At precisely 12:02 A.M. on Wednesday morning, the $71.3 billion mega-merger between Disney and 21st Century Fox—a deal over a year in the making—finally became official. For Disney, this means a trove of new assets, including the 20th Century Fox film and TV studios, an additional 30% stake in Hulu, cable channels FX and National Geographic, and Indian media conglomerate Star India. For Fox, it means a new company, Fox Corporation, which includes Fox News channel and Fox’s broadcast network.
But what does it all mean for Rupert Murdoch, the billionaire media mogul who founded 21st Century Fox and ran it (and its predecessor, News Corporation) for 39 years? Murdoch, who is co-chairman of the new Fox Corp., had an estimated fortune of about $18.4 billion as of noon Wednesday, just about 12 hours after the deal was official. That’s about $4.3 billion more than he was worth on December 13, 2017, the day before Fox and Disney first announced the deal..
Until early Wednesday morning, the biggest chunk of Murdoch’s fortune was his stake in 21st Century Fox. His 17% stake in the company was worth about $13.3 billion at its peak earlier this month. Now that holding has been split into shares of Disney and Fox Corp. On Tuesday, he got one third of a share of Fox Corp. for each share of 21st Century Fox he owned. In addition, Murdoch had the option of swapping his 21st Century Fox shares into either a portion of a Disney share (trading at $107 a share) or $51.57 cash per share. Forbes calculated Murdoch’s fortune Wednesday assuming he elected to take Disney shares rather than cash. (Filings with the SEC expected at a later date should provide more detail on Murdoch’s holdings.)
Assuming he took all stock from the Disney deal, Murdoch now owns $10.5 billion worth of Disney stock. His 39% stake of the new Fox Corporation is worth $4.2 billion. and the rest of his next worth is made up of his shares in News Corp., which owns the Wall Street Journal, New York Post and the Times of London; he also owns real estate, art and other investments.
While Murdoch may have lost power as an executive—he will have no official position at Disney—he came out on top when it comes to his fortune. Analysts only expect it to get better for him.
“We see New Fox as well-positioned among traditional media networks due to its strategic focus on sports and news with minimal exposure to entertainment,” John Hodulik, Charlie Costanzo and Batya Levi, analysts at UBS, wrote in a recent research note. They believe Fox News, the golden goose of Fox Corp., will be able to grow revenue and improve its profit and Ebitda margins, citing the upcoming 2020 election as built in growth for the network. The consensus of analysts polled by Yahoo Finance gives the new company a “buy” recommendation overall.
Disney, which now owns movie studios Marvel, Pixar, LucasFilm and a new host of Fox programs and intellectual property (including the Simpsons, X-Files and Deadpool), is primed to become an even bigger player in Hollywood. The new intellectual property could help the giant expand its revenue from theme parks, merchandise, movie tickets and more. And it could also help fuel Disney’s forthcoming family-oriented streaming service, which the company hopes will rival Netflix and become a major player in the world of on-demand entertainment.