Theme Park Insider

The Disney-Fox Thing

Edited: December 13, 2017, 4:29 PM · The Guardian has a report teasing some announcements that are likely to be made tomorrow when the Disney-Fox deal comes to the forefront

https://www.theguardian.com/media/2017/dec/13/rupert-murdoch-set-to-sell-off-21st-century-fox-assets-to-disney

From what I can gather, this is basically a news meda-non news media split. Rupert (and son Lachlan) will retain the remains of 21 Century Fox that don't go to Disney (probably rebranded under the "News Corporation" banner that holds the print interests), the Print business (Newspapers including The Times (london), The Wall Street Journal, The Australian and more, plus book publisher HarperColins), Fox News, Fox Sports, Fox Business, and the 28 terrestrial tv channels that Fox owns and operates.

Everything else, including potentially his son James, goes to Disney. The cable networks (FX, Nat Geo), Sky UK (which killed ESPN here), Star India, the film and TV studios, and more. Some of these would get Disney into businesses that they don't currently play in, such as the Sky UK News channel, so this could result in a very different Disney to the one we know today.

I'd expect this is going to be a tough deal to get past the regulators. If we presume that the US government is acting in good faith in trying to block the AT&T/Time Warner merger, then it would be difficult for them not to oppose this deal given the competition concerns are much clearer.

That said, I'd rather Disney own Sky than Rupert. Even if James is on the board.

Replies (12)

December 13, 2017, 5:57 PM · Surprised there has not been more traffic on this topic here on this. In the movie nerd circles, which I solidly fall, it seems to be mixed opinions. I am fine with it, since Fox can't seem to stop screwing things up, but I have to admit, the more less studios exist, the less creative freedom will exist. Anyway, theme park wise, Universal will still get to use all of their rights like Simpsons and Marvel, but Simpsons will be under the Disney corporate umbrella. Marvel will get the Xmen and Fantastic Four. Of course, Fox has totally screwed up the Fantastic Four and squandered Marvel's best villain, so that will be good to get it back. The real question is whether Disney will allow the creative freedom of the more adult IPs to continue. There is a place for Logan and Deadpool, and they really do not need to tone it down. If they continue the Alien franchise, they do not need it to be PG-13. They do not need to get in James Cameron's business with the Avatar movies. And finally, they need to release the unedited, original theatrical Star Wars films. The bottom line is Disney is going to have to find a way to separate out the Fox brand and the Disney brand to allow creative freedom but improve on the poor decisions Fox has made. AND get that Fox fanfare back in the Star Wars movies. ASAP.
December 13, 2017, 9:11 PM · One thing I will never understand is why people are so passionate about the 20th Century Fox intro in the Star Wars movies. I mean really, it makes 0 difference in the movie, I don't get it?? Seems like a silly thing to be upset about.
December 13, 2017, 9:21 PM · That was a joke. I don't really care that much. I would like to see the original theatrical version, and many people would not think that is trivial. Actually, when you think about it, much of this is trivial, is it not? I mean in the grand scheme of things with what is going on in the world, Marvel movies, theme parks, and movie intros all make 0 difference, but it does give people an escape in difficult times, so I suppose it can matter.
Edited: December 14, 2017, 7:11 AM · Okay, the Deal is done.

JAMES MURDOCH is NOT going to Disney - or at least he's not named in the corporate structure yet. BOB IGER stays in the big chair until 2021.

The FOX BROADCASTING NETWORK (and its O&O Stations), FOX NEWS, FOX BUSINESS, FOX SPORTS and its regional network of stations will be spun out into a new business, tentatively called "New Fox" - so these are NOT included in the deal.

Pretty much everything else that hasn't already been shifted into News Corp (the print business) is going to Disney.

21st Century Fox's Shareholders will own 25% of Disney. The Murdoch's own 17% of 21st century fox, giving them 4% of Disney. The deal is worth $66Bn between stock and debt, and leaves the combined group with 40% of the box office.

https://www.theguardian.com/media/2017/dec/14/rupert-murdochs-60bn-disney-deal-reshapes-his-media-empire

December 14, 2017, 9:17 AM · Disney owns Avatar and Aliens. Imagine the possibilities. Is that why they closed Stitch? Could Alien Encounter be returning with Sigouney Weaver and the Xenomorph? Too late for the Great Movie Ride, but save the animatronics.
Edited: December 14, 2017, 9:32 AM · There was an interesting theory in the Washington Post about this acquisition. A sports writer surmised that the move was predominantly made to bolster the appeal of ESPN and to prop up the sagging network. While the acquisition does not include FS1, FS2, or Big Ten Network, it does include Fox-owned regional sports networks (RSNs). Those networks own the exclusive rights to broadcast local MLB, NBA, and NHL teams as well as other local sports programming (WNBA, college sports, and other local sports). ESPN is not currently in the local sports television business, and this acquisition allows them to enter a very lucrative market without having to purchase rights and setup individual networks. Fox-owned RSNs include some of the most profitable regional networks in the country including YES (Yankees), Fox Sports West (Angels, Clippers, and Ducks), and Fox Sports Southeast (Hawks, Braves, Hornets, and Grizzlies). Most would probably say, what's the big deal here - Well, RSNs are routinely the most important channels to a local cable package. While people are continuing to cut the cord at a high rate, those that are remaining cite their local sports network as the primary reason why they can't cut the cord. Also, those that aren't interested in cutting the cord and instead like the idea of a single-price multi-channel television model (gaining appeal in the world of dozens of individual streaming subscriptions), say RSNs are one of the top 5 channels watched on their cable packages. ESPN can now leverage ownership of these RSNs to increase their cable revenue compensating for losses to cord cutters. Additionally, while many of those channels cannot stream directly to consumers (cable providers own the streaming rights), Disney/ESPN could pull those under the ESPN streaming umbrella once current contracts end. So, even those that want to cut the cord but still want their RSN, ESPN can keep them (and their revenue) in house by streaming RSNs direct to consumers.

So, while those on the movie side will tout the unification of Marvel properties, owning everything Star Wars now (Fox owned broadcast and licensing rights of the Lucas-directed films), and synergy with Avatar and its sequels, the biggest win for Disney here is in the sports arena, where the RSNs accounted for nearly 30% of the value of what Disney has acquired.

December 14, 2017, 11:02 AM · To bolster the sports theory. Sky Sports is the ESPN equivalent juggernaut in the U.K. and in other European regions too. At the moment. 21CF owns a just-as-good-as controlling stake in Sky and is seeking approvals to buy the rest. At the moment it’s with the regulator, with issues at Fox being the reason for scrutiny, as well as the murdochs holding in NewsCorp. This stake would go to Disney, and if the deal is approved, Disney gets Sky.

If the 21CF-Sky deal is rejected, there would be nothing stopping Disney reordering the deal. As Disney doesn’t have Fox’s baggage, doesn’t own any newspapers in the U.K., and is limited to a licensing deal with BT for use of the ESPN name and their O&O Disney pay channels, there would be no grounds to reject it.

That would make Disney the king of sports on two continents - Three if FOXTEL Australia is also included (I haven’t heard that come up), and maybe another if Star India is big in sport.

December 14, 2017, 11:07 AM · OK, Anton M has just made my day and removed any reservation I may have had. Put the Alien in place of Stitch. You, sir, in addition to a little election in Alabama, have restored my faith in humanity.
December 14, 2017, 1:21 PM · Chad H and anyone else who likes to comment on this--I think, the european regulators are likely to hold up disney getting 100 percent of SKY.

The sexual harassment reason to hold up the sky purchase by fox was totally bogus. Even, if the UK law allows them to do that based on "moral grounds", FOX got rid of the CEO of fox news, and (it turns out from the all the major source new reports), FOX news didn't seem to have any more of a sexual harassment issue than the major hollywood studios and NPR/PBS, the ny times and other major newspapers etc.

The real grounds that the UK regulators that is arguably, maybe legitimate was FOX having too much media concentration. Yes. disney does not own any newspapers, but a combined Disney/fox/sky would very arguably
be too much sports broadcast concentration sufficent to block, the sports part of the merger, in europe.

Despite, the president liking some of fox's news programs, I am also not convinced that would not stop his having no objection to the regulators at the american FTC, blocking the merger of the 21 sports regionals. I don't think, the president would push for a block, but i think he may also not care very much, if the FTC wants to block the sports regional part of the sale.

Sale of the fox movie theatre brand, is of no market consequence. 2 new major competitors (amazon and netflix), have just emerged in the last 5 years. Elimination of one (FOX), still leaves one more than there was for decades. the demise of the weinstien movie company reduces competition. No one I have seen argued that weinstien as a corporation should not go away. Furthermore, a combined FOX/disney movie theatre presence is at most a 40 percent market share. Many companies in many industries have that. Plus, disney movies have been on a unbelievable run the last 3 or 4 years. that degree of success is unlikely to continue. sooner or later, the marvel universe and star wars may remain profitable, but is not going to gross as much per movie as they have the last 3 or 4 years. So. the real combined market share is somewhere between 30 and 37 percent. plus, netflix/amazon claim they are going to drastically increase how many movies go the theatre in the next several years

December 14, 2017, 1:38 PM · The RSNs would not be a barrier for the FTC or any other regulatory agency. They are going from one sports network to another (Fox to ESPN), and the competitive environment will not change one bit from this planned transition. Most major US cities have more than one RSN (most of the others are owned by Comcast/Universal/NBC BTW), so by simply re-branding Fox RSNs to ESPN does not change the landscape at all.
December 14, 2017, 1:40 PM · >>>if the UK law allows them to do that based on "moral grounds",

The term we use is "Fit and proper person [to hold a broadcasting license]"

>>>The real grounds that the UK regulators that is arguably, maybe legitimate was FOX having too much media concentration. Yes. disney does not own any newspapers, but a combined Disney/fox/sky would very arguably
be too much sports broadcast concentration sufficent to block, the sports part of the merger, in europe.

I think that battle has already been fought by Sky in the UK and resolved. It was because of concerns over Sky's dominance in the sports field that they introduced rules preventing Sky from owning all the Football rights, I think they're only allowed to have 4 of the 6 "packages", leaving 2 for competitors. ESPN already tried and failed to gain traction with those two - First pairing with Setanta (who failed), then on their own - which they walked away from and handed off to BT. BT seem to be investing a lot in sport. Although BT has the rights to use the ESPN name until 2021, I don't think ESPN actually have any direct activity.

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On a completely different subject, I've been scratching my head wondering Why Rupert wants out of the TV game. I can't help but wonder if it goes back to Lauchie being outplayed by CBS in over Network Ten Australia.

For those who don't follow international media business stuff... Ten is the traditional third place commerical channel in Australia, traditionally aligned to Fox and CBS for imported content (Seven is traditionally aligned to NBC and Disney, Nine is traditionally aligned to ABC and Time Warner). Lachie had a big stake in 10, and was a major player on the board, but the network was losing money hand over fist. It went bankrupt, but during the Administration (Equiv of Chapter 11) process made an offer to take control of the network - presenting it as the only game in town.

To everyone's suprise, CBS tabled a better offer which was supported by a majority of creditors (including crucially the Staff of the network), and in a huff Fox pulled their programming agreement - signifiant as the last time Ten was Bankrupt* in the early 90s, it was Bart Simpson who saved the network - they pretty much had nothing else of note (the Media landscape, and the quality of the Simpsons of course is very different today).

*Ten has traditionally struggled... but during the late 90's was the most profitable network in Australia... but then owner (CanWest Global) go bankrupt. The network is cursed I tell ya.

I wonder if this is Rupert realising that Lauchie isn't up to the job. He can't bring himself to sell the news business - Rupert inherited News Corp from his dad, although much to his annoyance many of the crown jewels had been sold off between his dad's passing and him coming of age. He personally built it into the international force that it is. He doesn't bleed blood, he bleeds Printer's ink. I may hate his poltiics, and his overweight impact on the media landscape, but full kudos to his achievements.

Then again, James has shown himself to be very competent when he was running Sky. He doesn't seem to have a place at all in this new reality.

December 18, 2017, 12:52 PM · I don't think this is going to affect the parks too much right now.

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