Welcome to our last Top 10 of 2017! This week’s news includes; Disney to buy Fox, Bitcoin futures launch and Apple to Buy Shazam.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week;
- The Guardian asks if Monzo is the Facebook of banking?
- City A.M questions whether a soft Brexit is compatible with regaining sovereignty.
- The Guardian looks at Right Move’s claim that London house prices will fall in 2018 and throughout the rest of England prices will only rise by 1%
- CNN claims that the Bitcoin boom could be a disaster for the environment.
1. DISNEY TO ACQUIRE FOX
Disney has signed a $52 million deal to acquire assets 21st century Fox. The entertainment giant will buy Fox’s film, TV and international business. Analysts do not expect substantial resistance from competition regulatory authorities due to Disney’s lack of market share. The deal should be completed within the next 18 months.
Disney is looking to challenge Netflix and Amazon in the online streaming business. Amazon and Netflix plan to spend $4.5 billion and $8 billion on streaming content over the next year.
Check out Reuter’s report for an insight into the deal and the online streaming sector.
2. WESTFIELD SHOPPING CENTRES SOLD
Westfield Shopping Centres have been purchased for £18.5 billion. French property giant Unibail-Rodamco is making the acquisition, taking their property portfolio value up to a staggering £54 billion. The deal includes Westfield Shepherd’s Bush and Westfield Stratford. A new Westfield shopping centre is due to open in Croydon in 2020/21.
This news comes only a week after Hammerson bought out Intu for £3.4 billion. (Sky News)
The Independent asks whether have we reached peak shopping mall.
3. BITCOIN FUTURES
Bitcoin futures contracts have been launched for the first time ever. The move has well and truly thrust the cryptocurrency into the mainstream. At 11pm last Sunday, Bitcoin futures launched on the CBOE futures exchange in Chicago. On the CBOE Bitcoin futures contracts expiring in January started trading at $15,000 and quickly rose to over $18,000.
A futures contract allows investors to bet on whether the price of an asset will go up or down. They work by agreeing to buy or sell an asset at a set amount at a certain date. If they successfully predict the market value they will either buy for less or sell for more than market value.
The German stock exchange, Deutsche Boerse, is now also considering offering Bitcoin futures. City A.M looks closer at this.
The growth of Bitcoin has divided opinion throughout the financial world. A single Bitcoin was $1000 in January 2017. it is now worth roughly $20000. Check out our articles; When Will The Bitcoin Bubble Burst? and for an introduction to cryptocurrency Bitcoin: What You Need To Know .
4. APPLE ACQUIRES SHAZAM
Apple has announced that it will be acquiring music discovery app Shazam. Shazam is an app that listens to music played and tells users the details of the songs and where to find it. Shazam has roughly 100 million monthly users.
It is believed that Apple will pay roughly $400 million for Shazam. This price however, falls far short of its $1 billion valuation in 2015. Apple has long been seeking to boost its presence in the music industry. Apple Music only has around 50% of the number of active users that its main rival Spotify boasts. Shazam will only refer users to Apple Music.
5. FACEBOOK DROPS THE DOUBLE IRISH
Facebook has announced that it will not route its tax through Ireland anymore. This is a move that will go some way to relieve criticism about its tax avoidance arrangements. Revenues it generates will now be reported locally, not through Ireland.
Large multi-national companies set up a tax arrangement called the “Double-Irish”. This is where they report revenues they make from other countries in Ireland where corporation tax is 12.5%. Apple, Google and Facebook use this loophole. The Irish government has however, committed to closing this loophole by 2020.
This news comes only a week after Ireland agreed to collect 13 billion euros in back taxes from Apple. City A.M looks at the reactions to this decision.
6. UK ECONOMY
Inflation in the UK is on the rise so interest rates remained unchanged. Inflation hit a new high of 3.1% in the last quarter. This was largely driven by increases in airfares as well as food and drinks. The collapse of Monarch allowed many other airlines to their hike prices, contributing to this rise.
Most pertinently, wages have failed to rise substantially, putting serious financial pressure on households. Wages in the UK only rose 2.5% in the last quarter. The Governor of the BoE, Mark Carney now must write a letter to Chancellor Philipp Hammond explaining why inflation has breached 3%.
The Bank of England voted last Thursday to keep interests at 0.5% after an increase last month. There was no appetite for a rise due to inflation and substantial household debts.
Unemployment however, has hit the lowest level since 1975. The unemployment rate fell to 4.3% but this was largely due to an increase in economic inactivity. The employment rate has however, fallen by 56,000. (The Guardian)
7. BT AND SKY SIGN CHANNEL SHARING DEAL
BT and Sky have signed a deal to sell each other’s channels on their platforms. BT’s sports will now supply its sports channel to Sky and Sky’s Now TV will be available on BT. Growing costs and increased competition has required great collaboration between these media giants.
The costs of broadcasting rights have Sky rocketed. BT has spent over £3.5 billion in the past 5 years for the rights to broadcast Champions League and Premier League. Sky has paid £4.1 billion for 126 Premier League games between 2016 and 2019.
This deal undoubtedly comes to mitigate the impact of these costs and will be mutually beneficial for their both their balance sheets. BT suffered a 1% decline in profits last quarter, largely because of the increased costs of broadcasting rights.
The value of the agreement has not been disclosed. BBC News looks closer the deal.
8. UNILEVER SELLS MARGARINE BUSINESS
Unilever has agreed to sell its margarine business for £6 billion. Private equity firm KKR will acquire the business including household brands such as Flora, Bertolli and ProActiv. Unilever is looking to reduce costs by 20% by 2020 and this is just one of many cuts to achieve this.
The deal is still subject to regulatory approval but is expected to be completed by mid 2018. (BBC News)
9. EU’S EXTRA FUNDING TO COMBAT CLIMATE CHANGE
The European Union has pledged an extra 9 billion euros to tackle climate change. The money will go towards developing clean energy, substantial cities and other initiatives. This is one of the most notable steps aiming to reach the objectives set out in the 2015 Paris Agreement.
European Union itself and its members contribute 20 billion euro a year to aid developing countries with climate change initiatives. Read the Guardian’s report for more about the investment in climate change initiative.
10. UK WATER BILLS
The cost of water usage in the UK is set to fall after the introduction of new regulations. Ofwat, the water industry regulator has said that. This will reduce the average annual household water bill by £15-20 a month in real terms. Ofwat is planning to force suppliers to pass the savings they make from reduced costs onto their customers.
Water suppliers pay for the “cost of capital” and this is set by Ofwat. Oftwat will be carrying out a price review in 2019 and is set to reduce this to 2.4%, a record low. Sky News’ report looks at some of the commentary on this decision.