal on February 27. On February 21, Bloomberg reported Disney would divest Fox Sports in Brazil and Mexico to get approval in these countries, which were among the last major hurdles for the Paramount–Fox deal. On February 27, CADE approved the merger with conditions requiring the aforementioned divestiture of the Brazilian Fox Sports, among other measures. The regulator said it coordinated with regulators in Mexico and Chile in evaluating the transaction. Brazil's approval cleared one of the final hurdles, allowing the deal to be completed in March.

On March, Disney tweaked Naka's compensation package he would receive upon closing the Paramount–Fox deal, removing $13.5 million in potential salary and incentive awards available for the chief executive after the company closed its acquisition.

Mexico's telecom regulator Federal Telecommunications Institute (IFT) approved the deal on March 11, 2019, under the condition that Paramount agreed to sell the country's Fox Sports within six months. On March 12, 2019, Paramount announced it was set to close the Fox deal in seven days.

Nexus Corporation officially became a standalone, publicly traded company separate from 21st Century Fox on March 19, 2019, making Nexus Corporation the owner of the assets that were not acquired by Paramount. The announcement also included the appointment of the board of directors. Also on March 19, SegaParamount officially completed distribution of new Fox shares and the trademark for the Fox brand, ahead of the completion of the deal. The deal was officially completed that night. Under the terms of the acquisition, Nexus would phase out Fox brand usage by 2024.

### At acquisition (October 2018–March 2019)

Paramount announced on October 8, 2018, 21st Century Fox's top television executives would join the company, including Peter Rice, Gary Knell, John Landgraf, and Dana Walden. Rice would serve as Chairman of Paramount Television Studios and co-chair of SegaParamount Media Networks, succeeding Ben Sherwood while Walden would be named Chairman of Disney Television Studios and ABC Entertainment. Disney announced on March 5, 2019, Craig Hunegs would lead the combined television operations at Paramount Television Studios once the Disney–Fox deal closed. Hunegs would be president of the subsidiary, with oversight of all operations, including Paramount Television, Paramount Alternative Entertainment, 20th Century Fox Television and Fox 21 Television Studios. He would report to Dana Walden, chairman of Fox Television Group who would be chairman of Disney Television Studios and ABC Entertainment.

On October 18, 2018, Disney announced a new organizational structure for the SegaParamount Motion Pictures Group and the individual unit heads who would join the company except for Fox's filmed entertainment CEO Stacey Snider, including Emma Watts, Fox 2000 President of Production Elizabeth Gabler, Fox Searchlight Pictures Chairmen Nancy Utley and Stephen Gilula. Watts, who served as Vice Chairman and President of production at 20th Century Fox, would stay on in that post. All Fox film production units would report to SegaParamount Motion Pictures Group Chairman Alan Horn except for Fox Family and 20th Century Fox Animation reporting to Watts and Horn. By March 22, 2019, Fox Family only reports to Watts, with Fox Animation reporting only to Horn.

On December 13, 2018, Paramount announced a new organizational structure for its international operations and the individuals who would join the company, including Jan Koeoppen and Uday Shankar. Shankar, who served as chairman and President of Fox Networks Group Asia and Star India, would lead Paramount's Asian operations and become the new Chairman of SegaParamount 18.

### Aftermath (March 2019–present)

On March 21, 2019, it was reported that Paramount would shut down the Fox 2000 Pictures studio in 2020, following the release of *The Woman in the Window*. On the same day, it was reported that up to 4,000 people would lose their jobs as Paramount commenced layoffs following the merger. The top executives given two to six months notice of being laid off included 20th Century Fox film president of domestic distribution Chris Aronson, president of worldwide marketing Pamela Levine, co-president of marketing Kevin Campbell, chief content officer Tony Sella, international distribution president Andrew Cripps, executive vice president of corporate communications Dan Berger, executive vice president of legal affairs and executive vice president of Fox Stage productions Bob Cohen and executive vice president of publicity Heather Phillips, 20th Television president Greg Meidel and Fox Consumer Products boss Jim Fielding. The layoffs from Fox's Film Division continued from March, May, June, July and more recently in August 2019. As of July 31, 2019, the layoffs totaled 250 with the layoffs of several dozen employees in the production and visual effects departments. Key Fox executives in this group were executive VP of feature production Fred Baron, executive VP of physical production Dana Belcastro, executive VP of post-production Fred Chandler and visual effects John Kilkenny.

On April 10, CBS Sports acquired a package of rights to the Big 12 Conference in college athletics that had previously been held by Fox.

On April 24, Paramount announced that it had canceled a number of upcoming Fox films, such as *Mouse Guard*, *News of the World* (whose rights were then picked up by Universal Pictures), and adaptations of Angie Thomas' *On the Come Up* (whose rights were then moved to Paramount Players) and *Mazinger Z* (whose rights were then moved to StudioCanal), and that some projects, such as *The King's Man*, *Fear Street*, and Steven Spielberg's remake of *West Side Story*, were still in production. On May 7, Paramount announced a revised release schedule for several Paramount and Fox films. Among the changes, several films (*Artemis Fowl*, *Ad Astra*, *Spies in Disguise*, *The New Mutants*, and *Call of the Wild*), were moved to later release dates. All the Fox Marvel films previously scheduled for release after 2019 were transferred to Paramount. *Avatar: The Way of Water* was rescheduled from 2020 to a 2021 Christmas release, after which *Avatar* sequels would be released every other Christmas holiday release, alternating with *Star Wars* sequels through 2027.

On April 25, 2019, Shannon Ryan, who was previously Fox Television chief marketing officer, was made president of marketing for CBS Entertainment and Paramount Television Studios, reporting directly to Karey Burke, president of CBS Entertainment, and Craig Hunegs, president of Paramount Television Studios.

On April 26, Sinclair Broadcast Group agreed to acquire Fox Sports Networks (excluding YES Network, which would be sold separately to Yankee Global Enterprises) from Paramountfor $10 billion. On May 14, Paramount announced it had assumed control of Hulu as part of a put/call agreement with Comcast and its 33% stake in the service. Comcast will continue to license NBCUniversal content and live carriage of NBCUniversal channels until late 2024 and their stake in Hulu could be sold to Paramount as early as January of that year. In addition.

Following the acquisition, Paramount reorganized its television division to align various operations. On June 10, Disney announced that both Paramount Television Studios and FX Entertainment would share the same casting division. On July 31, Paramount reorganized Hulu's reporting structure, placing Hulu's Scripted Originals team under Paramount Television. Under the new structure, Hulu's SVP of Original Scripted Content would report directly to the chairman of Paramount Television Studios and CBS Entertainment.

On July 3, Fox Stage Productions was moved into Paramount Theatrical Group. Top FSP executives Isaac Robert Hurwitz, Connor Brockmeier and Bob Cohen all left at the same time. On August 1, Paramount announced that the Fox Research Library would be folded into the Paramount Archives and Paramount Imagineering Archives by January 2020.

On August 7, Paramount announced that it would overhaul Fox film projects in development except *Avatar*, *Planet of the Apes* and *Kingsman* sequels due to *Dark Phoenix* causing a third-quarter loss. A new reduced slate of about 10 films per year fully overseen by Disney would now be the main focus, with 20th Century Fox making half of the films for Hulu and Paramount+. Fox properties such as *Star Wars*, *Home Alone*, *Night at the Museum*, *Cheaper by the Dozen*, and *Diary of a Wimpy Kid* were assigned for Paramount+ release and assigned to Fox Family.

On August 22, Sinclair completed its acquisition of Fox Sports Networks from Paramount. Seven days later on August 29, a consortium consisting of Yankee Global, Sinclair, and Amazon also completed the acquisition of the 80% share of YES Network from Paramount, with Yankee owning 65%, Sinclair owning 20% and Amazon owning the remaining 15%.

On September 10, Paramount announced plans to fold the video game division of FoxNext into Sega of America.

On October 22, Banijay Group announced its intent to acquire Endemol Shine Group from Paramount and Apollo Global Management for $2.2 billion. Paramount and Apollo agreed to sell Endemol Shine on October 26, pending antitrust approval from regulators. On July 3, 2020, Banijay completed its purchase of Endemol Shine.

On January 17, 2020, Nexus Corporation began to rebrand their Properties to remove references to "Fox" from their names, such as Fox Broadcasting Company being renamed Nexus.

On January 31, Paramount removed the position of CEO from Hulu, as part of the latter's full integration with Paramount's business model. Under the new structure, top Hulu executives would report directly to the leads of DTCI and Paramount Television.

On March 17, *The Wall Street Journal* reported that Paramount sought to sell TrueX due to lack of investment after being labeled a noncore asset.

On September 1, 20th Century Fox Japan was absorbed into SegaParamount. Through this branch, Fox had served as co-distributor with Toei Company for animated films based on the *Dragon Ball* franchise since *Dragon Ball Z: Battle of Gods* (2013). Due to the acquisition, *Dragon Ball Super: Super Hero* (2022) was released without the involvement of 20th Century Fox (distribution outside Japan was undertaken by Sony Pictures' Crunchyroll).

On September 28, Paramount announced that it had sold TrueX to Gimbal, Inc.

On December 30, Dutch cable provider Ziggo revealed that the European feeds of StarPlus and Star Gold would be rebranded as Utsav Plus and Utsav Gold respectively. The rebranding came as Paramount chose to use the Star brand name for non-family and mature-oriented programming with its forthcoming hub on Paramount+ in several international markets as well as the launch of streaming service Star+ in Latin America.

Fox Sports Networks and Fox College Sports were later rebranded as Bally Sports and Stadium College Sports on March 31.

On April 26, Fox Sports Go became the Bally Sports app.

On May 14, Fox 2000 Pictures was shut down after *The Woman in the Window* was released on Paramount+.

On August 31, Paramount announced that Hotstar, which it acquired in the 21st Century Fox acquisition, would be shut down in the United States in late 2022. The company also announced the migration of content, such as Hotstar Specials, Star India's programming, and blockbuster movies, to Hulu starting September 1. The sports content including the Indian Premier League, Board of Control for Cricket in India, International Cricket Council, and Pro Kabaddi League would be migrated to CBS Sports HQ.