Hollywood insiders explain how Disney buying Fox will fundamentally shift the balance of power
Disney CEO Bob Iger with Mickey Mouse.
- Comcast announced Thursday that it would not pursue assets of 21st Century Fox, including the Fox movie studio, clearing the way for Disney to acquire them.
- It will change the movie business forever.
- Other movie studios are “clear acquisition targets” that could potentially be merged together, like Disney and Fox, says UCLA School of Theater, Film, and Television lecturer and former network television/movie studio head Tom Nunan.
- And for the moviegoer, the Disney/Fox deal’s “creative and synergistic possibilities are exciting and truly mind boggling,” says Paul Dergarabedian, senior media analyst at comScore.
With the news on Thursday that Comcast is stepping aside in trying to buy assets from 21st Century Fox, including its movie studio, it now seems to be smooth sailing for Disney to move forward and take the pieces off Fox’s hands.
Back in December, after months of speculation, Disney announced that it had agreed to acquire the Fox studio and a large portion of its television production for $52.4 billion. Recently, Comcast swooped in with its own offer for the Fox assets (excluding Fox News and Fox Business channels). This led to Disney raising its offer to $71.3 billion. Comcast has now cut bait to put its focus on buying the European broadcast company, Sky.
With Fox under the Disney umbrella, the studio Walt Disney created goes from being the most envious in the movie industry to now becoming an unimaginable Goliath. Not only does it beef up Disney’s Marvel Studios with the addition of the likes of the X-Men and Deadpool characters, which are currently Fox’s big moneymakers, but it also brings countless options of content for Disney’s upcoming streaming service with its pick of everything from family-friendly fare like “The Greatest Showman,” to prestige dramas from the Fox Searchlight library, which released last year’s best picture Oscar winner, “The Shape of Water.”
If you combined the 2018 box office market share for both Disney and Fox, it’s close to 50%.
It’s another win for Disney CEO Bob Iger, and it will add to a legacy that is becoming one of the most successful Hollywood has ever seen.
“In terms of the history of the Walt Disney Company, there’s no question that Bob Iger has really done more for that company than perhaps any other individual — even more than Walt Disney,” Tom Nunan, UCLA School of Theater, Film, and Television lecturer and former network television/movie studio head, told Business Insider. “If you think about the number of characters and franchises that Iger has brought under the same umbrella. Disney himself built it on the shoulders of a little mouse, and that’s spectacular. But it’s nothing compared to the acquisition of Pixar, Lucasfilm, Marvel, and now the acquisition of Fox. There’s just been no comparable experience in the history of Hollywood in terms of a series of success under one individual. It’s a tremendous story.”
But for a business that’s lived on being reactionary, the merging of Disney and Fox has set the stage for an overhaul of Hollywood, in an even more visible way than has already been happening under the surface.
Thanks to the Disney/Fox deal, the project ideas are endless, like The Avengers versus the X-Men.
The “big six” — Disney, Fox, Sony, Paramount, Warner Bros., and Universal — have never been shy about making major deals with huge conglomerates. Universal is under the Comcast umbrella. Just recently, AT&T bought Time Warner for $85 billion, giving the large wireless carrier the Warner Bros. studio as well as all the binge-worthy content on HBO. But the studios have never swallowed each other until now. And don’t be surprised if you see more deals like the Disney/Fox one in the future.
“There’s no doubt that the big acquisition targets seem to be Paramount, Sony, and Lionsgate,” Nunan said. “All three of those companies for a variety of different reasons are clear acquisition targets in this market. But in a world of Google, Amazon, and Apple any of these 20th Century-created entertainment giants could possibly get picked off by 21st Century technology wizards.”
And that’s the reality of today’s Hollywood. The magic is no longer created on movie studio lots. It hasn’t been for some time. The Disney/Fox deal proves that most of the business is spread out to many other entities, leaving the “big six” as dinosaurs only good at doing one thing.
“They really are just blockbuster movie companies and that’s a very small list of people who actually know how to make and produce those movies,” Nunan said, noting the emergence of Netflix, Amazon, and Hulu as major employers in Hollywood. And then there’s Lionsgate, Annapurna Pictures (which recently took the domestic franchise rights of James Bond from Sony), and STX Entertainment.
“That’s become a smaller part of the overall employment in Hollywood,” he said of the big studios. “I don’t think we should get our violins out too soon to grieve the loss of that. It’s really such a tiny part of the overall food chain that exists in the entertainment industry.”
But for moviegoers, Disney bringing in Fox leads to more content than many could have imagined.
It “will essentially combine under one umbrella a very powerful slate of content that will be almost second to none in terms of its creative scope and potential combined revenue market share,” Paul Dergarabedian, a senior media analyst at comScore, told Business Insider. “The key Fox brands — including of course the all-important ‘X-Men,’ ‘Deadpool,’ and ‘Fantastic Four’ franchises — will be brought into the Disney/Marvel fold and the creative and synergistic possibilities are exciting and truly mind boggling.”
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