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On November 8, 1998 on an animated show from the Fox Network, The Simpsons, known for its prophetic foresight made a prophecy. On episode 5 of Season 10 of The Simpsons an acquisition of the 20th Century Fox Studios by the Walt Disney Company was prophesied. On March 20, 2019, amidst a cord cutting revolution lead by Netflix, the prophecy would be fulfilled.
Disney acquired 21st Century Fox Company on March 20, 2019. This was the largest and perhaps most complicated acquisition of one media company to another in history. It is full of nuance and small details. But ultimately there is still a whole lot of confusion over what exactly Disney bought with the acquisition of 21st Century Fox Company. Today I’m breaking down the details of Disney’s purchase of the 21st CenturyFox Company.
Prior to the acquisition by Disney, Fox was a powerhouse in the entertainment industry. One of the 6 major studios and the 4th largest media conglomerate in the world.
21st Century Fox, owned by media mogul Rupert Murdoch, included the 20th Century Fox, Fox Searchlight, Fox 2000, Blue Sky Animation film studios, The Fox News, Fox Sports Stations, FX Cable Stations, and National Geographic TV holdings along with a 30% share of Hulu streaming and other international holdings.
Disney at the time was the world’s largest media company and under the leadership of CEO Bob Iger had recently been buying up other media assets and intellectual properties such as Pixar in 2006 for over 7 billion dollars, Marvel in 2009 for over 4 billion dollars, and Lucasfilm in 2012 for more that 4 billions dollars. They were producing hit after hit at the box office and were consistently turning up major profits for shareholders. But amidst Disney’s success, a newcomer would soon come on to the horizon who would revolutionize the entertainment industry… that newcomer would be Netflix!
Netflix has changed the game for the entertainment industry, bringing direct to consumer, anytime, licenced, and original content to our fingertips. Though Disney had licenced much of its content to Netflix, they soon realized Netflix was not only becoming a major player in the distribution of TV and film but they became a major player in the production of original content with shows such as Stranger Things, 13 Reasons Why and anything with Noah Centineo in it, changing the paradigm in Hollywood.
Netflix brought about the cord cutting and streaming revolution! We no longer need to go to the movie theater or subscribe to expensive cable plans to get top notch original entertainment. For $9.99 a month you could watch commercial free ANYWHERE at ANYTIME! The cord cutting streaming revolution had begun! Disney saw the writing on the proverbial wall and Bob Iger made it clear that Disney needed to pivot to be ready as people were cutting the cord streaming their entertainment.
On November 6, 2017, talk of a potential merger or acquisition between Disney and Fox was made public.
The deal would reportedly cost Disney $52.4 billion for film and some television assets while what was left, including Fox News and the Fox Networks, would be spun off into a new independent company run by the Murdoch family as Disney already owned ABC networks and an acquisition of one of the four TV networks of another would never pass antitrust and FCC regulations.
As talks between Disney and Fox moved forward the question on everyone’s mind was, “Why would the Murdoch family, the owners of Fox, want to sell to Disney?”. There was never a clear answer on that from Rupert Murdoch but ultimately it would seem that Murdoch was not interested in having to compete in the digital streaming revolution.
He was looking to sell and soon Comcast made an offer for 21st Century Fox and a bidding war between Disney and Comcast began. After offers and counter offers, on July 19, 2017, Comcast officially announced it was dropping its bid on the Fox assets and Disney would buy 21 Century Fox for 71.3 BILLION dollars.
The deal closing on March 20, 2019 made Disney, already the largest media conglomerate in the world, even larger making up nearly a third of the entertainment media landscape.
So with the deal done, the question remains, what does Disney own and what is now a part of the new Fox Corporation, the spin off company created to house the assets of 21st Century Fox that were not and could not be purchased by Disney.
So what did Disney get from the deal? The deal included 20th Century Fox Studios both film and television divisions. 20th Century Fox has been a powerhouse in the film and TV industries producing both critical and commercial darlings. It has accumulated 9 Academy Awards for Best Picture including classics such as The Sound of Music and Patton. Other notable films include Speed, The Sandlot, Mrs. Doubtfire, Independence Day, Anastasia, and Avatar. Notable film franchises include Planet of the Apes, Alien and Die Heart. And we can’t forget 30 years of The Simpsons, who are now a part of the Disney Family.
Along with an array of TV and film assets, Disney would get the rights to the X-Men, Deadpool and Fantastic 4 films which were licensed to 20th Century before Disney purchased Marvel studios in 2009. Marvel Studios will now begin to incorporate the X-Men Characters into the next phase of the MCU.
Disney would also get Fox’s 30% share of Hulu, giving Disney a controlling share of Hulu as it already owned a 30% stake. Disney CEO Bob Iger would note how valuable that control would be as a platform for Disney to stream much of it’s new assets that was not well suited for the Disney’s new streaming service, Disney+.
Disney would also get Fox Searchlight Pictures who specialize in the production and distribution of independent, horror, art-house, and foreign films. Searchlight Pictures has come to be known as the award season darling of the film industry, as they have won the Oscar for Best Picture 4 times since 2009 with the production of acclaimed independent films Slumdog Millionaire, 12 Years a Slave, Birdman, and The Shape of Water. Other notable Searchlight Pictures films include Little Miss Sunshine, Juno, 127 Hours, The Grand Budapest Hotel, Brooklyn, Three Billboards Outside Ebbing, Missouri, The Favourite, and Jojo Rabbit.
Leading up to the Disney acquisition of 21st Century Fox there was much speculation that Disney would shutter Fox’s Blue Sky Studios, makers of Rio and the Ice Age animated films or fold their assets into one of the other animation studios. But with the release of 2019 Spies in Disguise and 2 more full length animated films planned for 2021 and 2022 respectively, at the time of this video it looks as if Disney will keep producing some of the fun and quirky animated films Blue Sky Studios has become known for.
Disney would also get Fox 2000 studios (which it would shutter), a 70% stake in National Geographic, The FX cable stations, as well as other international and online assets.
Once the deal was done, Disney moved quickly to make their new Fox acquisitions a part of the Disney Family, bringing many of the new Fox assets, such as The Simpsons, onto Disney’s new streaming service Disney+.
In January of 2020 Disney would change the names of 20th Century Fox and Fox Searchlight Studios to 20th Century Studios and Searchlight Studios respectively. Many have speculated the name change was an effort to distance Disney from the stigma of the Fox name in relation to Fox News but ultimately the name change was an effort to reduce brand confusion as the remainder of the Fox company which included the Fox Broadcasting Company, 20th Century Fox’s physical studio lot, Fox Television Stations, Fox News Group, and Fox Sports were spun off into a new company owned by the Murdoch Family, The Fox Corporation.
So what does this mean? The deal is one in a long list of media mergers. As consumers switch to streaming amidst a cord cutting revolution the media landscape is changing, the industry and studios are quickly introducing new proprietary streaming services. As of this video there are over 25 major streaming services currently on the market or in development from major studios or distributors including Apple TV Plus, Amazon Prime, Hulu, Netflix, HBO Max, Quibbi, CBS All Access, and NBCUniversal’s Peacock. There is no way the media landscape can sustain such saturation and eventually the services with the best offerings will win out.
Disney’s purchase of 21st Century Fox puts them in a powerful position to stay on top of the media landscape in the midst of an unpredictable, ever changing cord cutting, streaming revolution. Will it be good for the consumer? I hope so, I think so, I believe so… but… only time will tell.
***CORRECTION: ‘10 Things I Hate About You’ was a Touchstone (Disney) Film, not 20th Century Fox***