Disney is buying the lion’s share of Rupert Murdoch’s company 21st Century Fox in a $52.4-billion US deal that reshapes the landscape of film, television, cable and entertainment companies in the U.S.
The deal, which has been rumoured for weeks, was made official on Thursday morning, and includes many high-profile assets, such as:
- Film studios Twentieth Century Fox and Fox Searchlight Pictures.
- TV production units Twentieth Century Fox Television, FX Productions and Fox21.
- Twenty-two regional Fox Sports channels.
- TV channels FX and the National Geographic Channel.
- A minority stake in streaming service Hulu.
Internationally, Disney is also getting the Star TV network in India and a stake in European pay-TV provider Sky.
But Disney’s buyout doesn’t include several Fox-branded channels including Fox News, Fox Business Network, FS1, FS2 and Big Ten Network. Those will instead be spun out into a newly listed public company with a much narrower focus on news and sports, and less entertainment programming and movies.
Murdoch’s stable of newspapers, including the Wall Street Journal, are unaffected, as they are largely owned by a different subsidiary in his empire, News Corp.
The entertainment business is going through big changes, as technology and legacy media companies horn in on each others’ turf. Disney has previously announced it plans to offer its own streaming service starting in 2019, and also has plans for a streaming service for sports network, ESPN, which Disney also owns.
Analyst Paolo Pescatore of CCS Insight says that “even a giant like Disney has not been immune” to changes in how consumers watch TV shows and movies. Thursday’s deal, he says, will give Disney greater control of all aspects of content, from creation to distribution. That would lead to greater sources of revenue, and an ability to compete with tech companies like Netflix and Amazon head on.
Disney chair and CEO Bob Iger will delay his retirement by two years until 2021 to stickhandle the takeover. Since getting the top job at Disney in 2005, Iger has overseen the entertainment colossus’s takeover of Star Wars owner LucasFilm, Pixar and Marvel.
“This gives us the ability to marry the great content of Fox with the great content of Disney,” Iger said on Good Morning America, a morning news show that airs on ABC — a channel Disney already owns. “It gives us a much larger international footprint and it enables us to use cutting-edge technology to reach consumers in far more compelling ways.”