Disney buys 21st Century FOX
$68b deal sees Disney expand its assets as it prepares to take on Netflix.
The Walt Disney Company said on Thursday that it had reached a deal to buy film & TV assets of 21st Century FOX, the conglomerate controlled by Rupert Murdoch, in a transaction valued at roughly $US52.4 billion ($AU68.3b).
Disney is purchasing the FOX television studio, which has 36 series in production, including The Simpsons, Homeland, This Is Us and Modern Family. Disney’s significantly smaller TV factory, ABC Studios, has delivered series of inconsistent quality and lost its biggest hitmaker in August when the Grey’s Anatomy producer Shonda Rhimes signed with Netflix.
Disney now has enough muscle to become a true competitor to Netflix, Apple, Amazon, Google and Facebook in the fast-growing realm of online video. It is the biggest counterattack from a traditional media company against the tech giants that have aggressively moved into the entertainment business and strengthens Disney’s content hand. It plans to launch a pair of streaming services: one an ESPN-branded sports offering planned for next year, and a Disney-branded entertainment service to rival Netflix in 2019.
Disney and FOX film assets will create Hollywood’s largest studio, dominating the release slate and commanding as much as 40% of the domestic US box office.
Disney also would gain controlling interest in the TV streaming service Hulu, adding Fox’s 30% stake to its own equal share. That would give it a decisive voice in the future direction of the service, which also is owned by Comcast’s NBCUniversal unit and Time Warner. As part of the deal, Disney will also get the FX and National Geographic cable networks, and stakes in two behemoth overseas television-service providers, Sky of Britain and Star of India.
Robert A. Iger, Disney’s chairman and chief executive, agreed to renew his contract for a fourth time, delaying retirement from July 2019 to the end of 2021. A role for James Murdoch is yet to be decided.
“(James) will be integral to helping us integrate these companies over the next number of months,” Mr. Iger said. “Over that time, he and I will continue to discuss whether there is a role for him here or not.”
Not included in the acquisition: FOX News, the FOX broadcast network and the FS1 sports cable channel. The Murdochs will spin those businesses and a handful of other properties, including the 20th Century FOX lot in Hollywood, which Disney is not buying, into a newly listed company.