21st Century Fox Incurs Record 1Q18 Operating Expenses- Sale of Assets to Cope?

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During fiscal 1Q18, 21st Century Fox (NASDAQ:FOX) incurred higher operating expenses than that of in fiscal 1Q17. The total number? Higher than $5.7 billion. Further, marketing and sales spending also rose.

Fox is speculated to be in the process of selling a portion of its entertainment business, including its film and television production studio. So far, the interested buyers include Walt Disney (NASDAQ:DIS), Comcast (NASDAQ:CMCSA), and Verizon (NASDAQ:VZ).

Such sale of a large portion of the entertainment business could render Fox a much leaner company capable of executing faster response rate to the threat of cord-cutting.

Traditional pay-TV companies have been rattled by the cord-cutting trend, as households are foregoing conventional pay-TV packages in favor of video streaming services delivered over the Internet, or over-the-top (OTT) video content.

In 3Q17, AT&T (NASDAQ:T), Dish Network (NASDAQ:DISH), and Charter Communications (NASDAQ:CHTR) shed 385,000, 129,00, and 104,000 pay-TV subscribers, respectively.

Hence, a sale of assets could assist Fox in raising funds to repay its outstanding debt. The company was carrying a total debt of $19.8 billion on its balance sheet at the end of fiscal 1Q18. It posted total debt of $19.9 billion at the end of fiscal 1Q17.

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