How Disney Owning FOX Will Affect the Entertainment Industry

 

 

It’s happening!

 

The Deal

Last week, the Walt Disney Company’s $71.3 billion bid for 21st Century Fox was approved by shareholders from both companies last week, clearing one of the biggest obstacles remaining to complete the mega-merger. After Comcast dropped out of the bidding and the Justice Department approved the Disney-Fox merger. However, the deal still needs to complete the regulatory process in several other countries, namely China.

Last December, Disney announced its $52.4 billion deal to acquire most of 21st Century Fox, with some assets—including Fox Broadcasting, Fox News, Fox Sports and Fox Business Network—to be spun off into a different company tentatively called New Fox. Comcast decided to pursue Fox, with a $65 billion offer on June 13. But Disney countered by raising its bid to $71.3 billion.

 

The approval paves the way for the creation of a mega-behemoth entertainment company, combining many top-flight content brands and two of the world’s largest movie studios whose films all together commanded half of all box office receipts year-to-date, according to Box Office Mojo.

 

Disney-Fox would own Walt Disney Studios (Marvel, Lucasfilm, Pixar); Disney theme parks and hotels; ABC TV stations; A&E networks; Disney Channels; ESPN, Disney products and stores, music and publishing; Twentieth Century Fox studio; Fox’s TV production (“The Simpsons,” “Modern Family,” “This is Us”); cable networks FX, FXX, FXM and National Geographic channels; Star India; more than 350 international channels; 39.1% of pay TV provider Sky; controlling ownership of Hulu; and other assets. Their movie slate would include Avatar, new and earlier Star Wars films and unites Fox’s Marvel films — X-MenFantastic Four and Deadpool — with Disney’s Marvel properties. (Fox is spinning off its broadcasting and cable networks and the bulk of its sports channels.)

 

The Reason

Disney’s main reason for buying Fox is to have additional branded content for online, direct-to-consumer content services. “This acquisition reflects a changing media landscape increasingly defined by transformative technology and evolving consumer expectations,” said Disney CEO Bob Iger during a conference call with analysts to discuss the acquisition. “It will allow us to greatly accelerate our direct-to-consumer strategy. … We believe creating a direct-to-consumer relationship is vital to the future of our media businesses, and it’s our highest priority.”

 

Disney has also recently launched ESPN+, a new $4.99 a month streaming service, and plans to offer another next year that will house Disney, Pixar, Star Wars and Marvel movies plus exclusive films and TV shows. As part of this development, Disney has said it would stop licensing Disney movies to Netflix starting in 2019. Netflix grew by licensing older content from companies like Disney. But now Netflix has gotten so big that it is challenging the big media companies themselves.

 

It’s likely that Fox’s entertainment assets will be split among Disney’s small handful of subscription video on demand services: it’s own family-friendly streamer launching later this year, its controlling stake in Hulu post-Fox merger and ESPN’s new standalone streaming service ESPN+.

 

 

The Result

On the movie side of things, Disney will have the opportunity to carry out Fox’s four planned Avatar sequels if they so choose, which represents potentially massive broad appeal. The Alien film franchise is running out of steam but remains a high-profile title. Why not spin it off into its own sci-fi horror streaming series for Hulu? How many hours of uninterrupted viewing can Disney generate with the back catalogs to hit shows such as Modern FamilyFamily GuyFargo, American Horror Story and more?

 

This move gives them immense flexibility as well as leverage; it opens up a wealth of possibilities connected to established and popular concepts with built-in followings that run the gamut of demographics.

 

Of course, the biggest thing that Marvel comics and movie fans are excited about is the fact that X-Men and Fantastic Four characters will finally be able to join the Marvel Cinematic Universe. But that isn’t the only major content property Disney will acquire in this deal.

 

Here’s a short list:

 

The Simpsons
Family Guy
Avatar

American Dad!
King of the Hill
Bob’s Burgers
Alien
Predator
The X-Files
American Horror Story
Ice Age
Rio
The Peanuts Movie
Ferdinand
Home Alone
Miracle on 34th Street
The Sound of Music
Planet of the Apes

Modern Family
Futurama
24
Buffy the Vampire Slayer
Star Wars

Disney will now own 100% of the distribution rights for the original Star Wars trilogy, meaning they could release Blu-ray versions of the original trilogy that features the original theatrical release.

 

When George Lucas sold his company, Lucasfilm Limited, to the Disney corporate empire, he could only sell the assets that Lucasfilm owned outright. That includes the five Star Wars films that Lucas self-financed after 1977, as well as the animated series which was still in production for the Cartoon Network cable channel, the Indiana Jones franchise, and other Lucasfilm properties. That did NOT include Episode IV (a.k.a. the  original Star Wars).

 

In exchange for a very low fee for directing and writing Star Wars, Lucas gave 20th Century Fox the copyright to the film, provided that Lucasfilm, was given the licensing rights for merchandising, publicity, and the rights to any sequels, be they feature films or TV series.

 

20th Century Fox, in return, would get distribution rights on any Star Wars film Lucasfilm might make if the first one was even a modest success. The sequels, therefore, were owned outright by Lucasfilm; Fox became distributor only. And now Disney owns them all. The circle is now complete.

The Reactions

Social media reactions to the news have been varied, to say the least.

 

 

 

 

 

 

 

 

 

 

 

What are your thoughts on this latest acquisition by the House of Mouse?

Jamison Ashley

Comic geek, movie nerd, father, and husband - but not necessarily in that order. Current captain of this ship o' fools who is rapidly training everyone's computers and snarkphone spell-checkers to misspell 'supposebly.'

JUST KEEPING THE LIGHTS ON