Disney’s Bid To Buy 21st Century Fox
Disney is set to buy a major part of 21st Century Fox for $52.4 billion. Both sides have said it will likely take 12 to 18 months to complete. They will still have to sell the deal to government regulators, who must review the merger to determine its effects on competitors and consumers. That task will likely fall to the Justice Department, which weeks ago took the rare step of suing companies in a different blockbuster deal: AT&T’s bid for Time Warner.
Members of Congress have already stated that they want to hold hearings on Disney’s billion dollar bid to buy 21st Century Fox. Key voices on competition and consumer protection fear the deal will only solidify Disney’s dominance in entertainment — granting it too many major box-office franchises and too much power over regional sports networks and streaming video services. Lawmakers don’t actually have a say in major mergers but they tend to scrutinize them anyways since the Department of Justice investigations happen outside of public view. Hearings-sometimes featuring testimony from major chief executives — can ultimately shape public opinion about the companies’ plans.
If the deal goes through, Disney will own the rights to everything from the Avatar movies to FX’s The Americans. They will also own the film rights to the Marvel comics characters associated with the X-Men and Fantastic Four, which Marvel sold off to Fox long before either was a Disney subsidiary. Federal Communications Commission regulations state that no one company can own more than one broadcast network and since Disney already owns ABC, Fox broadcast network was off the table.
Fox, will maintain the rights to Fox News, Fox Sports 1, the Fox broadcast network and the Fox studio lot in Los Angeles. Fox broadcast network is home to everything from The Simpsons to New Girl to The X-Files. The network launched in 1986 and by the mid-’90s, it was a mainstay in most American homes, competing with ABC, CBS, and NBC.
The massive deal would consolidate two of the biggest players in Hollywood and would reshape the media and entertainment industries. Disney will also get Fox’s 30 percent share of ownership of Hulu in this deal. Disney already owns a 30 percent share so Fox’s share will now make Disney the majority shareholder in Hulu. NBC still owns a 30 percent stake and Warner Bros. owns the remaining 10 percent.
Disney already announced plans for its own streaming business in 2019, which will feature films from Disney and Pixar, content that specifically won’t be available on Netflix. Hulu already has 12 million subscribers so it remains to be seen whether Disney will piggyback their own streaming business with Hulu or just convert Hulu into Disney’s streaming service. Disney’s Marvel and Lucas film franchise will still appear on Netflix as part of a multiyear agreement, but that runs out in a few years and will almost certainly be exclusive to their own streaming service.
