Disney puts Netflix on notice with $52B buy of key Fox assets
Disney CEO Robert Iger has made a grand addition to the house that Walt built.
The Walt Disney Co. said Thursday it had reached a
$52.4 billion deal to acquire a huge swath of assets from
21st Century Fox, including the historic 20th Century Fox movie studio, which has produced such classics as
Miracle on 34th Street, Alien, Titanic, Avatar and the original Star Wars film.
Also as part of the deal, Disney would get Fox’s television studio ( The Simpsons, Empire) and FX and National Geographic channels. Another acquisition within Fox’s film division is Fox Searchlight, which has an Oscars hopeful in current film Three Billboards Outside Ebbing, Missouri.
This massive content influx sets up Disney for the future and its planned direct-to-consumer streaming services, as it goes head-to-head with giant Netflix and other streaming heavyweights. It’s planning the ESPN Plus sports subscription service next year. And in 2019,
when it removes its content from Netflix, it will unveil a Disney streaming offering with its newest Disney, Pixar, Marvel and Star Wars feature films and related TV series. The deal adds Fox TV and movies to the mix.
“This clearly will jump-start those efforts (and) give us more content, give us more producing capabilities for those services,” Iger said on Good Morning America Thursday. “We are not really looking to necessarily reach the scale of Netflix quickly, but we certainly aim to be an able competitor to theirs.”
Disney concurrently announced Iger would remain in his post through 2021, further extending his stay amid uncertainty over a prospective successor.
The combination results in “one of the greatest companies in the world,” 21st Century Fox executive chairman Rupert Murdoch said in a statement.
The new 21st Century Fox maintains control of the Fox television channel, Fox News Channel and the Fox Sports channels including the Big Ten Network. The sale will streamline Fox’s existing holdings to focus more on news and sports.
Disney is already a media and entertainment giant, with ABC, ESPN, Pixar and the Marvel and Star Wars film franchises in its portfolio. Last year, Disney was the first studio to take in more than $7 billion at the box office globally, with films including Rogue One: A Star Wars Story, Captain America: Civil War, Finding Dory and live-action film The Jungle Book.
Despite Disney’s already well-stocked portfolio of characters and franchises, it’s not enough. Every major media player is trying to figure out where it fits in a rapidly changing landscape. The largest telecom and cable companies — AT&T, Comcast and Verizon — have been snapping up companies that either break into markets (say, AT&T buying satellite TV provider DirecTV) or give them movies, TV and digital news sites to sweeten their subscription offerings.
Verizon bought Yahoo last year, Comcast owns NBCUniversal and AT&T is trying to complete a $85 billion deal for CNN owner Time Warner. Plus, Disney and other traditional media companies are jousting for better leverage against Netflix, Hulu, Amazon and other online services that deliver movies and TV series to homes that increasingly bypass the traditional pay-TV providers.
Disney will now own a 60% stake in Hulu, which like Comcast (NBCUniversal) and Fox held a 30% stake in the service, with Time Warner holding 10%.