Disney Buys Fox in the Deal of the Century

A Disney acquisition of 20th Century Fox would see assets divided among divisions

Two of the largest entertainment companies in the world joined forces this morning as the Walt Disney Company buys 21st Century Fox in a $52 billion mega-merger that creates the biggest entertainment company the world has ever seen. Disney’s purchase of the studio involves a $52.4 billion all-stock deal to acquire the 20th Century Fox film studio, along with their other sports and entertainment networks from Rupert Murdoch. Adding up all the cable and streaming service subscribers, Disney will start the new year with 46 million subscribers around the world.

This new deal strips Murdoch of control of the cable channel FX, a number of top rated television and movie comic book franchises, NatGeo, and the first released episode in the Star Wars cinematic saga (all the episodes are now under one roof). It also gives Disney control over iconic series like The Simpsons and Futurama, as well as exciting new series like The Orville. The sale leaves Rupert Murdoch’s empire with the market-challenged Fox News, which was apparently of no interest to Disney.

Disney CEO Bob Iger

The splintered Marvel Cinematic Universe, owned variously by Fox, Disney and Sony Pictures, can now be largely unified. The X-Men can finally meet the Avengers, for example. Spider-Man has already been re-versioned, and it’s not hard to imagine the Fantastic Four following the same path — and since Disney already owns Marvel Comics, getting the licensing to do it shouldn’t be a problem. It’s important to note, though, that Sony’s option on the Spider-Man franchise never expires, so long as they make a new film every four or five years, but this new deal puts Sony in a hard place. They’ll have a real battle on their hands competing with the awe and might of the new Disney/Marvel/Pixar/Lucasfilm/Fox juggernaut.

It will also give Disney a majority stake in Hulu,  and it will add classic films from 20th Century Fox’s extensive holdings like The Sound of Music to the Disney library.

The Disney streaming channel will launch in 2019, and since they already own Hulu, expect to see some changes there. Before the merger, Disney’s new channel would have had a challenge in being Yet Another Single Studio Streaming Service, but now they’ll have content coming out their big round black ears.

Disney’s CEO Bob Iger is the prime architect of the deal, who, since taking over in 2005, has expanded the company’s theme parks, opening Shanghai Disney Resort, and acquiring popular creators like Marvel Comics, LucasFilm and Pixar.

There are some loose ends to clean up. The deal still faces scrutiny from shareholder approval by 21st Century Fox and Disney shareholders, has to pass muster under the Hart-Scott-Rodino Antitrust Improvements Act, and a number of other regulatory reviews, some of which come from foreign jurisdictions.

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