Disney’s buyout of Fox, the implications

Disney’s buyout of Fox, the implications

0 comments 📅15 December 2017, 20:35

Ever since we first reported on this back in November, it has had us quaking in our boots.

This sale of the century is to buy most of the assets of 21st Century Fox for $52.4 billion (plus another $13.7 billion in assumed debt) and Hollywood-based journalists have been frantically trying to determine the overall entertainment-industry impact.

Will it be a case of we barely notice…or will mark the birth of a terrifying new media monopoly? Let’s break down what is generally believed will probably happen.

Thanks to incredibly complex licensing deals, Fox has had exclusive access to a number of characters from the Marvel comics canon that do no appear anywhere in the Marvel Cinematic Universe already controlled by Disney.

In a prepared statement, Disney CEO Bob Iger foregrounded the conjoining of the proper Marvel Cinematic Universe (The Avengers, Guardians of the Galaxy) with the Fox portfolio. He proclaimed that this merger “provides Disney with the opportunity to reunite the X-Men, Fantastic Four, and Deadpool with the Marvel family under one roof, and create richer, more complex worlds of inter-related characters and stories that audiences have shown they love.” This represents an explosion of possibility, in narrative terms; your longstanding fantasy of Wolverine exchanging banter with Spider-Man just took one huge leap towards reality. As The Guardian put it, “Hell, if they feel like it, Disney can make Wolverine kiss Darth Vader.”

It’s worth remembering though before you pull those party poppers at the thought of the potential shared screentime of all your favourite superheros, that Disney was already a shadowy corporate behemoth with unsettling business practices.

It was just last month that Disney officially barred Los Angeles Times critics from their movie screenings as a punishment for unflattering reportage on the Walt Disney Co’s vampiric relationship to the city of Anaheim. Thankfully, after a thoroughly public shaming and solidarity-boycott threats from other major newspapers, Disney caved. All the same, that was but one frightening illustration of the sinister influence that a corporation drunk on its own power can wield.

Moreover, the merger means Disney also grabs the rights to a number of other Fox-controlled film franchises, including Alien, Planet of the Apes, Predator and even Independence Day. (Though the dismal receipts on the most recent installment might make that possibility rather remote.)

Disney will also own James Cameron’s envelope-pushing, $3 billion–grossing Avatar…and its impending sequels, which the new mouse-shaped monster monopoly can exploit across all media platforms, including its theme park divisions.

And of course there’s Star Wars. Over the last two years, Disney has dominated the year-end box office with Star Wars: The Force Awakens (2015) and Rogue One (2016) earning $3.1billion cumulative worldwide gross between them. The Force Awakens set all sorts of box office records, including the fastest film to earn $1 billion worldwide (12 days) and highest-grossing movie in North American history ($936.7 million).

And…at the time of writing this article, news is already trickling in that on it’s first night alone – Thursday, Star Wars: The Last Jedi has made $45million.

So all of that, together with the next three Avatar installments set for release in December 2020, 2021, 2024, and 2025, means Disney could continue to dominate winter holiday movie market for years to come.

Fox’s earlier incarnation, 20th Century Fox, distributed the original two Star Wars movie trilogies and for an entire generation, the studio’s spotlight and snare-drum-and-horn fanfare has become an instantly recognizable part of the beginning of a Star Wars movie. When Disney acquired Lucasfilm in 2012 for $4 billion, Fox held on to the home-video and digital distribution rights of those original films in perpetuity, as well as complete and permanent distribution rights to 1977’s first Star Wars installment (a.k.a. Episode IV: A New Hope).

All of that goes to Disney in the deal.

For Star Wars obsessives, another significant development of Planet Disney will be the inevitable release of the “total package” – a complete Blu-Ray (4k?) collection of all the Star Wars films. Probably packaged as a special edition 1:1 scale TIE Fighter box set. Added to which, fans are still hopeful an unaltered version of Star Wars: Episode IV: A New Hope might be released, in essence the original cinematic release, before Lucas started tinkering with it…and of course, one where Han shoots first, like he’s supposed to.

Then there’s streaming TV. Until now, Hulu has operated as a joint venture, controlled by three big conglomerate stakeholders (Comcast’s NBCUniversal, Fox and Disney) and one smaller partner (TimeWarner, which last year bought 10 percent of the company). But once the Disney-Fox deal is done, Disney will have a controlling stake in Hulu and an incentive to dramatically bulk up the streamer’s offerings – and turn it into an even bigger rival to Netflix.

Source: USA Today

During the buildup to the merger, there’d been some uncertainty as to whether Disney might simply ditch its previously announced plan to build a family-focused version of Netflix and instead concentrate on making Hulu its big streaming play. But Iger said he wants to do both. “Our goal on the direct-to-consumer front in the United States is to go out with essentially a family-oriented product with Disney and Pixar and Marvel and Lucas that’s going to launch in 2019; a sports product from ESPN in 2018; and [what will] probably be a more adult-oriented product from Hulu,” Iger told CNBC, adding Disney would “give consumers the ability to buy all three, or to buy them individually.”

Iger’s comments offer the intriguing possibility that Hulu could become a more focused streamer aimed at delivering the sort of premium, awards-bait content seen on HBO, FX, and, to some extent, ABC, as opposed to something more like Netflix – a service which aims to offer something for everyone.

Naturally, all Disney-owned content would be pulled from every other streaming service, so no more Marvel, no more Archer, no more Simpsons, no more Family Guy, no more Star Wars…on Netflix.

However, there are roadblocks to such a scenario. It’s not entirely clear if Disney can do whatever it wants with Hulu, even if it will have a controlling stake in the streamer. Analysts argue that Comcast, for example, could veto any major shift in direction.

Less on-brand for Disney is Fox’s specialty film division Fox Searchlight, which has developed into an awards-season hothouse over the last few years, releasing such best picture Oscar winners as 12 Years a Slave, Birdman, and Slumdog Millionaire. Earlier this week, Searchlight scored multiple Golden Globes nominations for Three Billboards Outside Ebbing, Missouri and Guillermo del Toro’s The Shape of Water, as well as seven SAG Awards nominations for its 2017 releases.

A respected player in the indie sector and dominant acquisitions force at the Sundance Film Festival, the specialty label is known for finding and cultivating quirky low-budget films into cultural sensations. This is well outside what has been Disney’s modus operandi up to this point – popcorn crowd-pleasers in the Pixar-Marvel-Lucasfilm vein. Toward that end, Disney has largely removed itself from the awards scene.

Despite the potential of providing more unique features to offer via streaming, Iger has refused to say whether Searchlight will continue to function as a distinct division under Disney management.

The biggest component not included in the deal was Fox News, which had moved to spin off into its own independent haven for conservatism prior to this deal.

However, the Fox network will more than likely also significantly change. Murdoch has emphasized that the new Fox would be focused on sports, news, and live events. Its NFL, World Series, and other sports rights will give it a great platform to promote a couple of big, male-focused original series every season. It could also snap up or produce some low-cost scripted programming (say something like Syfy original movies or BBC America’s Orphan Black), content that pays for itself via ad revenue and helps maintain the value of Fox’s local TV stations. Reality shows will also have a place on the new FBC, even more than now. As one top network exec told Vulture yesterday, “The days of a full schedule of full-priced Fox programming? That seems to be dead and buried.”

Ratings for The Simpsons, Family Guy and Bob’s Burgers have fallen sharply over the last few years – like most everything else on TV – even as the shows’ production budgets remain sky-high. Fox has dutifully renewed the shows, however, because its 20th Century Fox TV unit owns them and is able to extract millions of dollars in profit from selling reruns to cable networks and local stations, more than making up for the losses at the network level. Once Fox and 20th Century are divorced, however, it’s hard to see how the new Fox makes the economics work – or why Disney would want two of its new crown jewels airing somewhere else, which means they could be on the move – or be on their way out.

Despite all of this, it’s unlikely we’ll see an immediate, dramatic changes, but they will come, eventually.

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Disney’s deal to buy 20th Century Fox back on track
 Disney reportedly in talks to buy 20th Century Fox
 Much of Solo: A Star Wars Story was reshot, according to claims
 Disney to launch its own streaming service from 2019
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