Disney’s asset acquisition deal with the 21st Century Fox will cost thousands of jobs in the merger of two media giants will result in major overlap in film and TV studios and sports business.
There are speculation that the merger of the 21st Century Fox assets with the Walt Disney Studio broadcast business will cause an estimated 5,000 layoffs – 2,300 in the 21st Century Fox team and 1,700 in the Disney team – in the US alone.
After Comcast has withdrawn its bid, the he Disney-Fox deal is all but done but for regulatory approvals. The exchange of properties will also lead to reshuffle and replacements of the top leadership, which are bound to overlap with combining of the assets.
Reports in the US media have quoted analyst Rich Greenfield as saying: “Disney expects over $2 billion in synergies from the Fox acquisition, with the overwhelming majority of that from cost savings, which mean job cuts. In order to reduce costs by upwards of $2 billion, we believe Disney will need to cut well over 5,000 jobs and the number could easily swell toward 10,000 given the high degree of overlap between the two companies around the world.”
US news website deadline.com has reported that 21st Century Fox president Peter Rice is being considered to lead the TV content business of the combined company. He currently serves as CEO of Fox Networks Group.
Disney will also get a minority stake in Sky via 21st Century Fox, which is in a bidding war with Comcast for a controlling interest in the satcaster, including Sky News.
The Walt Disney acquisition of Star assets, which among other assets will also witness transfer of sports properties in India, will also be affecting the Star Sports and its subsidiaries structuring in the country. A impact is bound to be there. What and how much? That remains to be seen.
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