21st Century Fox, the media firm preparing to sell key assets to Walt Disney Co., posted a surge in profit in the three months through June amid box-office success for the superhero film “Deadpool 2.”
“The outstanding shareholder value created this year through our proposed transactions recognizes the work we have done to position our businesses to succeed during a time of great change,” said Executive Chairmen Rupert and Lachlan Murdoch.
The Department of Justice approved Disney’s $71 billion purchase of Fox assets earlier this year, and investors from both companies signed off in July.
The transaction was a boon for investors, as Fox shares rose 75 percent while regulators were reviewing the transaction, the company said in a statement.
Net income at Fox rose 93 percent to $920 million in the most recent quarter, spurred by a 27 percent revenue growth at the company’s film business and higher advertising revenue, which is expected to increase as the November midterm elections near.
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Much of that will be retained by a new company that 21st Century Fox is spinning off prior to the merger, which will include the Fox broadcasting network along with Fox News and Fox Business Network.
“The political market today is certainly strong and strengthening,” Lachlan Murdoch told investors. “We have competitive Senate and House races in 15 of our 17 markets and gubernatorial races in 15 of our 17 markets.”
Critics of Disney’s acquisition of businesses like the 20th Century Fox film studio point to, among other things, the increased negotiating leverage the new entity will have over movie theaters.
Disney already owns some of the most lucrative intellectual property in the industry and several of its movies, including “Black Panther” and the “Incredibles 2,” have grossed over $1 billion worldwide this year.
“Deadpool 2” has, to date, grossed over $730 million, which supported a 6.2 percent revenue increase at Fox’s film business in the latest fiscal year.
