), a diversified global media company, is acquiring
The Walt Disney Company
) stake in their 16 year old Asian sports joint venture "ESPN STAR
Sports (ESS)". However, the financial terms of the deal were not
ESS, a 50/50 joint venture between Disney's ESPN and News
Corporation, provides Asian sports fans diverse collection of
sports programs across 24 countries in Asia through 28
As per the agreement, News Corporation will acquire ESPN's 50%
stake in ESS, which is subject to regulatory approvals. Until then,
ESS will be jointly managed by the two companies.
ESS with its right mix of exclusive sporting licenses with top
sporting leagues emerged as an industry leader in the pay-TV
industry. With the new deal, News Corporation will gain complete
control over ESS, which will enhance its position in sports
programming thus bringing in incremental revenues through
advertising and subscriptions.
Further, owing to a mandatory shift to a digital addressable
system in India, the move better positions both the companies to
independently manage their brands and generate positive cash flows
through significantly expanding digital opportunities in the
News Corporation strives to add diverse revenue streams to hedge
against economic volatility. The company is focusing on the
emerging markets to expand its media business, since these regions
have millions of viewers.
Further, the companies announced that Manu Sawhney, Managing
Director of ESS, will be replaced by Peter Hutton, currently SVP of
Sports for FOX International Channels (FIC).
News Corporation's significant international presence has helped
it to broaden its client base and product portfolio. Among others,
the company competes with
Time Warner Inc
Currently, we maintain a long-term 'Neutral' recommendation on
the stock. Moreover, News Corporation holds a Zacks #3 Rank, which
translates into a short-term 'Hold' rating.
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