We are inches away from witnessing the birth of the largest media behemoth that has ever existed.
Bankers for Disney and Fox have met to ink out the final details of a $60 billion deal that would see Disney take control of 21st Century Fox, FX Network, and regional sports networks.
If this deal goes through, Disney would wield unprecedented power in the entertainment industry. It would control 60 percent of Hulu, billions of dollars at the box office and much more. There are demigods. There are titans. And then there is Disney.
So, assuming this deal goes through, who wins and who loses? A lot of people.
James Murdoch – Winner
As the 44-year-old CEO Fox, James Murdoch is probably the biggest winner in this deal. His name has been mentioned as a potential Disney executive and he could be in line to be the next Disney CEO. It would make sense. James has the experience Disney needs.
James dropped out of Harvard University in 1995 to back a record label that spawned hip-hop acts Mos Def and Talib Kweli. Later his dad and Fox founder Rupert Murdoch appointed him the head of Sky, making him the youngest CEO of a Financial Times Stock Exchange (FTSE) 100 company. He was later promoted to the head of international operations at News Corp., which owns the Wall Street Journal, Times of London and the Sun.
He has international, merchandising and studio experience and in 2015 he became the CEO of Fox, giving him Disney’s much sought after media experience. He and his wife, Kathryn, founded Quadrivium, a foundation focused on promoting science, equal opportunity and environmental causes. That aligns him more politically with the Disney company’s heavy emphasis on S.T.E.M. careers, environmentalism, and equal opportunity.
James has made no secret of his ambitions to move up in the world and Disney offers him a phenomenal opportunity to move into a different stratosphere of leadership. Time will tell whether he will actually win the top job, but he certainly has the experience to potentially move into the position.
The American People – Loser
A Fox deal means Disney CEO Bob Iger will be sticking around for a few more years. It will be his crowning achievement, and he won’t leave the details to chance on this one. Still, that means he won’t run for President of The United States in 2020. And, as an American and a Disney fan, I can confidently say that makes us all losers.
If Iger were to run the country half as well as he runs The Walt Disney Company, America would reach heights previously thought impossible. There would be a chicken in every pot and mouse ears on every head. Every city would hold nightly fireworks featuring the latest projection mapping technology and custom music for each metropolitan area. It would have been glorious, but now we will never get to experience it.
Disney’s Streaming App – Winner
21st Century Fox has one of the largest video libraries of any studio. The original Star Wars, Avatar, Independence Day, and many more franchises all exist in the library. In addition, Fox has the rights to the mutants in X-Men which will bring them back under Marvel’s banner. Fox will give Disney a huge boost in content for the streaming app they are introducing in 2019, easily making the app much more competitive to Netflix.
Netflix – Loser
Netflix was already in trouble losing Pixar, Disney, Marvel and Star Wars films. Now with the possibility of losing Fox’s library, the streaming service will have less content to use to compete with a fairly large competitor.
Marvel Fans – Winner
The aforementioned X-Men franchise is a big boon to Marvel fans, but that is just the tip of the iceberg. Marvel would also get control of The Fantastic Four. Chris Evans (Captain America) has already tweeted asking for a crossover with the Human Torch. There are endless possibilities for crossover films that could extend for decades.
On the other hand, Deadpool, which has already made quite an impression with Marvel fans, is an area of concern. Everyone knows Disney’s Marvel is capable of making R-rated material (see: Netflix Series). Still, Fox is known for taking many more risks than Disney, which makes fans nervous. Would a Disney-owned Fox release an R-rate movie like Logan? We will soon see.
R-Rated Movies – Too Soon To Tell
Anyone that says Disney doesn’t know how to make R-rated movies doesn’t know their history. Disney’s Miramax made Pulp Fiction, arguably one of the greatest R-rated films of all time. That said, Disney also sacrificed a considerable amount for that movie. Disney will do whatever it takes to protect its stock price and making R-rated movies cut off half of the audience. In addition, if people figure out that the family-friendly Disney is making R-rated movies through Fox, they could face an identity crisis that leads to lower stock prices.
Disney Theme Parks – Too Soon To Tell
The most obvious benefit to the parks is that Disney can include certain franchises from Fox in the parks. However, Disney would also gain control of The Simpsons with this deal. The Simpsons have a huge role in Universal Studios Orlando, which could be a big boon for Disney. If Disney were able to negotiate a swap with Comcast that allowed The Avengers to meet and greet in Disney World, this entire deal would be worth it. But that’s a big “IF.”
Disney reclaimed Oswald the Lucky Rabbit from Comcast when Al Michaels switched from ESPN’s Monday Night Football to NBC’s Sunday Night Football. I see no reason why they couldn’t negotiate a similar deal for The Avengers, but it’s too soon to tell whether or not it will happen.
Separation of Studios – Loser
Olaf’s Frozen Adventure was a nightmare. Let me rephrase that. The short itself wasn’t too bad. The execution of the presentation was a disaster. (Check out Ed’s take on the process here). The 22-minute Disney Animation “short” broke decades of tradition that put Pixar shorts in front of Pixar films.
It’s clear Disney put the short in front of Pixar’s Coco to boost merchandising opportunities at The Disney Store. Still, the film forms the dangerous precedent of Disney mixing studios in an attempt to create bigger profits. Even though they are owned by the same company, the studios need to have creative independence. The more Disney blurs those lines, the less creativity there is.
Movie Theaters – Too Soon To Tell
Disney has one of the hottest properties in the galaxy. That’s why it is demanding a 65 percent take from movie theaters that show Star Wars: The Last Jedi. And that theaters reserve their biggest auditorium for the movie. And that film houses keep the movie in their theaters for at least four weeks. Oh, and theaters that violate this will face a 5 percent penalty.
A movie studio that can dictate such extreme rules to theaters doesn’t need more power. Disney already possesses outsized influence in the marketplace. If they get even more power, they could place a stranglehold on theaters that lead to their demise. Disney already has a lot of power. We’ll have to see if responsibility follows.
Disney Stock Holders – Too Soon To Tell
With almost every article reporting the deal between Disney and Fox, you’ve probably noticed that Disney’s stock has dropped on the news. That’s because Disney is getting stuck with cable networks (FX, National Geographic) at a time when more and more customers are cutting the cable cord. Cable networks like ESPN are the most profitable segment of Disney’s company, but they also face a very uncertain future. Stockholders could be footing the bill for a long period of adjustment as more and more people cut the cord.
Disney Fans – Winner
Overall, Disney fans will likely end up as winners in this deal. There are some uncertain parts of the deal, but this will largely be positive for the Disney company and its fans. To hear us break down the deal in more detail, check out the podcast episode below.