The two companies have reached a deal costing Disney a total of $66 billion to take Fox over from current owner Rupert Murdoch.
Disney will receive Fox’s film and TV studios, and so will gain the original Star Wars films, the remainder of Marvel (X-Men, Fantastic Four, Deadpool), and TV shows such as Modern Family and The Simpsons. They are also set to gain cable channels FX, National Geographic, and Fox’s regional US Sports network, as well as a 39% stake in Sky and majority control of online streaming service Hulu.
The company has claimed this move is to compete with online streaming platforms such as Amazon and Netflix, and have already announced that they will be pulling their films from Netflix US in order to increase the value of their own service from 2019.
Bob Iger, Disney boss until the end of 2021, said of the deal while on a conference call: “Our direct-to-consumer relationship is vital to our media business and our highest priority. This deal is a very important move forward that reflects our strategic vision for the future. [We will] become a more viable competitor to those that are out there.”
In return, Fox shareholders, including 86-year-old Murdoch and his family, are set to receive a 25% stake in the larger Disney corporation. The company plans to form a ‘New Fox’ from their newspapers and remaining cable channels (including the controversial Fox News channel, as well as four of their sports cable networks), moving away from entertainment and towards news.
“We are extremely proud of all that we have built at 21st Century Fox, and I firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace in what is an exciting and dynamic industry,” said Murdoch.
“Are we retreating? Absolutely not,” he added, speaking on a conference call. “Those who know me know I am a news man with a competitive spirit. Fox News is probably the strongest brand in all of television. We are pivoting at a pivotal moment.”
The companies expect the transaction to be completed in 12 to 18 months, but The Writers Guild of America West have already expressed their disapproval, claiming that: “The antitrust concerns raised by this deal are obvious and significant,” as they feel that the deal would unnecessarily increase Disney’s hold on the entertainment industry. US competition regulators are yet to confirm the deal and, if it is unable to be completed, Disney may owe Fox a $2.5 billion break-up fee.
Watch the trailer for Disney’s latest release, Star Wars: The Last Jedi, below:
