Goldman Sachs tops $100m in fees from Fox-Disney deal

Payout reflects close relationship between Rupert Murdoch and top banker

Although 21st Century Fox has agreed a deal with Disney, the deal could still be gatecrashed by Comcast.  Photograph: AP

Although 21st Century Fox has agreed a deal with Disney, the deal could still be gatecrashed by Comcast. Photograph: AP

 

Goldman Sachs stands to make about $105 million (€90 million) for advising 21st Century Fox in its $71 billion asset sale to Walt Disney and for helping Rupert Murdoch finance his new broadcasting group, in one of the most lucrative deals ever for the investment bank.

A regulatory filing by the two media companies shows that Goldman received $58 million for advising 21st Century Fox since August last year, when Mr Murdoch and Disney’s chief executive Bob Iger first met in Los Angeles to consider a transaction.

That fee collected by Goldman is lower than the $120 million brought in by Morgan Stanley for advising Monsanto in its $66 billion sale to Germany’s Bayer, which was the highest ever advisory fee paid to an investment bank, according to Thomson Reuters.

But in this case Goldman will also receive about $47 million for providing a bridge loan and permanent financing to the new entity that will house the remainder of the Murdoch family broadcasting empire, including the Fox broadcast network and Fox News.

The big payout for Goldman reflects the close relationship that John Waldron, its co-head of investment banking, has established over the years with Mr Murdoch.

Mr Waldron was the closest adviser to the media tycoon during the demerger of 21st Century Fox and News Corp, its newspaper and publishing focused business, and the Murdochs’ failed attempt to buy Time Warner.

Gatecrashed

Although 21st Century Fox has agreed to sell its marquee assets to Disney, the deal could still be gatecrashed by Comcast, the US cable company led by Brian Roberts, which also bid for the assets put up for sale by Mr Murdoch.

Comcast offered to pay $65 billion for the assets earlier this month, topping the $52.4 billion price tag on Disney’s original agreement, reached in late 2017. People close to Mr Roberts said that Comcast was working on sweetening its offer to outbid Disney.

The assets put up for sale by Mr Murdoch include his film and television studios, cable entertainment networks, and a stake in internet streaming company Hulu, as well as international holdings such as Star India and a 39 per cent stake in pan-European broadcaster Sky.

It is unclear whether an extended bidding war would further fatten the advisory fees for both Goldman and Centerview, a boutique investment bank that also advised 21st Century Fox. Centerview is set to make $22 million for the advice that its top banker on the transaction, Blair Effron, provided to the company during the sale process, according to the regulatory filing on Tuesday.

JPMorgan and Guggenheim Partners, who are advised Disney in the takeover process, are estimated to make $27.5 million in fees each, according to the same filing. – Copyright The Financial Times Limited 2018