With $52.4B deal, Disney bets big on streaming
Company plans to buy assets of Twenty-First Century Fox
LOS ANGELES — The Walt Disney Co. said Thursday that it had reached a deal to buy most of the assets of TwentyFirst Century Fox, the conglomerate controlled by Rupert Murdoch, in an all-stock transaction valued at roughly $52.4 billion.
While the agreement is subject to the approval of antitrust regulators — and the Justice Department recently moved to block a big media company from becoming even bigger — the once unthinkable acquisition promises to reshape Hollywood and Silicon Valley.
Disney now has enough muscle to become a true competitor to Netflix, Apple, Amazon, Google and Facebook in the fast-growing realm of online video.
At the same time, the agreement means that one of moviedom’s most celebrated studios, Twentieth Century Fox, will be downsized, with some operations folded into Walt Disney Studios or refocused to make films for online distribution.
To complete the integration, a legacydefining task, Robert A. Iger, Disney’s chairman and chief executive, agreed to renew his contract for a fourth time, delaying retirement from July 2019 to the end of 2021. Murdoch asked Iger to stay as a condition of the deal, which was valued at $66.1 billion including debt.
Not included in the acquisition: Fox News, the Fox broadcast network and the FS1 sports cable channel. Murdoch said he would spin those businesses and a handful of other properties, including the Twentieth Century Fox lot in Hollywood, which Disney is not buying, into a newly listed company.
Disney, which owns ABC and ESPN, hopes Twenty-First Century will supercharge its plans to introduce two Netflixstyle streaming services. The company’s first major streaming effort, ESPN Plus, will arrive in the spring. A second and still unnamed offering, built around the company’s Disney, Marvel, Lucasfilm and Pixar brands, will roll out late next year. Rounding out its streaming portfolio will be Hulu, the already established service that focuses on older viewers with programming that includes ABC shows.
Iger is buying Twenty-First Century Fox’s minority stake in Hulu, resulting in majority control of the streaming service by Disney, which previously owned 30 percent. Comcast and Time Warner also have stakes in Hulu.
Disney also is purchasing the Fox television studio, which has 36 series in production, including The Simpsons, Homeland, This Is Us and Modern Family.
Disney also will get the FX and National Geographic cable networks, as well as stakes in two behemoth overseas TV-service providers, Sky of Britain and Star of India. That component of the deal would seem to contradict Disney’s push to lessen its reliance on traditional TV, a business built on third-party cable subscriptions that is now in decline as people turn to streaming services.