Disney announced today that it will acquire a major portion of 21st Century Fox in a $52.4 billion equity deal. As part of the deal, Disney will own 21st Century Fox’s film and television studios, some of its cable networks and international TV companies, as well as popular titles including The Simpsons, X-Menand Avatar. The deal represents a massive shift in content ownership in Hollywood, giving Disney even more titles, characters, and stories to build on across all of its existing properties and any new services the company debuts in the future.
Disney has not fully acquired 21st Century Fox — the deal focuses on the company’s entertainment business. 21st Century Fox has announced plans to spin off its news and sports broadcasts into a new company called “Fox”. This company will focus on news and sports and will include Fox News Channel, Fox Business Network, FS1, FS2 among others.
If the deal is approved by regulatory authorities, it will expand Disney’s already massive content pool even further. The company will own cable channels including National Geographic, FX Networks, Fox Sports Regional Networks and international networks such as Star TV and Sky. 21st Century Fox is expected to complete its acquisition of Sky, a popular network in the UK and Europe, in mid-2018. If and when it does, Disney will take full ownership of Sky.
This also has implications for the Marvel comic book universe. 21st Century Fox retained some character rights even after Disney bought Marvel in 2009, but this deal would bring with it all those rights, including those for X-Men, Fantastic Four, and Deadpool, back to Disney. Crossovers between worlds are also possible, and may be likely, as Disney notes in its press release that the deal will see the company “create richer, more complex worlds of interconnected characters and stories that audiences have shown they love.”
Disney’s content grab is about more than just building complex worlds and new stories. The company plans to debut its own streaming service in 2019, and this deal gives Disney even more content to bolster it with. That streaming service will compete directly with Netflix, a company that has focused more on creating original content rather than acquiring existing titles. Netflix pledged to spend $7 billion to $8 billion on original content in 2018 in the hopes of supporting hit series such as Weird stuff and The crown.
2019 may be far in the future, but Disney is already making steps to separate itself and its content from existing services. The company has already won major titles, including: Star Wars from Netflix, and it’s likely that other Disney content will eventually disappear from Netflix and other services well before its own streaming service debuts.
Another interesting outcome of the Disney-21st Century Fox deal is that Disney will have a majority stake in Hulu if the deal is approved. Disney already owned 30 percent of the streaming service, while 21st Century Fox owned another 30 percent. It’s unclear how Disney will treat Hulu in the future, especially after the upcoming streaming service’s launch.
But the deal still needs regulatory approval before this content can be shuffled. While Comcast was approved to buy NBCUniversal in 2011, the Trump administration has been trying to block AT&T’s purchase of Time Warner. It could be more than a year before we know if Disney and 21st Century Fox can close the deal.