15/12/2017 BBC Business Live

This is Business Live from BBC News

with Alice Baxter and David Eades.

The end of an empire -

Rupert Murdoch's Fox

sells its entertainment business

to Disney in a 52 billion dollar

deal Live from London,

that's our top story on Friday

the 15th of December.

A long-rumoured deal for Disney

to acquire the bulk of 21st century

Fox's assets becomes reality.

We'll discuss what this sharp shift

means for this man Rupert Murdoch,

Hello.

This is Breakfast, with

Charlie Stayt and Naga Munchetty.

First, our main story.

Brexit negotiations will reach a key

milestone today when EU leaders

Also in the programme can

the stellar bull market of 2017

continue into the end of the year?

We'll discuss the likelihood

of a Santa Rally.

And keeping a close eye on markets

where the festive cheer

seems somewhat lacking

from the traditional Santa Rally

we're used to seeing in December

with global stocks in downbeat mood.

And we'll be getting

the inside track on all the big

stories of the week with our

economics editor Kamal Ahmed

who will talk us through the latest

rise in US interest rates and how

Brexit talks are

moving towards trade.

Just use the hashtag BBCBizLive.

Is it right that banks are reining

in their spending?

Hello and welcome to Business Live.

We start with one of

the biggest deals the media

industry has ever seen.

The Walt Disney company has agreed

to buy the entertainment business

of Rupert Murdoch's Twenty-First

Century Fox.

The deal is worth a whopping

$52.4 billion in shares.

Disney's already the world's top

entertainment company -

this will give it an even bigger

arsenal of movies and shows

in its battles with online

streaming services like

Netflix and Amazon.

The purchase includes

the pan-European pay TV operator Sky

which reaches 23m homes in five

countries as well as Fox's film

and television studios.

The deal will see Rupert Murdoch

and his family as well as other Fox

shareholders take a 25% stake

in the larger Disney thanks

to more than half a billion

new shares being issued.

Our business correspondent

Theo Leggett joins us.

Let's start with the wine? What is

in for both them? -- let's start

with why this is happening.

It wants

to get its hands on the 21st century

Fox back catalogue of movies, some

of the entertainment assets. It

becomes a bigger entertainment

company and has more scale. For the

Fox side of the equation, it is an

acknowledgement that the media

market is changing. Fox goes back to

what it knows best, concentrating on

assets where there is a market for

live broadcast television, sports

and news. In other areas of

entertainment, people prefer to get

their television and films on

demand. It is a competitive market,

so Fox seems to have taken a

decision that doesn't want to become

embroiled in that very competitive

content supply market. It would

prefer to concentrate on the true

broadcast assets of news sport.

It

is not often that you see Rupert

Murdoch take a step back. Is this a

reflection of the fact that he's 86

and it is maybe not time to keep

acquiring and acquiring.

It looks

like a pragmatic business decision.

The murders have decided that they

cannot continue doing the two

pronged approach of entertainment

and news. As you say, he is 86, and

maybe he is taking a little step

back. -- the Murdochs. There is an

element of that. Also, it seems to

be abandoning the element of the

elastic planning, having a huge

empire that would be passed under

the control of the Murdoch children.

It is all change. It does seem that

the kind of dynastic situation we

had with Murdoch assets may not

happen now.

It is not a done deal

yet?

No, it needs to be cleared by

competition regulators. If they put

a spanner in the works, which they

might - large media deals have been

vetoed or changed in the past - it

would cost a lot of money.

Thank

you, Theo.

Let's take a look at some of

the other stories making the news.

Ryanair, the world's fifth biggest

airline by passenger numbers, says

it will recognise pilot unions for

the first time since it was founded

32 years ago. The airline says it

hopes it. Pilots holding a strike

that was scheduled for later today

over pay and conditions. Earlier

this year, Ryanair had to cancel

20,000 flights after messing up the

league schedule for pilots.

Britain's most senior military

officer has warned that vital

communication cables that run along

the seabed could be at risk

of being cut by the Russian navy.

During a speech in London Sir

Stuart Peach warned that

could have a potentially

'catastrophic' effect

on international trade

and the British economy.

Is

Good morning.

European Union leaders are expected

to give formal approval today

for the Brexit negotiations to move

on to the next stage

at their summit in Brussels.

They will cover the future

relationship once the UK leaves.

Meanwhile the head of

the British Chambers

of Commerce Adam Marshall has told

the BBC that the focus for business

remains on what the outcome

of the while process will be ,

as they want certainty over

their future trading relationships.

Japan has increased the number of

entities in the asset freeze

sanctions against North Korea. We

can get the latest from Monica

Miller, who is in Singapore.

Monica...

They have added 19

additional North Korean companies to

that list. This brings the total to

56 organisations and 62 individuals.

The businesses include banks, and

other businesses. It comes after

repeated threats from Pyongyang's

missile programme. A Japanese

official earlier today said there is

a lack of progress on important

issues. The companies have been

subject to US sanctions which went

into effect last January, and this

move is timed to coincide with a

meeting on the nuclear programme

that will be chaired in New York

later today.

Let's stay in the region where Asian

shares have erased some earlier

modest gains on Friday

with sentiment dented

by Wall Street's weakness

on concerns about the progress

Is

of US tax reform.

On Thursday all major US stock

indexes fell with the S&P 500 down

the most in a month.

And the ripple out effect of that

drop in stocks was felt in Asia

where Chinese shares slumped,

and Japan's Nikkei stock index

finished 0.6% lower -

that's its lowest in more

than a week - with mobile firms

extending a sell-off.

The index is down 1.1% for the week.

Meanwhile here in Europe stocks

are continuing the downbeat trend

with all major stocks opening

in the red.

And Samira has the details about

what's ahead on Wall Street Today.

All eyes will continue

to focus on Washington

and the Republican tax plan.

On Wednesday, the House

and Senate Republican leaders said

they had reached an agreement

on a merged version

of their tax bill.

Republicans plan to unveil

the final bill on Friday,

with the aim of voting

on the legislation early next week

and delivering it to President Trump

for signing before Christmas.

Also happening on Friday,

the Federal Reserve's report

on industrial production is likely

to show a gain of 0.3% in November,

after surging 0.9% the prior month.

Joining us is Lawrence Gosling,

editor-in-chief of Investment Week.

good morning to you. Let's talk

about what's happening on the market

at the moment, because traditionally

at this time of year, we used to

seeing something called a Santa

rally. What is that?

In the run-up

to Christmas, a lot of the major

stock markets bounce quite strongly.

It's about 2.5% on average. 18 out

of the last 25 years, the FTSE has

gone up over this period.

Had it

gone humbug this year?

It is like

the snow in London, it seems to be

melting away in the last few days.

It is profit-taking, actually.

Investors have had a good year and

for many of them it is surprising

how strong the markets have been, so

they are taking money off the table.

Is it as simple as that? They are

profit taking now, but how long can

this last? We will head into January

and things will switch round.

There

is an undercurrent of nervousness in

the market. Because it has been very

good this year, and you look at

forecasts for 2018, people are

thinking that it can't be as good as

this again. It is partly

profit-taking, partly get back a

little bit of cash in case the New

Year starts in a rocky way.

The Dow

Jones is up 24% since the start of

the year. An analyst that you were

talking to earlier in the day,

David, was saying that he did see a

burly imminent correction in the

States, but he felt that -- a fairly

imminent correction.

In Europe it is

probably stronger than in the US,

but it is because the US has risen

so strongly. Some of the big tech

companies still have a way to go.

On

tax reforms in the States, how many

times have we been waiting for the

blockage to be cleared? That clearly

is also frightening number of

people, isn't it? And that across

the piece, across the globe.

People

are beginning to crunch the numbers

and see that actually a lot of this

cash may come back to the US, allow

the

but a lot of US companies might

be worse off than they currently are

under the proposals, which makes

people nervous. Thank you for that,

Lawrence. We will talk later about

Christmas party and other things.

Still to come...

Our economics editor Kamal Ahmed

will talk us through all the big

stories of the week including

the increase in US interest rates.

You're with Business

Live from BBC News.

Rupert Murdoch's Sky TV channel

appears to have made

peace with its rival,

the telecoms giant BT.

It has spent billions in recent

years buying Premier League

and Champions League football rights

to compete with Sky.

Now the companies say

they have signed a deal

to supply their most popular

channels to each other's platforms.

So BT customers will be able to get

Sky sports and its US drama shows,

and BT will make its sports channels

available to Sky

satellite customers.

The deal is expected

to start in 2019.

Michael Hewson is a Senior Market

Analyst at CMC Markets Michael,

how significant is this deal?

Interesting timing, given the Disney

acquisition of Sky, and it looks

like a better deal for BT than four

Sky, given that ultimately, BT will

get much more content in return. I

can't help thinking there was

something wider at play here. Early

next year, the Premier League and

Champions League rights come up for

auction, and BT and sky tend to go

head-to-head. I think these

particular rights could gain the

attention of companies like Amazon

and potentially Netflix, and I think

there is a concern that maybe, in

going head-to-head with each other,

they could artificially drive the

price higher than it needs to be.

And I think maybe there is a tacit

acceptance between the two that if

they cross sell each other's

content, the price may not go so

high.

I subscribe to Sky but not to

BT, and I was thinking, this is

great news, but it is not until

2019, is it?

Indeed, and that is

partially one of the reasons why

they have waited until then. The

Premier League and Champions League

rights come up for renewal in 2018,

the early part of next year, body

2018-19 season. For me, this makes

sense, because football is not cheap

and it has come away from

terrestrial TV. I think there needs

to be an acceptance that if you

drive the price too high, you drive

the audience away.

Michael, really

good to talk to you. Michael Hewson

from CMC markets.

Just looking at what is happening on

our business like page. We have a

story running about person in

executive, one of

-- Persimmon executives being fired.

You're watching Business Live.

Our top story:

It's the end of an empire -

Rupert Murdoch's Fox

sells its entertainment business

to Disney, in a $52 billion deal.

Disney takes home the 20th

Century Fox movie and TV studio,

21st Century Fox's cable

channels and more.

While Fox keeps Fox broadcast

network, the local TV stations it

owns and a few other pieces.

A quick look at how

markets are faring.

After our long discussion about the

rally that normally happens this

time of year. A strengthening pound

and the FTSE currently just opening

in the red slightly, downbeat in

Frankfurt and Paris. Taking a cue

from what we saw in Asia and Wall

Street overnight.

And now let's get the inside track

on all the big economics

stories of the week.

One that's being felt around

the world is the increase

in US interest rates.

There's also been more

Brexit machinations.

When isn't there? Our economics

editor is here. We will. To wit the

big deal, 52 billion. It is a huge

sum of money. Who do you think

stands to benefit most from this?

Both share prices went up yesterday

on both sides of this deal. Rupert

Murdoch, it is back to basics. News

and sport in America. Maybe not

quite enough room now for Lachlan

and James to have a bit of that

business so maybe James Murdoch is

now flirting with what he might do

with Disney. But the big corporates

story is Disney. Disney have really

looked at bulking up. Bob Eiger was

in London earlier this week for the

premiere of the new Star Wars movie,

sat next to Prince William and

Prince Harry and he must have

thought, I bought Lucas films a few

years ago for $4 billion, look at

the franchise I have got now. He has

now made in much bigger bet with Fox

Movies and Disney has decided

clearly that Hollywood content

dominance is the most important part

of their business. But he has a huge

fight on his hands with the big new

social media providers, Facebook and

Netflix with direct streaming,

Amazon itself. And Netflix and

Amazon are not in profit mode at the

moment, Disney shareholders want

profit. Even though Disney has made

this huge deal, he has got some

really serious competitors.

Let's

talk about what happened in the

States this week. A major event. The

fifth interest rate hike that we

have seen since the financial

crisis. Probably the last of Jeannot

yell and's tenure, what are the

ramifications?

The big story is

global. It is about global growth.

She said it is the first time since

the financial crisis we have seen

synchronised growth in America,

across the lot of Europe and in

Asia. And there is some motion that

might lead to the slightly

overheating economies. And that was

the third interest rate rise of this

year. That the Fed has put in place.

Interest rates still pretty low by

historic standards, but the

suggestion is there will be three

more next year. It is a signal, with

the big fiscal stimulus possibly

coming to the American economy with

the Trump tax plans, but still quite

low inflation, but it shows the

American economy has reached that

escape philosophy and is starting to

grow. But the global story is global

growth, we are in pretty good

territory at the moment on that.

A

question about Brexit. It has been

an extraordinary week from Theresa

May getting a deal, moving to later

today we will get clearance, the

green light for transition and trade

talks. But even in the last few

minutes, I noticed that the

Commission President Jean

Claude-Juncker making it clear it is

going to get tougher yet.

It is

going to get tougher and we are now

likely to move into discussions

about the implementation phase, what

does Britain do between getting a

free trade deal if Britain does get

that and leaving the European Union

in 2019? Jean Claude-Juncker has

said things will get tougher. When

things get tougher for both sites.

In the trade negotiations, the EU 27

will have different priorities, with

new Poland, France or Germany,

Sweden, they have their own issues.

I think the British and believes if

you can get into the trade

negotiations, the EU 27 unity we saw

drawing withdrawal may be something

else.

Looking after their own

interests could be harder. Thank you

very much indeed.

Many thanks.

The Last Jedi - the latest

instalment in the Star Wars

saga opens in theatres

worldwide this weekend.

It's already projected to be

the highest grossing movie of 2017.

The Star Wars franchise has been

around for 40 years,

reaping in more than $30 billion

in sales from merchandise

and corporate tie-ups.

How will the last Jedi boost

the Star Wars economy?

Our business reporter, Tim McDonald,

is at an installation

along Singapore's most

famous shopping district.

Well, behind me is

the next Wing Fighter.

It's been a fixture of Star Wars

since the very first movie.

It's part of a big installation

here on Orchard Road, which is

Singapore's prime shopping district.

And it really does give you a sense

of the reach - culturally

and business-wise - of the Star Wars

franchise.

After all, it's a week and a half

out from Christmas and we

don't hear any Christmas carols

here, it's Star Wars music.

Why have you stolen Christmas?

Well, the new Star Wars

film is expected to take

in something like $400

million at the box office

on the first weekend alone.

Now, that would make

any studio happy.

But when it comes to business,

that's just the tip of

the iceberg.

Star Wars content is expected

to feature heavily in

Disney's new streaming

service, which is expected

to go online in 2019

and

go toe to toe with the existing big

players, Netflix and Amazon Prime.

And in addition to that, there's

always the merchandising, which has

always been a very big slice

of the Star Wars business.

Now, we can see this

new Stormtrooper.

He's been updated with

a racing stripe and some

different shoulder pads.

So, that should give

the collectors plenty of

new figurines to find at the shops.

So, with all that money coming

in the door, we can expect

perhaps a few more Jedi, many more

Stormtroopers, and maybe even an

exploding Death Star or two.

Timothy McDonald,

BBC News, Singapore.

What other business

stories has the media been

taking an interest in?

Lawrence Gosling is joining

us again to discuss.

This is double-edged. Vladimir Putin

says he wants to be President again,

he has been President forever and

who would like to be forever more!

And at the same time as he is saying

that, we have got this

extraordinary, the most senior

military figure in the UK saying we

have got to look after our internet

cables, communications cables on the

sea bed, because the Russians will

be out to cut them.

Putin is at the

start of his election process and

said he would not start an arms race

again with America. And the Guardian

is reporting the student Peach, the

chief of the British defence staff,

saying it is not so much about arms

but cutting the cables that give the

connective world we live in. And if

you go back to 2013 when Russia

annexed Crimea, one of the first

things it did was cut the cable so

that part of the world was

disconnected from the West.

It is a

big statement to say they will do

it. That is essentially what he has

said.

Yes, and there is plenty of

evidence and Sir Stuart Peach taught

about this yesterday, anecdotes of

Russian boats and submarines

dangerously close to cables. Nothing

that they were doing. It does not

take too much of a week to suggest

they could be looking at how easy it

is to cut cables or intercept

messages as well which is

interesting.

And staying on Putin,

he is going to stand again, we knew

that he would, as an independent

candidate this time, what difference

that makes. How much would it shake

up markets and their view on Russia

if there was a sense of a genuine

opposition?

The Russian stock market

is one of the few that has

underperformed and lost money this

year so if Putin was to lose this

election, it would probably be seen

as positive for the Russian stock

market and potentially the economy

as well. The economy has serious

challenges, they have a declining

birth rate, it is not a large

population in the first place.

Putin

claims that is no longer a problem.

You cannot immediately turned down a

declining birth rate in which is

largely to do with the general

economic state of the country.

It

was three hours and 42 minutes.

Yes,

and that was short for him!

Let's

talk about Christmas parties, we are

getting into the season. My husband

had his yesterday and you had yours

this week.

On Wednesday night

comedians. Three Waters Gosling!

Yes, I was really living it up

because I was getting up early so

three glasses of water for me.

We

are glad to hear it. We are on the

same page. At the beginning, we

treated our viewers, asking opinions

about their views on office parties,

good idea or bad idea? We have been

inundated, I love this. I met my

wife at such a party so I vote yes.

Which is pretty great.

That could have gone either way!

You have got a couple. Yes, I love

this, bad idea, he wants to get

dressed up to party with your

co-workers and bosses you already

see too much of?

Yes, fair point.

This is important, the big parties

are generally long gone unless you

pay to go to one, now replaced with

modest Christmas lunch and a couple

of glasses of white wine.

Is that

bad? Very fair, ours was very

modest. The papers talk about the

tech companies and big media

companies having huge parties.

Rather than the financials and banks

which are reining in their spending.

In fairness to the banks, they had

been doing it since the financial

crisis, as they quite rightly

should. A taxpayer does not want

their money spent on Christmas

parties.

We have to go now for our

champagne breakfast!