Walt Disney Co has agreed to buy key film and television assets of 21st Century Fox, in a USD 52.4 billion deal that bolsters the media-entertainment powerhouse's challenge to Netflix and emerging rivals in the streaming wars.
Walt Disney Co has agreed to buy key film and television assets of 21st Century Fox, in a USD 52.4 billion deal that bolsters the media-entertainment powerhouse’s challenge to Netflix and emerging rivals in the streaming wars. The blockbuster stock transaction also vastly reduces the Fox media empire built by Rupert Murdoch, leaving the 86- year-old tycoon and his two sons with a more tightly focused group which includes the Fox broadcast network, Fox News Channel and sports channels. The deal was quickly hailed by US President Donald Trump, who congratulated Murdoch – in stark contrast to his administration’s opposition to a tie-up between AT&T and Time Warner. It will see Disney acquire the vaunted Fox Hollywood film and television studios, cable entertainment networks and international TV businesses, bringing popular entertainment properties including “X-Men,” “Avatar,” “The Simpsons,” FX Networks and National Geographic into Disney’s portfolio. “The acquisition of this stellar collection of businesses from 21st Century Fox reflects the increasing consumer demand for a rich diversity of entertainment experiences that are more compelling, accessible and convenient than ever before,” said Disney chief executive Robert Iger in a statement. Iger, who was previously expected to step down in 2019, will now stay on through 2021. Disney’s move to acquire the Fox library of content is seen as a bid to bolster its arsenal against Netflix and Amazon as well as emerging tech players such as Facebook and Apple, which are cashing in on a move towards streaming services and away from traditional pay TV packages. Disney, which owns the ABC television network, ESPN and has major studios in Hollywood, has been preparing to launch its own streaming service. Trump’s spokeswoman Sarah Sanders told reporters: “I know that the president spoke with Rupert Murdoch earlier today, congratulated him on the deal, and thinks that – to use one of the president’s favorite words – that this could be a great thing for jobs.” Independent media analyst Alan Wolk saw a number of positives for Disney in the deal, which gives it a controlling 60-percent stake in America’s third-largest streaming platform, Hulu.
By controlling Hulu, Disney gets “a platform with which to take on Netflix and Amazon, particularly internationally” as well as “a whole lot of data about their users, something they have not previously had,” Wolk said. “If Disney includes live sports with Hulu, that could give it a huge edge over Netflix and Amazon.” The deal would also expand Disney’s global footprint with Fox TV unit Star India – known for sports and entertainment – and Fox’s 39 per cent share in the European-based Sky. Fox has been seeking the remainder of Sky but has faced regulatory scrutiny in Britain.
Analysts have said the deal could face considerable scrutiny by antitrust regulators because of the tie-up between two of the largest film and television groups. The news comes as another major media deal, between AT&T and Time Warner, has been challenged in an antitrust filing by the US Justice Department. Time Warner is the parent company of CNN, which is critical of the Trump administration, while Murdoch’s Fox News is a strong ally. Matt Stoller of the Open Markets Institute, which follows monopoly issues, said the deal could further concentrate market power.