As predicted, Disney CEO Bob Iger has also extended his contract with the company for another two years, through the end of 2021, to oversee the transition.
"The acquisition of this stellar collection of businesses from 21st Century Fox reflects the increasing consumer demand for a rich diversity of entertainment experiences that are more compelling, accessible and convenient than ever before," said Iger. "We’re honored and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building, and we’re excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings. The deal will also substantially expand our international reach, allowing us to offer world-class storytelling and innovative distribution platforms to more consumers in key markets around the world."
The deal is one of the largest in recent history and one that will forever change the makeup of Hollywood. CNBC first reported on the talks in early November but at that time indicated that the talks had cooled between the two with Fox was now pursuing other interested parties including Comcast and possibly Verizon. Once Comcast was confirmed to be no longer in the negotiations it was clear that the Disney talks were back on.
For Disney, the Fox buyout fixes many issues that plagued them for years. It means that Disney now has control over the few remaining parts of Marvel that they don’t already own including X-Men, Deadpool, and Wolverine. They also now have the distribution rights to Fantastic Four, while a small Germany company, Constantin, still owns the production rights. With Disney’s massive success with Marvel having, even more, Marvel characters and storylines to work with provides the company with tons of new material.
Other important franchises in the sale include Titanic, Modern Family, X-Files, Alien, and the television rights to Batman. Disney already has the theme park rights to Avatar, the highest grossing film of all time, but the deal gives them, even more, control over the brand. Fox also is one of the key production companies for The Simpsons, Family Guy, This is Us, and Empire. All of which are assumed to be included in the sale to Disney. With this deal, Disney now has seven of the top ten highest grossing films of all time, including the top 3. Fox also owns Blue Sky Studios, a computer animation film studio with such hits as Ice Age, Rio, and Ferdinand (which will open in theaters tomorrow).
Fox also kept some rights for the original two Star Wars films; the deal now brings those rights to Disney.
The cable channels, outside of Fox News and Fox Business, are also part of the deal. This gives Disney ownership of FX, FXX, National Geographic Channels. It’s unlikely we’ll see any major Disney rebranding of most of the channels, instead of running them in a similar way as they do A&E or History, both of which they own 50 percent of (a joint venture with Hearst Corporation). Fox Broadcasting will remain part of what is left at Fox since federal regulations ban a company from owning two broadcast networks in the same market.
The 73 percent ownership of National Geographic will be transferred to Disney. Disney is familiar with nature programming, it
The more important television part of the deal is what it includes internationally. Star India, an Indian entertainment company, has dozens of channels in Asia with a network reach of 650 million viewers in India. Fox Networks Group also has over 300 channels including dozens in Latin America, Asia, Africa, and Europe.
British-based Sky PLC is also included. Currently, Fox owns 39% of Sky, but they are in the middle of an attempted takeover of the media streaming and broadcast company.
Joint press releases confirmed, "21st Century Fox remains fully committed to completing the current Sky offer and anticipates that, subject to the necessary regulatory consents, the transaction will close by June 30, 2018."
Altogether, Disney will now own or operate 272 TV stations.
While Marvel and television are important to Disney, the two most significant reasons for this buyout is sports and streaming. Disney CEO Bob Iger has tried to build a successful streaming platform for Disney for years. In August, Disney paid $1.58 billion to acquire an additional 42 percent stake in BAMTech, on top of the 33 percent stake it already owned. BAMTech was developed by MLB to stream baseball games but was spun off into its own company. It oversees the streaming services for HBO Now, the PGA, NHL, and WatchESPN. When the deal was announced Disney also confirmed a new ESPN streaming app to be launched in 2018. The new streaming app will offer numerous local, national, and international sports events.
In recent months Disney has also announced a new streaming video service that will compete against Netflix. That program may now be put on hold since the Fox deal gives Disney a majority share of Hulu (Fox owns 30 percent and Disney currently owns 30 percent, with the Comcast having 30 percent and Time Warner/Turner owning the final 10 percent). According to Barclays Disney now has 46 million streaming or cable subscriptions split between Hulu, Sky, and India’s Tata Sky. This is still much lower than Netflix’s 109 million customers globally but with access to the massive libraries or Disney and Fox Disney would have more content than Netflix.
Access to the content between these sports networks will help bolster the ESPN streaming app if Disney chooses to provide that content within the app.
Speculation on what the buy will mean for employees at the two companies has been mixed with many expecting Rupert Murdoch's son James Murdoch having a roll at Disney and possibly aligning him for the role of CEO after Bob Iger. Speaking to ABC's Good Morning America Bob Iger stated, "James and I will be talking over the next number of months. He's going to be integral to the integration process, and he and I will be discussing whether there is a role for him or not at our company."
There’s still a long way to go before the deal is a sure thing but with Fox keeping the news channels, local broadcast networks, and Fox Sports it looks likely that federal regulators will approve the deal. It’s estimated that final approval for the deal will take around one year with approvals needed in numerous countries including the United States, the U.K., and India. Disney CEO Bob Iger will extend his time at the helm until at least 2021 to help oversee the buy and merger.
In the meantime, we can focus on the tit-for-tat rumors of Comcast buying out Warner Brothers.