**Updated Bid to $71 Billion
**ITS OFFICIAL**
Walt Disney on Thursday announced it acquired many parts of Twenty-First Century Fox in a deal worth more than $52 billion in stock. The company will get network Nat Geo, Asian pay-TV operator Star TV, Fox's movie studios, stakes in Sky and Hulu, and regional sports networks.
Disney's Fox acquisition bolsters its plans to become a dominant streaming service platform, making it a bigger threat to Netflix.
"The more desirable content they have, the better they will be able to compete in terms of trying to sell a subscription offering at a time there's so much competition for subscription-based services," said eMarketer senior analyst Paul Verna.
Bob Iger will remain Disney's chairman and CEO through the end of 2021, at the request of the board of directors of both companies.
In August, Disney announced it will start standalone streaming servicesand pull its movies off of Netflix starting in 2019. No price point has been set for its upcoming movie and TV plan, but the company said it will be "substantially below" Netflix's price. Disney also will create a standalone ESPN digital service with access to 10,000 additional live sporting events.
Disney has said its content service will have a smaller library than Netflix. Still, it has some fan-favorite titles including its animated features, Marvel movies, and Star Wars films. Adding Fox's repertoire of content — which includes the X-Men, Alien and Predator franchises in addition to shows like "The Simpsons," "Family Guy" and "The X-Files" — will only make it stronger.
"Both companies are so deep in terms of what they have," Verna said. "The decision to subscribe to a streaming service often comes down to does the content match what I, as a consumer, am interested in."
The deal puts Netflix in a more precarious situation, as some of this content it had previously licensed may now leave the service. Netflix will also have tospend more to remain competitive. However, Netflix has already acknowledged it can't rely on other media companies' shows and movies and is focusing on its own content. The company has projected it will spend $8 billion next year.
The Disney-Fox merger solidifies Netflix's in-house production strategy as a smart one, Verna said. And since Netflix's service is already established, Disney will face a stiffer battle than Netflix, Verna said: the market is already full of over-the-top video companies that offer premium content without requiring a cable or satellite subscription. It also is unclear how many of Fox's titles Disney will get streaming rights for, as well as if it will pass federal antitrust laws.
"Would Netflix rather have all this Disney and Fox content?" Verna said. "Yes. Will they crumble as a result of not having it? I don't think so."
**UPDATE**
The purchase would include the movie studio who currently owns rights to X-Men/Fantastic Four and cable channels FX and National Geographic
It would NOT include Fox TV, FS1, Fox News
21st Century Fox has been holding talks to sell most of the company to Walt Disney Co., leaving behind a media company tightly focused on news and sports, according to people familiar with the situation.
The talks have taken place over the last few weeks and there is no certainty they will lead to a deal. The two sides are not currently talking at this very moment, but given the on again, off again nature of the talks, they could be revisited.
For Fox, the willingness to engage in sale talks with Disney stems from a growing belief among its senior management that scale in media is of immediate importance and that there is not a path to gain that scale in entertainment through acquisition. The company is said to believe that a more tightly focused group of properties around news and sports could compete more effectively in the current marketplace.
The media landscape has changed considerably in recent years with giants such as Facebook, Google (Alphabet), Amazon and Netflixchanging the way people consume media and dominating the digital distribution of digital video content. Being able to compete in that changing landscape, many people believe, requires scale that a Disney has, but 21st Century Fox does not.
For Disney, the opportunity to take control of another movie studio and significant TV production assets as it readies a direct-to-consumer entertainment streaming offering is attractive as is Fox's significant exposure to international markets, such as the U.K., Germany and Italy — both through its networks and 30 percent ownership of BSkyB. Disney recently announced it will pull all of its movies from the Netflix platform and will establish two direct-to-consumer offerings: one for sports and one including its key franchises such as "Star Wars" and Marvel.
Disney would not purchase all of Fox, according to people with knowledge of the talks.
The company could not own two broadcast networks and would therefore not buy the Fox broadcast network. It would not buy Fox's sports programming assets in the belief that combining them with ESPN could be seen as anti-competitive from an antitrust standpoint and it would not buy the Fox News or Business channel. Disney would also not purchase Fox's local broadcasting affiliates, according to people familiar with the negotiations.
In addition to the movie studio, TV production and international assets such as Star and B Sky B, Disney would also add entertainment networks such as FX and National Geographic.
The contemplated structure of the deal or the price that has been discussed could not be learned. Given it would involve the sale of many, but not all of Fox's properties, it's unclear how Fox would mitigate potential tax consequences of a deal.
Officials at Disney and Fox declined to comment.
**ITS OFFICIAL**
Walt Disney on Thursday announced it acquired many parts of Twenty-First Century Fox in a deal worth more than $52 billion in stock. The company will get network Nat Geo, Asian pay-TV operator Star TV, Fox's movie studios, stakes in Sky and Hulu, and regional sports networks.
Disney's Fox acquisition bolsters its plans to become a dominant streaming service platform, making it a bigger threat to Netflix.
"The more desirable content they have, the better they will be able to compete in terms of trying to sell a subscription offering at a time there's so much competition for subscription-based services," said eMarketer senior analyst Paul Verna.
Bob Iger will remain Disney's chairman and CEO through the end of 2021, at the request of the board of directors of both companies.
In August, Disney announced it will start standalone streaming servicesand pull its movies off of Netflix starting in 2019. No price point has been set for its upcoming movie and TV plan, but the company said it will be "substantially below" Netflix's price. Disney also will create a standalone ESPN digital service with access to 10,000 additional live sporting events.
Disney has said its content service will have a smaller library than Netflix. Still, it has some fan-favorite titles including its animated features, Marvel movies, and Star Wars films. Adding Fox's repertoire of content — which includes the X-Men, Alien and Predator franchises in addition to shows like "The Simpsons," "Family Guy" and "The X-Files" — will only make it stronger.
"Both companies are so deep in terms of what they have," Verna said. "The decision to subscribe to a streaming service often comes down to does the content match what I, as a consumer, am interested in."
The deal puts Netflix in a more precarious situation, as some of this content it had previously licensed may now leave the service. Netflix will also have tospend more to remain competitive. However, Netflix has already acknowledged it can't rely on other media companies' shows and movies and is focusing on its own content. The company has projected it will spend $8 billion next year.
The Disney-Fox merger solidifies Netflix's in-house production strategy as a smart one, Verna said. And since Netflix's service is already established, Disney will face a stiffer battle than Netflix, Verna said: the market is already full of over-the-top video companies that offer premium content without requiring a cable or satellite subscription. It also is unclear how many of Fox's titles Disney will get streaming rights for, as well as if it will pass federal antitrust laws.
"Would Netflix rather have all this Disney and Fox content?" Verna said. "Yes. Will they crumble as a result of not having it? I don't think so."
**UPDATE**
The purchase would include the movie studio who currently owns rights to X-Men/Fantastic Four and cable channels FX and National Geographic
It would NOT include Fox TV, FS1, Fox News
21st Century Fox has been holding talks to sell most of the company to Walt Disney Co., leaving behind a media company tightly focused on news and sports, according to people familiar with the situation.
The talks have taken place over the last few weeks and there is no certainty they will lead to a deal. The two sides are not currently talking at this very moment, but given the on again, off again nature of the talks, they could be revisited.
For Fox, the willingness to engage in sale talks with Disney stems from a growing belief among its senior management that scale in media is of immediate importance and that there is not a path to gain that scale in entertainment through acquisition. The company is said to believe that a more tightly focused group of properties around news and sports could compete more effectively in the current marketplace.
The media landscape has changed considerably in recent years with giants such as Facebook, Google (Alphabet), Amazon and Netflixchanging the way people consume media and dominating the digital distribution of digital video content. Being able to compete in that changing landscape, many people believe, requires scale that a Disney has, but 21st Century Fox does not.
For Disney, the opportunity to take control of another movie studio and significant TV production assets as it readies a direct-to-consumer entertainment streaming offering is attractive as is Fox's significant exposure to international markets, such as the U.K., Germany and Italy — both through its networks and 30 percent ownership of BSkyB. Disney recently announced it will pull all of its movies from the Netflix platform and will establish two direct-to-consumer offerings: one for sports and one including its key franchises such as "Star Wars" and Marvel.
Disney would not purchase all of Fox, according to people with knowledge of the talks.
The company could not own two broadcast networks and would therefore not buy the Fox broadcast network. It would not buy Fox's sports programming assets in the belief that combining them with ESPN could be seen as anti-competitive from an antitrust standpoint and it would not buy the Fox News or Business channel. Disney would also not purchase Fox's local broadcasting affiliates, according to people familiar with the negotiations.
In addition to the movie studio, TV production and international assets such as Star and B Sky B, Disney would also add entertainment networks such as FX and National Geographic.
The contemplated structure of the deal or the price that has been discussed could not be learned. Given it would involve the sale of many, but not all of Fox's properties, it's unclear how Fox would mitigate potential tax consequences of a deal.
Officials at Disney and Fox declined to comment.
Last edited:
