As news emerges with clarity around the specifics of a transaction involving Fox and Disney, we highlight in this note a range of considerations we have contemplated in association with the expected deal over the past several weeks.
In this note we review the following considerations related to a potential transaction between Disney and Fox including:
Further details around these issues follow in the remainder of this report.
VALUATION. We value companies on a DCF basis. Key variables driving valuations across the agency holding companies include long-term costs of capital ranging from 11.5% for Disney to 13.0% for Viacom, with other companies in the peer group at 12.0% to 9.7% for Disney. Long-term growth rates range from 3.5% for Viacom to 5.0% for Disney.
RISKS. Risks to companies in the sector include the hit-driven nature of video production, threats to TV advertising and a pay TV slowdown.
FULL REPORT INCLUDING RISKS AND DISCLOSURES CAN BE FOUND HERE: FOX-DIS 12-13-17.pdf
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