The Walt Disney Co. confirmed that it agreed to buy Fox Family Worldwide
Inc., including Fox Family Channel, for $3 billion in cash and $2.3 billion in
assumed debt from News Corp. and Haim Saban.
The agreement was first reached at investment banker Herb Allen's media
conference in Sun Valley, Idaho, at a meeting that included News Corp. chairman
Rupert Murdoch and Saban, Disney chairman Michael Eisner told reporters and
analysts during a conference call Monday.
The 81 million-subscriber Fox Family will be renamed ABC Family, and it will
draw programming from the ABC broadcast network, as well as from other
Disney-owned cable services and Saban's library of kids' shows, which is also
part of the deal.
Disney is also buying 76 percent of Fox Kids Europe, which reaches 24 million
subscribers in Europe and which will 'eventually' carry a Disney brand.
Disney hopes to close the deal in three to four months, subject to domestic
and international antitrust approvals.
Disney officials see much upside from Fox Family's current full-day 0.13
rating among the 18-through-49 demographic, compared with the 0.5 generated by
other general-entertainment networks such as USA Network, TBS Superstation and
Turner Network Television.
Disney said it expects to quickly cut annual costs by about $50 million
through such actions as consolidating ad-sales and affiliate-marketing
operations. For example, Disney's integrated ad-sales unit, ABC Unlimited, would
'support' ABC Family.
Disney said it expects by 2003 to be able to boost ad sales by at least $100
million over the $200 million rung up in fiscal-year 2001.
The programmer added that it would continue to air The700 Club
and other programs supplied by Pat Robertson's Christian Broadcast Network,
which sold The Family Channel to News and Saban in 1997 for $1.9 billion. 'We
happen to think he's an asset to the channel,' Eisner said on the call.
Disney also gets rights to Major League Baseball games two nights per week
during the regular season, as well as eight to 11 first-round playoff games.
Those games will remain on Fox Family, but they will be produced by ESPN and be
'The regular-season games are nice, but
the postseason games that will be on [Fox] Family Channel are exclusive to the channel,' Disney co-president and chief operating
officer Robert Iger said.
Potential shows that could be repurposed onto ABC Family include Good
Morning America, The View and former Friday-night family block 'TGIF.'
Disney will also add new originals and maintain current shows.
'We'll be moving aggressively in not only programming,
but promotion,' Eisner said.
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