what a deal could mean for the other chip stocks. "power lunch" starts right now i'm brian sullivan the market's moving just enough today to give your investment dollars yet another new high, thanks to the saudi news oil is moving up again data is pushing energy stocks higher chevron and exxon among the dow leaders. we talked about semiconductor companies as well. it is fair to say that lately, it rocks sox at new all-time highs. michael kors soaring, the fashion retailer beating earnings estimates and raising its outlook. more on that ahead and reports the pharmaceutical company may becoming a take-over target >> thank you very much i'm tyler mathieson. welcome to "power lunch. target gearing up for the holiday season, announcing deeper black friday discounts and plans to open 6:00 p.m. to midnight on thanksgiving day i will be asleep staying with retail, amazon cutting prices of third party products in the face of stiffer competition. and the new york fed present william dudley plans to retire mid-next year, well before his term ends. >> we start with a massive shakeup in saudi arabia over the weekend. dozens of royals arrested late saturday night in what's being called an anti-corruption crackdown. many believe it is an attempt by the new crown prince to consolidate his power, remove potential rivals to his father's throne and perhaps improve his ability to push through major economic reforms one of those arrested, principles al waleed whose kingdom holdings owns big stakes in twitter and got hit hard today on the saudi stock exchange startling chain of events doesn't end with the arrest. another senior prince died in a helicopter crash over the weekend. the interior ministry gave no reason for the crash the prime minister of lebanon unexpectedly resigned while he was visiting saudi arabia. let's get more insight into what the saudi purge means. michael ruben, middle east scholar with the american enterprise institute, good to have you here. >> thanks for having me. >> what's going on in saudi arabia >> basically, the answer is all of the above when it comes to is this about consolidating power, is this about fighting corruption look, when you do business in saudi arabia, it's all about who you know there are 15,000 princes in saudi arabia and so what the crown prince is doing is basically saying all real decisions need to come through me at the same time he's ambitious, he wants to reform the economy to modernize it, and he doesn't want to have to deal with resistance the problem is, what happens if he fails then you could see a regression in saudi arabia that leaves it far worse than where it is right now. >> they are trying to take the oil company of saudi arabia public we have had guests on who said they think that will be impossible, that the balance sheet of the country and the company are completely intertwined and the vested interests are so hard to overcome that they will never list in a real place like london or new york, but places with weaker listing standards is this part of that is he trying to achieve something real can we put those two things together >> well, i think he may be but here's the thing when you look at saudi arabia, it's much easier to find out who is socializing with who, who is going to what party. the deepest, darkest secret in saudi arabia is actually involved with the oil reserves, how much each field has, so i'm not sure whether you are going to have it listed in a way that will make it responsible with the transparency that would be expected of every other company. that said, what the prince is trying to do is not simply bolster oil. ultimately that's what got saudi arabia in this problem in the first place. but to diversify the former oil minister of saudi arabia famously said look, the stone age didn't end for a lack of stones. the oil age isn't going to end for lack of oil. what saudi arabia is trying to do is build up its agriculture, build up its tech, build up its chemicals -- >> then why put the biggest investor in saudi arabia al waleed is low on the totem pole he's known for technology and financial investing. if you put him in jail, what -- or in detainment, what are you saying to potential outside investors about the safety and stability of a non-oil saudi arabia >> this can cut both ways, actually on one hand, look, it's selective justice. everyone in saudi arabia is just as corrupt although it depends on how you define corruption you don't have the whole conflict of interest regulations and laws like we do in the united states. what's being said by mohammed bin salman is no more dealing with these other princely power centers. you have to come to me the question is whether that works or not if it does work, if people know whose door to knock on, that gives a little more certainty. but you are absolutely right it doesn't signal a 21st century modern economy >> he's made a lot of enemies by doing what he's doing, right >> absolutely. this is the danger you look at what's going on with yemen, yemen has become a huge financial drain on saudi arabia at a time when saudi arabia can't afford it because the price of oil has declined. so the question is whether he's just trying to shut up dissent at a time when he's gone so far out on the limb that saudi arabia's about to plunge over. >> he's edged out a couple of other crown princes to get where he is. does he have, i can't imagine he has their support, but does he have the support of the security forces, the national guard >> well, this is what we are going to see certainly i don't think he would make this move if he didn't have the support. against the backdrop to this is of course all the rumors the saudi king, his father, is actually ailing has a bit of senility so this might be why these moves are being made now rather than later. >> what would backlash mean in the long term? would that mean his agenda gets thrown away? does it mean the aramco ipo's if jeopardy what does that mean, exactly >> you look at everything which the crown prince is trying to do in terms of liberalizing the economy, in terms of bringing women into the work force by allowing them to drive and so forth, in terms of oriented much more towards the west. if you have the backlash, if muhammed bin salman falls like so many crown princes have fallen, ultimately you will plunge into a much more sectarian saudi arabia that wants to fund extremism, that might be much more hard line against the west, much more distrustful of the west, much less a willing partner that's the danger. >> any reason to be suspicious about this helicopter crash? >> ultimately, the fact that it occurred so close to yemen brings a great deal of suspicion, and the backdrop to all this of course as we enter the saudi perfect sand storm, so to speak, is that you had a ballistic missile that was intercepted over the saudi capital. that suggests that the yemen war and accusations of iranian involvement are becoming much more serious if houthis were responsible for downing this helicopter instead of mechanical failure, that's a big deal it went down in the province right next to yemen. >> we have been showing secretary of state rex tillerson meeting with the crown prince. what do you think the u.s. administration is thinking about all this >> well, ultimately the united states just wants to see the crown prince succeed but there's always a danger in consolidating policy into one single individual, because when that individual's gone, chaos can reign supreme. we are at a very dangerous time in saudi arabia. >> certainly looks like it thank you so much, michael good to have you on. >> thank you two years ago the world was rocked by the release of the so-called panama papers. more than 11 million sensitive financial documents stolen from a secretive panama law firm. now hackers are at it again, this time targeting bermuda. eamon javers dives into the paradise paper hardly paradise for those folks named in them. >> the opposite for a lot of these folks. another astonishing leak of offshore documents, in this case seven million documents, as many as seven million documents from a law firm which has offices in bermuda. they were sent to a german newspaper and shared with the international consortium of investigative journalists which spent months looking into these documents and sharing them with reporters around the world gives you rare insight into the global offshore financial world. those are secrets you don't often get to see about 120 politicians and royal family members of countries around the world have been named in the documents so far. one of the people that u.s. media have focused on is wilbur ross, secretary of commerce. ross shares business interests with vladimir putin's immediate family ross failed to clearly disclose those interests when being confirmed earlier this year and retains an interest in this shipping company called navigator holdings it's navigator holdings that has a business relationship with a russian energy firm controlled by vladimir putin's son-in-law all of that, new reporting over the weekend. today on cnbc in london, wilbur ross responded to all this saying ultimately he's done nothing wrong. here's what he said. >> there's nothing wrong with it at all i think it's just an example of the press trying to find anything they can, however remote or silly, to attack the president and somehow link him to russia. this is nonsense >> it's not clear who ultimately stole these documents from the law firm in bermuda. it's not clear why they did that or exactly when that hack necessarily happened the law firm at the center of all this, appelby, says it has been the victim of an illegal computer hack but again, we don't know who did this or what their objective ultimately was >> think it's safe to say it is linked to or related to the hackers with the panama papers >> it seems like -- >> it's the same newspaper in germany, correct kind of a midlevel paper in germany. >> very similar m.o. but you could see somebody piggybacking off the panama papers to do this themselves, then just follow the playbook not necessarily guaranteed it's the same people. the big difference here is with the panama papers, we didn't see a lot of american names. in this case, we are seeing a lot of american names drawn into the story. could it be two different entities doing this for two different reasons politically? not clear. we have to find out. >> to make sure i understand the relationship wilbur ross has, he has a stake in this company navigator, and one of the clients of navigator happens to be a russian shipping company? is that correct? >> right of which a share is owned by the son-in-law of vladimir putin this is a company that does business with a russian energy firm and as you saw on the tape, wilbur ross says he did nothing wrong. this is a normal commercial relationship according to the secretary of commerce. >> thank you, eamon. president trump continuing his jaunt through asia today, starting in japan, now heading to south korea what is he hoping to accomplish? and why michael kors is soaring while a lot of retail is struggling so what else is new? how's your mother? umm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird. president trump continuing his asia trip with a visit to south korea. kay kayla tausche is live in seoul >> it's a 24-hour operation here the president set the arrive in just a few hours seoul is the third stop of his five country, 12 day tour which the white house is quick to point out is the longest presidential trip since george h.w. bush in 1991. president trump has noticeably dialed down his colorful approach to north korea, warning against dictators broadly but making no mentions of rocketman or fire and fury or locked and loaded, as he previously referred to kim jong-un's regime japan's prime minister announcing not only new sanctions for north korea, but today also military enhancements with the united states >> the prime minister of japan is going to be purchasing massive amounts of military equipment, as he should, and we make the best military equipment by far he will be purchasing it from the united states. >> where he's become more measured on national security, he's become much more vocal on trade, criticizing long-time ally japan for trade that he says is neither fair nor free nor reciprocal, and taking aim at a $70 billion deficit where there's no deal to go back and revise, they are starting from scratch on talks there that could portend trouble for south korea, where a much smaller deficit was the catalyst for renegotiating the just five-year-old korea free trade agreement. august and october rounds to renegotiate that were slow going. there's not much to say about what got decided there and the public here in seoul will get to attend a hearing on friday on how they think this deal should be revised clearly it is top of mind for every day citizens in south korea. trump and south korea's president moon tomorrow will hold a bilateral meeting they will also have a presentation at the national assembly where president trump will make a speech experts say he's starting on friendlier territory in allies before going to tougher negotiations in china and the philippines later on during this trip >> thanks, kayla will there be any significant policy announcements during the trip? let's bring in the managing partner at bridge park advisoras former undersecretary of commerce for international trade and dean change, senior research fellow at the heritage foundation let me begin since you are sitting in the studio with us, what do you think the major outcome of this trip will be >> look, this is a very important trip for the president. this is his first trip to asia and it is where a large portion of the u.s. trade deficit resides which he's been so active in talking about, and it's going to have two components there will be a strategic and national security component, primarily focused on north korea and to a lesser degree, the south china seas, and there will be an economic and commercial component. and that component is going to be primarily focused on trade. my fear would be if the president and the administration continues to focus on the trade deficit, not much will come from it >> why do you say that why is that the wrong thing to focus on >> because we have real issues with china and other countries >> market access >> market access, for example, rules of the road, for example, but none of those are fundamentally going to address the trade deficit which is fundamentally caused by the savings glut that exists in these countries as opposed to the terms of trade so focus on the terms of trade, work with u.s. companies to have more and better access to those markets is the way to go >> dean, your reaction >> i would tend to agree with stefan's observations. i think that it is going to be very strategic focus north korea has been making very dangerous threats against guam, against hawaii, and on the trade aspect, really it is in particular with china, i would add the issue of intellectual property rights protection i think the president going over there as the i.p. probe is still under way means that he does have a potential cudgel up his sleeves. >> dean, i'm sure general dynamics and northrop grumman are happy. should we be worried that japan for the first time in 60 years is effectively rearming? >> japan has been pushed by the united states to rearm since the cold war president reagan and the prime minister built a very strong relationship on the idea that japan would expand its capabilities so long as the u.s./japan alliance is strong, i think fears of growing japanese military capability are more than overblown >> back to china and the trade point, the timing of this is very interesting from the chinese perspective. xi jinping just came off the peoples congress where his strength was reaffirmed. how does he enter those talks when the u.s. wants to get fair ground for its companies >> it's very interesting one of the things i think we have a misconception about is how all powerful the president of china is. i had made five separate trips to china as undersecretary of commerce, worked very closely with the vice premier who had responsibility for that part of the portfolio who was just, by the way, elevated to the standing committee we had companies coming in and industries like steel and aluminum, for example, talking about overcapacity in those industries i think the central government fundamentally understood those issues and agreed with them. but they had actually limited ability to influence the provincial governments in making the hard changes, closing down big factories that employed lots of chinese folks that had moved from the countryside that had been at the heart of reducing poverty in that country. i would not put too much stock into what president xi could do individually quickly >> dean, do you agree? the overcapacity of steel production in china comes up here all the time. it's gotten lots of complaints from steel producers in the united states that feel their prices are pressured because of this big production glut we know the reason those places stay open over in china is because they don't want to deal with the issues of unemployment. could xi be doing more, or is it really up to the regional governments who don't care >> i think xi could do a little more in the short term and they have floated the trial balloon of reducing steel exports but in the larger main, when we look at xi's remarks during the 19th party congress, he repeatedly emphasized that state-owned enterprises, state-directed, state champions, state-directed priorities would take precedence the market was really almost pushed to the side this suggests that for the next five years we will actually see probably a recentralization of economic decision making in the hands of the government in ways that are fundamentally anti-market access >> very quickly, calculate the leverage between the u.s. and china. who's got more of it and where >> you know, we still do have the most powerful, important economy in the world china fundamentally needs to be better connected to the global economies if they are going to achieve their goals. their goals are to avoid the middle income trap where they currently are, which will be very difficult to do, and to continue to grow prosperity in the country. as president xi and the party consistently said, that is the linchpin -- >> aren't they going backwards based on what dean said? more state control of big industry i read everything that -- it looks the me like they are going backwards, not forward >> that's exactly the issue. they have certainly gone less forward less quickly than we had hoped when they joined the wto 15 years ago what the president and his team should be doing on this trip is continuing to push them hard to make those changes what's ironic about it is those very changes are going to be required if they are going to be successful in achieving their long term goals. >> we can find low cost manufacturing in a lot of different countries around the world. >> thank you both very much. appreciate it. >> thank you don't tell michael kors retail is dead that stock soaring on a big beat and some good news we highlight what kors is doing right, coming up plus, what the proposed megamerger between broad com and qualcomm means for apple ck brit unch" wille gh ba to the brink of nuclear war, accused of obstructing justice at the fbi and of violating the constitution by taking money from foreign governments and threatening to shut down news organizations that report the truth. if that isn't a case for impeaching and removing a dangerous president, then what has our government become? i'm tom steyer, and like you, i'm a citizen who knows it's up to us to do something. it's why i'm funding this effort to raise our voices together and demand that elected officials take a stand on impeachment. a republican congress once impeached a president for far less. yet today people in congress and his own administration know that this president is a clear and present danger who's mentally unstable and armed with nuclear weapons. and they do nothing. join us and tell your member of congress that they have a moral responsibility to stop doing what's political and start doing what's right. our country depends on it. the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. ray's always been different. last year, he said he was going to dig a hole to china. at&t is working with farmers to improve irrigation techniques. remote moisture sensors use a reliable network to tell them when and where to water. so that farmers like ray can compete in big ways. china. oh ... he got there. that's the power of and. welcome back to "power lunch. take a look at shares of michael kors soaring after really blowing past analyst expectations for profit. also beating on revenues comparable still, store sales negative but much better than expected as a result of all that, the company upping its full year guidance one analyst thinking management being prudent with that guidance and there's more room to run forwd. a mo coming up including moves in chip stocks after the break. why do you put up with it? believe it or not you actually like what you do. even love it. and today, you can do things you never could before. you're working in millions of places at once with iot sensors. analyzing social data on the cloud to create new designs. and using blockchain to help prevent fraud. so get back to it and do the best work of your life. and using blockchain to help prevent fraud. check out this new duckchat from aflac! the duck is answering my benefits enrollment questions in real time, without any confusing mumbo jumbo. thanks duck! yeah honey, i'm sure that's the duck. in fact, he's probably working overtime, just wing-typing away about premiums and deductibles the duck is working 24/7 to help answer all your benefits questions. aflac duck chat. let's chat in messenger. firstthen you put yourselfareer. through school. got the degree. you've given it your all, to reach the goals you've set. don't let student debt hold you back. refinancing student loans with sofi can save thousands. so you can get where you've always been headed... sooner. see how much you can save with sofi. the leader in student loan refinancing. hello, i'm sue herera. here's your cnbc news update. texas officials say the church shooter, devin patrick kelley, expressed anger towards his mother-in-law. she received threatening texts from him and she was a member of the first baptist church where that shooting took place 26 people were killed. another ten victims are in critical condition the dead range in age from 18 months to 77 years old president trump and japanese prime minister shinzo abe holding a news conference in tokyo. president trump supporting japan's pledge to shoot down north korean missiles if necessary. >> if this guy when he completes the purchase of lots of additional military equipment from the united states, he will easily shoot them out of the sky, just like we shot something out of the sky the other day in saudi arabia, as you saw >> the president was referring to a yemeni rebel ballistic missile being fired towards one of riyadh's international airports on saturday the saudis said the missile was shot down by its air defense forces and did not cause any damage that is the news update this hour i will send it back to you guys on the desk. >> sue, thank you very much. we have breaking news from the floor of the new york stock exchange david? >> thank you, melissa. yeah potentially big story here in the media business 21st century fox has been holding talks to sell most of the company to walt disney, leaving behind a media company tightly focused on news and sports, according to people familiar with the situation. the talks have taken place over the last few weeks and there's no certainty they will lead to a deal in fact, the two sides are not currently talking at this very moment but given the on again, off again nature of these talks, they certainly could be revisited. for fox, the willingness to engage in sale talks with disney stems from a growing belief amongst its senior management that scale in media is of immediate importance and that there is not a path to gain that scale in entertainment through acquisition. the company issaid to believe more tightly focused group of properties around news and sports could compete more effectively in the current marketplace. the media landscape has of course changed considerably in recent years with giants such as facebook, google, amazon and netflix changing the way people consume media and dominating the digital distribution of digital individual y video content. being able to compete requires scale that a disney does have, but 21st century fox does not. for disney, the opportunity to take control of another movie studio and significant tv production assets as it readies a direct-to-consumer entertainment streaming offering is certainly attractive. as is fox's significant exposure to international markets such as the uk, germany and italy, both through its networks and its 39% ownership of bskyb disney announced it will pull all movies from the netflix platform and offer two new ones, one for sports and one for its marvel franchises. the company could not own two broadcast networks and would therefore not buy the fox broadcast network. it would not buy fox's sports programming assets in the belief that combining them with espn could be seen as anti-competitive from an anti-trust standpoint and would not buy the fox news or business channel. disney also would not purchase fox's local broadcasting affiliates, according to people familiar with the negotiations in addition to the movie studio, tv production, international assets and bskyb, disney would add entertainment networks such as fx. the contemplated structure of the deal or the price that has been discussed could not be learned. given what it would involve the sale of many, but not all of fox's properties, it's unclear how fox would mitigate potential tax consequences of a deal officials at disney and fox declined to comment. certainly groundbreaking talks and a willingness on the part of the murdoch family which has always shown a willingness to be bold, to do something bold yet again in this general belief that having scale in entertainment at this point is very difficult to find and a more focused company on sports and news, very similar to what cbs is in many ways, is a more effective way to compete >> this begs the question, what does 21st century fox do with the money from the sale, what other assets would they be looking to potentially buy in order to beef up the news and sports side of the business? now that that's the core >> i don't know the answer to that it's a good question >> we do see shares of cbs rising right now as your report unfolded here with perhaps people surmising something might happen >> although the redstone family of course has shown no willingness whatsoever to part with that asset. it is a controlled asset but to your point, if in fact, again, i want to make something clear. these talks have taken place very recently, focused on exactly what i just reported they are not currently ongoing they could be revisited. but as you all know, once something like this is made public, it certainly can change the dynamic. >> i just want to point out some of the stock reaction on the back of your reporting foxa shares have been halted due to volatility. the shares last trade up 5.7% but again, halted right now. across this media complex, we are seeing very interesting reaction on the part of disney shares up 2.2% viacom up 3.5% netflix losing some steam here on the back of this as well. >> go ahead. >> i was just going to say, lot of people realize that fox, they think of fox, the simpsons, the movie units. you don't necessarily realize how big the corporation is globally 120 companies across 30 markets. star india, sky in the uk, the australian assets. do you believe this, if a deal does get done, awesome reporting, by the way, as always, that this is a rejection of the global strategy by the murdoch boys >> you know, i don't know. i think it is a result of a lot of thinking that they have been doing at the management and board level at this company about how they can effectively compete in this marketplace that we talk about so often as changing so rapidly. we all know about cord cutting we know about the growing dominance of netflix and of course, when it comes to advertising, the dominance of facebook and google in the digital world and amazon not far behind them in terms of the content side of that they are thinking about this world saying what can we do to get larger, to get scale, and coming back to the idea that perhaps the best strategy would be to explore selling rather than buying a lot of those assets, doubling down on news and sports >> 21st century fox has reopened here >> want to come to the question of what disney sees in this, if i might. if i'm taking this apart correctly, the attraction for disney is broad global distribution, bskyb, star, fx, other cable properties and networks, and you get a production company thrown in you quarantine off the news and sports divisions for various reasons of antitrust concerns and other things, but you are getting distribution that's what i see here i wonder if there's an amazon reaction in this, that amazon is now becoming a big distributor of programming, not to mention netflix, so what disney is trying to do is to get better distribution strength. >> you know, international is very important it doesn't have quite the strength internationally that it does domestically. certainly distribution is a part of that. but don't forget, very importantly, the company's embarking on this direct to consumer streaming offering of both sports programming and perhaps more importantly, entertainment programming, pulling all their movies off netflix eventually and bringing this direct to consumer offering the intellectual property as they like to call it in the media business these days, that is brought by having the fox studio, fox tv programming production unit, is enormous when you are bringing a direct to consumer offering i think that also is something that disney would be very focused on in terms of why it would want to have engaged in these talks. >> you know, as you know, oftentimes when news breaks of a potential deal, the acquiring company's shares fall because investors are nervous about a variety of reasons, unless they think strategically, the deal is a really good idea disney shares higher by more than 1% on your report >> yeah. listen, i want to make it clear there's a lot of gaps here i would love to fill them all in, as you might imagine, people are somewhat reluctant to do that so i don't really know exactly what the price or structure of this deal encompassed. again, the talks were very recent, although at this very moment, they are not ongoing but it is interesting to see that disney is responding positively to this let's not forget, mr. iger will be ceo until '19 they do not have a successor at this point mr. murdoch is 86 years old trying to sort of figure out the future for his company as well >> as disney is up, netflix is down think back to that big announcement as you highlighted that disney would create two of these over the top channels to supply directly to consumers you can see what the rationale would be instead of competing property after property after property as we see facebook and amazon and these people spending a billion here, a billion there, just buy a ton of it so you can send it down the pipes >> content and streaming >> not to mention the ownership of hulu comes into play and is significant. that is yet another element of this overall deal because they have joint ownership >> you reported that the two sides, if i heard you correctly, are not currently in talks discovery announced the deal to buy scripps on july 28 the stock was $26.80 it's now at $16.80, losing 37% of its value do you think, again, i'm asking you to speculate, i apologize, do you think the murdochs and bob iger and everybody at disney saw the market reaction to that and maybe that's the holdup? >> you know, everybody has seen the market's reaction to that. i would argue it's a reflection of a lot of hes taeitancy on the part of investors for people to believe even those two companies put together have enough scale that's the take-away is that still enough or is that not enough to compete in this quickly changing marketplace domestically, whereas with disney, when they did introduce, this was a big moment when they introduced the idea of coming direct to consumer, they do have that scale even they have it now or would certainly have it were they to buy these assets from fox. that's kind of part of the overall reaction to discovery and scripps, even though obviously both those companies believe it will strengthen the combination to the point they will be able to compete, investors certainly seem to be taking a wait and see approach at the very least. >> david, stay right there we want to bring back stefan selig from bridge park advisers, a former long-time deal maker at bank of america merrill lynch. what's your reaction to this >> it's certainly a big audacious deal with far-ranging implications it will attract a lot of media interest and public interest but i think as david suggested, it's -- it seems like a long way to getting done. it is highly complicated but companies are getting bigger and we are continuing to see a shifting landscape in media and entertainment companies for a lot of the reasons you have been talking about. >> highly complicated in that -- >> these are -- >> -- talks are not proceeding >> they are multi-form companies in a number of different jurisdictions that is going to get real regulatory scrutiny and given the size of the deals, there will be certain financial constraints. i think it's a reflection of the fact there's a seismic change undergirding what is happening in these industries and as two leerd leaders they are trying to get in front of it >> they need leverage because comcast, our parent company, has the pipes. this might be a reaction to if we are disney/fox, we have more leverage against perhaps the comcasts of the world? >> you have been doing this a long time. the only thing we know is the debate swings back and forth every number of years. given what's going on -- >> it's content. >> given what's going on with technology, i think we will continue to see that bouncing ball >> you highlighted one of the regulatory issues. disney has got espn. you won't buy fox sports any other regulatory angles you can look at? i just think the story we saw recently that the doj is thinking about trying to stop or at least file suit when it comes to at & t and time warner, any thoughts what could happen here? >> listen, again, fox, what would be left of fox is a sports and news company with a broadcast network. the affiliates are not part of this that would be regulatory tough broadcast networks, you can't have abc and fox owned by the same one fox news, fox business, not part of this deal those are problematic. there was a time when you could have said putting two movie studios together would also be problematic from an antitrust standpoint >> not anymore >> not clear that that's the case any longer. when i think about what it is they are interested in or i should say, what they have been negotiating to buy and not buy, it's not clear to me that it really raises -- everything raises antitrust issues these days but not as much >> antitrust review goes on what they define as the market and a few years ago you could have decided the movie business market was just the theaters and in-home distribution but now with netflix and amazon and facebook, the definition of that market is so much larger, can't imagine that would be any kind of concern what about the other side of fox, any talk that the "wall street journal," any part of that dow jones family, was involved in these talks at all >> no. you know, the only thing, this is pure speculation in terms of when you start to think about these things, if this deal were to have occurred or were to occur, perhaps given the market's reaction, it will embolden both sides to fully reengage, never know, one wonders whether fox being a news and sports company might be a good fit with news corp again. you have to at least think about that as a possibility down the road well down the road >> that's how you bankers like it, right? you put the companies together, break them up again, put them together again this is a dream. >> everybody gets paid along the way. >> but is the egg broken right now? think fox would need to do something? we are putting you on the spot here >> i think every company that is looking at this landscape is continuing to assess its strategic opportunities and alternatives and so not just these two companies are going to be looking into this, but on this announcement, you can be sure that all of the other leading companies in the industry -- >> cbs will be >> -- will be thinking about their alternatives to your point about putting things together, the cbs, viacom stuff, you reported on it in the past, i think all of this will continue to spin and it will be a long time until it fundamentally gets settled because the technology is going to continue to change. >> if you were in a room with bob iger right now, what would you be asking him? >> how am i doing on tv today, bob? >> how about you what would you be asking, david? >> you know, listen, i got a lost questions i like to do them in private as well >> david, when you see viacom shares spike on the back of this, what's your thinking what's your interpretation of that spike, that perhaps viacom could be a seller of assets as well, or that a higher multiple for 21st century fox's assets will put a higher multiple on viacom's assets? >> all of those things are a possibility. i think it's highly unlikely were this deal to happen and a lot of cash were to come into 21st century fox that they would go out and buy another -- that's not going to happen. they aren't a potential buyer of that, cbs, maybe more so that means you have a willing seller which you do not have on the part of the redstones. i will say the willingness of companies to consider doing anything at this point given how quickly things are changing, perhaps investors think well, maybe those guys will also be thinking long and hard about what can you do in this current environment. remember, viacom also was in there to buy scripps and lost out to discovery in the end but certainly had worked hard to potentially secure that asset as well >> everybody stay where you are. we will have much more on this developing story as we leave you for break, 21st century fox shares are trading pretty much at session highs on this report that disney has held talks to buy most of 21st century fox, according to sources being told to david faber. we have an analyst to analyze this situation, this potential deal, on the other side of this break. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and. . breaking news moments ago. 24th century folks had been holding talks to sell much of the company to disney. turning to us now is laura martin listen, three years ago, disney was a $99 stock and today it is a $99 stock, it has not moved in three years. i am not being insulting it is a tough media landscape. do you believe in this deal and david said they are not currently talking, if this deal does get done, this is going to be disney's netflix killer >> um, yeah. i am going to go on that and say yes. >> disney is a better operator and these assets they are talking about buying from fox was double the responsibilities. and so they can bring more assets to consumers. when you see the studio, they are worth so much more putting in a disney camp that is twice profitability. you make more money and more over the top direct consumer and you give consumer choices. good deal for everybody. >> on paper it looks great what are the assets looking to sell worth and what would the price tag be for disney and how much would this cost ultimately, do you think >> $20 billion or $30 billion depd depending how fox wants to be of negotiations they're putting out on disney's hand making more money disney is not over paid though they won't be giving fox their excellence of running the business better. at the end of the day, fox will get more money than they could have operating >> market cap is almost $154 billion this is an easily finance accusations and easy for them to do in terms o f size if you think those properties would roughly cost $20 billion, correct? >> yes, easy for disney to do this >> so bottom line, you like this deal, you would like this to happen >> dreams come true. >> dreams come true? >> most of our viewers known fox as fox sports and "simpsons" and maybe fox news the company is so much larger than the around the world. what's the most valuable one or two assets outside of the broadcast networks that david faber has said are not involved in these talks >> yeah, david is getting these. unclear of the most valuable asset in the deal are putting those studios together you can get rid of a lot of the current productions, those are a lot of valuable things they are talking about. for sure, i don't think the government would allow broadcast to be owned by disney. so you can argue that's worth a lot of money as you know, you watch multiple stations and what they have. what are those valuable in the past but i don't know of local stations valuable anymore because there is a lot of customers on those and within fox, there is the recent sports network of forx. people are going to argue with you, disney don't think they can get a granted trust. >> sports maybe a sport strategic move because i think it is possible >> so what if anything, laura, does this say of succession at either of those companies and presuming this deal is consummated, who runs disney three years from now >> we do not have a successor. it would really spotlight the fact that disney has a succession crisis at disney because whoever -- so who ever they sign up to be the next set of business would tough with integrating these assets and running them to have a positive return on capital >> we have a glimpse of what disney would like to do. lets say these deals would not go through, are there other parallel deals that disney could pursue >> if at&t is allowed to buy time warner, it is an open question to disney to buy the warner brothers film assets. again, the value created when you put two studios together, you cut out billions of dollars of distributions you don't see two guys sit in at least of the distribution self that would be a logical one. >> why is disney studio so much more profitable in fox is it better decision making or franchises that they had such as "star wars." >> it is a controversial answer. it is a great film making. you have events and marvel fran chi ch franchises i would argument it is diversications >> all right, laura, thank you very much. a dream come true kind of deal from her perspective >> dreams come thrrue. >> we'll have more of this developing story when we return, an exclusive interview with the ceo in the second half hour of hour of "power lunch. you can't predict the market. but through good times and bad... ...at t. rowe price... ...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. welcome to the second hour of "power lunch. >> news just breaks moment ago david faber is reporting disney held talks to buy most of 21st century of fox specifically, every asset except for sports as well as news we had an analyst, laura martin, says this deal could be worth $20 billion or $30 billion and a dream come true for disney's shareholder and we are seeing the reaction across the media space. take a look at netflix losining some attitudes on tltitudes on . >> disney is higher. >> we had laura on and it will cost them $20 billion to get these assets and easily managed by disney. if you like it strategically, the stock is higher on the news and certainly not lower at this point. >> if the deal gets done would be the biggest movie studio by far in the united states 20th century fox which is what the movie studios are kastill called you think of disney, what would disney do if this deal is done they got mavel and pixar and lucas films. and i never understood why they produce that movie, it was a big hit. >> you got disney properties and you can do pixar and "star wars," that's an interesting combination. >> you can be hot one year and a couple of years ago, comcast universal was big and now disney is on a role lets get the latest this year. >> the new york stock exchange, lets go to david of course, you guys have been talking about it. it is worth going over it again, the talks have been taken place but are not currently held between fox and disney and they have been focused on a sale of many of the assets at fox leaving behind for that company though, what would be a tightly focused news and sports in company. that's according to people in the situation. those talks have been going on in the last few weeks and not taking place at this moment, they can easily be visited at any moment in time for fox, the main take away is the willingness to engage in sales talks with disney. what i am told is the growing belief among senior management is of the immediate importance and they don't see the patent to get to this scale and business again, they have not put into action and announced the deal but they are thinking that way and as you guys all know media landscape has changed considerably over the years. we have netflix and amazon spending billions a year and we got google and facebook providing a great deal of digital videos as well so being able to compete in the landscape, that requires scale 21st century fox does not have quite enough of it for disney, the opportunity of having a studio, to have production as they get into consumer offering, not to mention of taking control in e hulu and you are talking things such as sky and star the natgeo network and fx. and even the movie studios and production assets. all the other things they don't add up to fox news channel they could keep that fox business, they would keep that and fox sports, they keep that >> just worth mentioning as wel when it comes to cash flow it is not most of the companies. when it comes to assets, it is. neither company would comment for report and talks are very recently but not ongoing at this very moment. >> back to you >> all right, david, thanks. we'll bring in your friend and associate jim cramer for his reaction the m"mad money" guy is in san francisco today. jim, thank you for making some time for us. lets get your reaction on david reporting on this possible of a deal of disney and first century fox. what do you think? >> a few minutes ago, i came from the fox booth what were they trying to do? how do we connect directly the answer is maybe we cannot. i know fox invests in a lot of money. one of the things of this era, it is all defense. no one is playing offense, they're trying to make it so they have something to bargain with whether it is broadcom with qualcomm or fox with disney, they want to be able to get control of their destiny or whether it is wall street or with the consumer. i have to tell you, you have to make it with the antetokounmgige to make it happen. >> i am going to use the term that you hate and everybody hates. millennials. millennials control everybody's destiny. everybody at the age of 24 is more powerful than anyone running fox or disney or bro broadc broadcom apple seems to get that. all these companies have lost their ways because they cannot figure what millennials want if you want something for nothing, it is hard to make money. that's what disney and fox are realizing right now >> they want to stream for nothing. >> they don't want to pay cable subscriptions. >> right, they are used to free. they are used to pirating and free if disney and fox get together, maybe they could have some power and reassert the dynamics that does not exist right now which is the dynamic that says you know what, the customers is always right these companies cannot afford the commerce always right because the customers don't want to pay as long as you have the current narrative then everybody has to say good-bye no one wants to pay. for apple, for uber or cosmetics, the darn screen and the resolution of the apple phone is so great that you don't want to look at yourself >> jim, should netflix be concern? >> no, it is a worldwide television network >> net flicflix have figured itt they're millennial tv. millennials don't mind paying 9 bucks or 10 bucks a month.n netflix have artificial intelligence and they know what you want >> notice how few things that netflix does don't succeed artificial intelligence, nit fl netflix. they know what you want. these other guys, they roll the dice constantly. you cannot roll a nice and be $100 million business. >> right now the talks between disney and 21st century fox are not on could somebody else step in and bid on the same asset that diz any disney is talking about. >> i find all those companies think that there is so much smarter. look, if you are a computer scientist, i think the problem with this is they don't need to play defense all the company -- everybody else is playing defense, if you have a defensive mind set, you don't see defense playing offense in the nfl and these guys trying to score by an interception or pick six the analogy of the nfl works because these guys they really don't know how to score anymore. so they figure if they get together, they'll score a few mo more >> we have laurie martin, she says it is a dream come true because disney runs a studio better than fox. she says disney is in an acceptance crisis. you put these two companies together, it is a big change for them who would run it sometimes accusations occur because they are trying to solve for uccession, is it possible that there is executives out there in this company that's brought over as part of this >> there are certainly executives that's brought over i have not heard anybody indicates as a name somehow. as many way, bob is trying to set up this for his successor with pulling things off of n netflix and trying to get sports programming in the right place and this potential deal as well. we are wondering who the person is going to be and who extended his employment contract a number of times as you know and it is now looking at, i think july of 2019 as his departure date >> one thing wheb n it comes to scale, fox tried and failed gaining with its numbers of time warner years ago tf it was a number of bids that failed >> had they for seen what was going to quickly arise i don't know they failed then the number of asset can conceivably move the needles of course, our parent company has a pretty size group of assets as well don't want to forget them. everybody stay where you are we want to bring in our craig. it is extraordinary and how we wake up this morning with sprint/t-mobile being the headline and people jumping in on david's reporting and talking about charter and sprint and now that's pushed off by leondisneyd fox. it is extraordinary how quickly things are happening >> it seems everybody is failing. john ledger would probably disagree >> sprint/t-mobile, nope maybe this deal. verizon buys aol or whatever it is do you believe anybody that really knows the future? >> well, no. >> we have now spoken for ten minutes and no one mentioned how espn is losing subscribers how do you like that is that supposed to be the narrative? we changed it. i guess i can put it out there fox is trying to get in touch with consumers and i saw it out here in dream force and disney is trying to get in touch with consumers because they cannot fill out how they lost control because customers are fickle they're onto the next and trying to figure out video games and sports all this fits with the idea that these guy havs have lost contron lost cuts with the actual customers. they have to fix it and trying to do it in a different way. >> david, craig as he said of course, it does not cover these entertainment companies but something he covers closely is court cutting. is this incredible change that we are in the midst right now in terms of how people are paying for our watch and tv craig, how do you see disney involving? >> direct consumer offering is an important one and if they were able to complete the deal to require, things like fox studio and production number that would enhance that direct to consumer offering, would it >> yeah, it would and you know that would give them a lot more negotiating leverage with distributors and not just the old line distributors but comcast and at&t and direct tv to the world but also the ltt distributors and would give them the ability to dictate a lot more about how the industry evolves. that could be what's appealing to it. you get to decide how quickly dott evolution happens and you get to decide how quickly customers have it changed. we have said all along -- look, it is not like it is a revelation to find out there is a lot of people out there that would like to pay $35 instead of $135 for their video it is never a demand problem, it is a supply issue. >> where do we stand when it comes to court cutting right now? >> are disney right to be so aggressive to change their entire business model ifthey are going to push to consumers as much as they are and jim's point of losing describers to espn >> well, i don't want to go out too much of a limb commenting of direct consumers, i would say this, the reason the media business have been fantastic for the last 20 or 30 years because those businesses add a unique price model putting price increases for three consecutive decades. the reason they were able to do that was precisely because it was not a direct to consumer model. it was because they were hyped behind distribution model that prevented a real prize discovery by consumers the other business that i can think of that have the same characteristics are probably healthcare where consumers because of insurance were largely blind of what they are paying of healthcare >> good comparison craig moffett. >> thank you, david, he's going to work the phone. we'll head back to jim cramer. >> hey jim >> we are at the biggest celebration happen in san francisco and it gets bigger every year tell me the size of it and what you are shooting for, marc benioff. >> people can join us and see the show and see what's happening here >> you are setting a goal of $20 billion in reserve news. you just did 10 billions, too ambitious? >> no, we are going to double this company again we are going to do more than $10 billion this year and we'll fast track it to 20. >> one of the things we have been talking about how fox and disney, talks are on right now i would suggest fox boost, foxx seems to be about finding millennial consumers in order to find consumers and keep consumers, they need sales worth, how does this happen? >> every company is getting closer to their customers. it does not matter if you are a b to b customers or b to c company. >> fox is no different and all of news course are in no different. if you are in the media business, you have to be connected to customers and there is more capabilities to do that ever before. we are going to profile fox and we have our management team. >> they are not talking to disney, they're talking to you >> i don't know what's going on with disney. their management team is here and it is an exciting time for sales for fox. you will see incredible new capabilities between the two companies. >> i bump to some caterpillar people absolutely putting cat, their devices and tractors and drugs o online using sales >> all these farms are being fully automated and we are moving farmers, farms without farmers. this is an amazing and caterpillars have to be apart of that trend and to be able to seize the ground and harvest and warehouse a warehou warehouse and you have to be connected with your customers. all of that is industrial revolution when it come to farms. this is a fourth industrial revolution and changing everything >> everybody here is wired to the idea that well, if you are elevator directed consumers. >> you can see elevators are now talking to you nobody wants to be in a stuck sell vaccina elevator >> true. >> we where going to predict before it fails or directly with the building and know what's happening. the motorcycle is all connected and deeply connected motorcycle. how many new or large, this year ve verses last year >> i was with the ceo of a huge tire company and he's like marc, i have to tell you, everything is changing for me and i am like how could it be changing on tires? >> fourth industrial revolution and tires are connected. before when the tires blow, nobody knows and now everybody knows and everybody is connected and that's the power of what's happening. >> we look forward to talking to you tonight, marc benioff, 175,000 people, very exciting. >> jim, welcome to san francisco. >> hey, jim, are you still there? >> you bet >> mark cuban just tweeted out he just finished a work out, his hotel has no water so he said be ready for a sweaty scuban. let beniof know. >> how could they not know there would not be any water, can you fix? >> would they see it ahead of time >> all these controls are connected and there is no excuse for every company not knowing exactly what's happening with their customers >> now you switch ohotels >> well, we have marriott here they are moving their hundreds of millions of consumers into a community and they're connecting one on one relationship and you are getting your keye keys on y phone now >> please check if it is marriott >> i will find out >> jim, great stuff, marc, thank you. >> catch the rest of jim's interview with marc benioff at night. zwri m gng to speak with dan shulman tonight," power lunch" is back in two-minutes well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big 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(child giggles) symbicort. breathe better starting within 5 minutes. get symbicort free for up to one year. visit saveonsymbicort.com today to learn more. century fox is selling most of their company to disney. >> a guy that i have not spoken to for years blair, it is good to hear from you. >> thank you >> the two sides not talking now, if they were to reinvigorate the talks based on what you read and heard from david faber, do you believe the fccwould allow this deal, has the market grown wide enough >> the right thing to start with this is right after -- so does it get to an unthinkable standard i don't think it is unthinkable. it is certainly not unthinkable now. there is a couple of different reasons for that when you look at at&t with time warner and fcc with broadcast and how in today's modern media world, we have to treat it differently. the fcc will be voting on something relating to ownership rules later this year. people are asking that very question which is given all the other changes in the marketplace and you have companies like this america and still not have a negative competitive effect. it would have a problem getting through but ill not s will not unthinkable. >> what david faber was reporting is that disney will get most of 21st century of fox assets but would not get fox news or business or etcetera, or fox sports part of the reason being with disney controlling espn, they would have difficulty acquiring sports network does that make sense to you when you are sad viadvising these companies, don't even both ere with these companies >> at this point, they may since it is the primary network that they watch live and that changes everything in terms of audience and advertising share. certainly, when ever you announce the merger, you have to ask a question, should we affirmatively announce to see what we can do to get the deal or should we wait to get allow to get through with no conditions and wait and see what the government is asking for i think in this case, to make sure there is no consolidations. >> what would the federal communicatio communications commissions or regulatory purview be merging disney studios with some disney channels and other distributions -- where would the fcc touch this >> first of all, there is ownership of broadcast stations. >> those are all off the table, we understand. >> those are off the table >> yes >> then you would have the same situation of at&t and tame warner and the fcc is not reviewing it i would could be whether they structure it in that way i think there is a way that the fcc could search jurisdiction but given the way they done away from at&t deal, they are unlikely to search jurisdiction. it is a lot easier to get done you still have the political problem and remember late in the campaign when the at&t bill was announced a little more than a year ago, trump said there is too much power concentrated in the hands of two feuds i don't think they're going to do it but one wonder how political pressures evolved after the att deal >> what dow ma you miesk thake e headlines that doj was thinking of some kind of suit relating to at&t and time warner yet, there seems to be something going on how do you read between the lines there, what's happen sng. >> the doj does not announce they're about to block the deal. that's not the way they did it with comcast and time warner cable. it strikes me however, sometimes people say hey, companies are not taking it seriously enough when we say we really need you to do certain thing to limit the competitive effectiveness of this deal. this was a way of sending a sign signal the other thing that's going on there is that the new head of the antitrust division is trying to signal to everything that he's open minded and everything is on the table but they are considering everything part of the reason he's doing that is he spoke of the deal when he applied to lawyers senator warren got upset about that he's signaling to people that he's open but that's very different. it could be misinterpreted but it is very different than getting the government to, you know, preparing for litigation on a vertical deal >> blair levin, it is a pleasure to have you. don't be a stranger. >> thank you very much joining us is our fast money is guy diamond -- guy adami. >> what's your take? >> i think that's what you are seeing here. obviously when i speak of a common economy, i am speaking of netflix, for me, this is just a task acknowledgment by disney, we have to do something and we have been sitting in our hands the next five years. i don't think they are taking netflix as seriously as they should of. not to suggest this is what happens. i think this is what's going on by the space why disney is hired because the entire sector is revamping on what's going behind the pipes. yes, i have about a seven years start, as much as you guys think you can compete with us, it is not going to happen. the talks right now are not on this tells you that disney is forced to do some deals of the non news a non-news and non sports asset. you got to do something to beef up the direct consumer often before, the stocks are not doing much >> mel, what are we doing everyday at 5:00. >> eat candy >> we do a show called "fast money kw money. i know we made comments that disney would be smart to buy netflix here i think it is exactly that disleon disney is now -- it is great they are acknowledging, the best time is to plan 23 years ago you cannot speak to timing what i will say is i really think and i know netflix is lower and i understand why netflix is lower if you really think about it and what this is saying to me is the entire space is scrambling and netflix is sitting at the top of the pile >> they say build it or buy it so they did not binet fliuy netx it sounds like this is an effort to jim cramer's point earlier. nobody is talking about the hemorrhaging of espn anymore now we are talking about where are they going if they were to do this deal >> we are talking about this seemingly of the last 18 months, i would submit it is of a price of a stock and we'll move forward to espn but what it does speak to is the need to have more of a netflix model and the need to have scale i will tell you this as well well, i will put this out there and twitter is about to get on me in a major way. apple's sitting back and looking at all this and one has to wonder, does apple finds any of these assets interesting and does apple get into this game? >> especially if they get a break on their repatriation money that they brought back over seas. >> you are reading my mind mcc, that's why i dig you >> here is where guy is missing a little bit i think disney and comcast would argue they got a competitor, it is hulu. >> and awesoll of a sudden, then 60%. >> athey probably don't want and you wonder if that's part of the strategy and you are already buying control of -- it is not netflix but hulu is not a shr k shrinking violet either. >> the last time i looked, people were not talking about huluing or chilling over the weekend. >> netflix is becoming the jello and the cq-tips and band aids once you have that lead, it is difficult to give up >> amazon is in here, too, guy >> tyler, i didn't know you are there my friend. >> there is a lot of people are on the game. >> why you see the name like viacom rally, maybe the evaluations may be up a little bit. if there is any tykeake away fr guy adami here is that netflix is doing everything right and we all need to catch up >> guy, we'll see you at 5:00. >> cannot wait >> after the break, michael wolff weighs in talking. both trading around sessions high, "power lunch" returns after this stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and. hello everybody, i am sue herrera. a judge ordered manafort and his business aid gates remain under house arrests. both pleaded not guilty to money laundering john kerry says the iran nuclear agreement is working he made his comment in london. >> the iran nuclear agreement is working. it is doing precisely what it was set up to do i have heard some people including the president of the united states say it is a violation of the spirit of the deal well, there is one of the principles negotiators of that gre agreement, let me tell you there is no spirit of the deal senator mccain tweeted out, "i cannot begin to dell you how much i hate wearing this boot. >> the senator has been diagnosed with cancer. lets wish him the good luck. >> he's one tough cookie. >> he is 21st century fox have been holding stocks to sell most of its stocks to disney joining us on the phone is michael wolff, author of the man who owns the news inside the world of rupemerdoc >> i would like you to focus on the television network of fox and fox news and fox business in the likes and fox sports and whether those are the ones that are really important to rupert murdock and whether he will take that company private >> i think it is logical and certainly the folding in of the newspaper company is the one way and the only way that rupert murdock protect what he regards as his real legacy >> if you don't mind, i would like to single something else out on this deal and focus the lights on television in the u.k. because for the past year every insider has basically said that the future of what was going to happen in this company was very much tied to the deal. would they be able to buy the portion of sky that they don't own. they own 39% they want to trade up to 100%. that deal has been a tricky deal given to u.k. regulators i have heard again and again that two things have been hitched to that deal the future of james murdock within the company and the nature of the company itself if they don't get that deal, i have been toll over and over then everything that's all bets are off. it was always influx i think that what has been clear to a lot of people over the past couple of months, that deal is not going to happen. >> so that's why the sky assets would be included in the purchase by disney >> sky and star. >> exactly >> sky was their way to get what they are calling scale it reconfigure the nature of this company without that deal, they don't know what the company is plus, that deal was very much hit to james murdock, he had a vision for this company which involves the acquisition of sky. without that, it really defaults that his brother, lockland that's the tension between james murdock and lockland murdock, of the company under their father >> sorry, i was going to ask you to speculate there is a buyer and a seller. do you think there is a situation where the murdocks realize that the strategy is not working and went out and sell the company and do you think disney find these attractive enough to approach and eventually sending them packing. even if this deal was not work, we could see another buyer, if they are intent on shrinking the company and more than they have >> i think it is the former. and i think it is a locland/murdock deal in conjunction with his father. lo lockland and his father against james murdock. >> without the sky deal, it reverted to rupert and lockland. rupert because he's 86 years old and lockland does not have a vision and looking to shrinking these company. >> so bottom line, these assets are on sale regardless of who's buying it. >> lets say michael, who the buyer may end up being, what kind of company do you think 21st century fox becomes two or five years down the line >> i think it is probably unclear. i think it focuses on news asset and television network and television station and you have a highly profitable, potentially successful for years to come, media company. it is just not any longer and it is crucial the global blockbuster power house that a younger rupert murdock imagine build and his son james murdock thought he could double and quadruple and continue to grow >> lets say the deal is going to happen, do you see either one of them would go to disney? >> no, not for a single second these people are rich, richer if the deal happens >> so they don't need to work for a living >> i can go to disney when ever they want. >> as soon as they win the game. [ laughter ] >> as soon as they win the game. >> i sat with murdock a number of years ago and he sketched out a future that he could envision in which of his children took ass assets from the company or took cash out of the company and then in turns built their own company. michael, you have been such a wonderful web of intrigue, i thought you were talking about saudi princess and kings >> we can talk about that. >> that's a big one, thank you very much as always. it is nice to hear from you. michael wolff. i want to take a break, we got 11 minutes left, we'll give you more after this. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. his family. his steinway, which met a burst pipe. so grant met his insurance: you are caller number 12. which didn't quite cover the steinway. but what if he'd met pure insurance? owned by members. he'd have met: lisa, your member advocate. who'd introduce him to gustav, a temporary address, and help him get tickets to the mozart festival. excuse me, grant likes beethoven! uh, the beethoven festival. pure. love your insurance. more on the developing story at disney held talks to buy most of 21st century fox's assets joining on the phone, analyst at pivotal research got a sell on disny, a buy on fox. brian, great to you with us. if the deal goes through as we understand it to be, would your rating on disney go up >> all depends on the valuation of the transaction and other terms, so it's impossible to say ahead of time. you know, disney still is going to face a lot of challenges if the transaction such as the one ahead, not least of which includes a ceo succeacuccessionn we imagine scenarios which look really good, you know, that make the company all of a sudden more favorable, maybe there's massive synergies they can realize everything's possible, but, you know, the bigger issue, i have a buy rating on fox. almost uniquely among my coverages here you know, the bigger issues that all the questions this raises about what exactly they are thinking because it really raises a lot of questions going so far off of the strategy that fox has been pursuing for so long to be expansionary, and, you know, we'll hopefully get some clarify oiication on that. >> sounds like the basic premise you have behind having your rating on fox has gone away, basically. >> no -- >> this -- >> a game changer. still tremendous value it really depends if they're planning -- >> even to it's just the news and sports assets? >> well, the news and sports assets i don't think are as attractive as the bigger enterprise we need to hear from them what they have in mind. i can make up a scenario, to be clear, completely speck lulatin here can we imagine a scenario where all of a sudden, you know, the strategy is consistent, they're just going to go execute it somewhere else okay that helps make a little more sense of what they're thinking, as a company, as individuals behind the company, but, yeah, if you look at just the core news and sports businesses, you know, news and sports, you know, fox news has long-term strategic challenges some scale relative to a cnn, they have demographic problem, let's just say, over the long run, that they're going to face. sports rights are not going to get cheaper any time soon. that's some what's negative on the long run again, it comes down to what the fair value is based on the businesses it's put in front of us. >> what about the businesses that david faber's talking about that disney could buy? laura martin, we had her on earlier, not to mention, one of your competitors she thought $20 billion would be a possible price any thoughts on what those assets are worth >> you know, it's hard to say. it really just depends on -- we don't have specifics for most of those businesses so it's impossible to say. i think we can say reasonably clearly i think that it's a majority would be going with the assets that are attributed to the transaction and then you have the value of sky, and really depends is -- does that go with whatever assets would be sold, vice, all their other smaller stakes so until we know more information, it's really hard to, you know, it's pure speculation at this point. >> what is the value of the television network and the television o&o stations that fox or news corp. would -- excuse me, that would -- presumably be retained by the murdock family. >> yeah, my guess it's a my t r minority of the overall company. the problem with the broadcast stations is because they have to spend so much on sportsmargins you get growth because of retransmission consent fees but it's not going to be a long -ter growth business necessarily the same internationals planning to do with the sky transaction if that were to go through. >> right. >> direct to consumer competitive offering that they would be expanding globally. >> ve to -- >> all sorts of -- >> we have to wrap it up, brian, i'm so sorry to interrupt. we got 14 seconds left here. thank you so much, brian wieser. >> fascinating deal. thanks for watching "power lunch. >> "closing bell" starts now i bet i know what they're going to talk about during the show, too. our coverage of this mega media deal does continue welcome to "the closing bell," everybody, i'm kelly evans at the new york stock exkachange. >> i'm bill griffeth if you're just joining us, breaking news from our colleague and friend david faber this afternoon, disney h holding talks to buy most of 21st century fox. we have the details and whether any deal like that would be able to go through. that's coming up momentarily here meantime, two frenemies working together, intel and amd are teaming up to take on the high-flying stock of nvidia. we'll tell you what the partnership could look like.

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