What's next for theme parks after the Disney/Fox deal?

December 14, 2017, 11:51 AM · The Walt Disney Company confirmed this morning what everyone had been reporting early this week — that it will obtain the studio assets of 21st Century Fox. That means Disney gets control of Twentieth Century Fox, Fox Searchlight Pictures, and Fox 2000, as well as their associated franchises, including Marvel's X-Men, Fantastic Four, and Deadpool as well as Avatar, The Simpsons, and Planet of the Apes, among others.

Disney also gets a bunch of cable and pay TV networks, including FX Networks, National Geographic Partners, Fox Sports' regional networks, as well as Fox Networks International, Star India, and Fox's share of Sky and Hulu. Fox will spin off Fox News, Fox Business Network, FS1, FS2, and Big Ten Network into a new company that Disney will not own.

So what does this mean for theme park fans? Disney already owns way more IP than it can get into its parks. Disney's development plans for major theme park attractions around the world are pretty much set through 2021, with major Marvel development plans for Disney California Adventure on deck immediately after that. Anything coming to the table from Fox would slot in after those projects... assuming that there's anything from Fox that Disney wishes to pursue in its theme parks.

Disney can't use X-Men and Fantastic Four at the Walt Disney World or Tokyo Disney Resorts due to Universal's licensing deal with Marvel. The Simpsons are off the table in the United States due to a Universal licensing deal, as well. Disney already has an Avatar land in Florida. What's left? Planet of the Apes offers some great world-building opportunities for a next-generation, immersive theme park land. But where would it fit within Disney's theme park portfolio? I don't know that Planet of the Apes hits a beat different enough from Star Wars and Avatar to cover any market space that those franchises don't already deliver to Disney.

As for animation, Fox's line-up is relatively weak. There's Ice Age, but do we really want to tempt Disney Animation with a Scrat/Olaf cross-over featurette to slap in front of the next Pixar flick? (Okay, actually, that might approach some Tommy Wiseau-levels of awesomeness.)

The biggest impact on the theme park industry, then, might not come from this deal... but from the next deal that this acquisition inspires. Today the U.S. Justice Department filed suit to stop the proposed merger between AT&T and Time Warner, which owns the Warner Bros. studio. And the FCC just voted to end Net Neutrality, which means that ISPs can now choose which websites and services they will allow you to access.

Disney acquired Fox in large part to expand the library of content it could offer on its own Netflix-style streaming services. But Disney does not control an ISP, which means that in a post-Net Neutrality marketplace, it might find itself unable to reach any viewers with its new services, should AT&T, Verizon, and Comcast (which owns NBCUniversal) decide to play hardball and favor their own associated content providers, instead.

The Disney/Fox deal and Net Neutrality decision will force other content providers to consider their position in the marketplace. Does Comcast make a play now for Warner Bros., if AT&T isn't going to get that studio? A Warner Bros./Universal deal has been rumored for years, only subsiding when AT&T made its play for Warner's parent company. Does Verizon make a play for National Amusements to get control of Viacom's Paramount Pictures and CBS? Or does someone try to buy Sony Pictures?

And when does Amazon, which is developing a huge studio presence and has an obvious, massive financial interest in maintaining open access to Internet users, decide to make a deal, too?

If the new, vertically-integrated business model for entertainment is ISP/movie studios/TV networks/streaming services/theme parks, then the industry is facing more mergers and acquisitions as companies look to re-position themselves along that model. Right now, Comcast is the only one there. But AT&T trying to get there, and Disney is bulking up, too. Theme parks — with their power to promote brand affinity and customer spending on affiliated franchises — will be a part of this.

We don't know exactly how just yet.

Replies (26)

December 14, 2017 at 12:07 PM · Go read Russell Meyer's comment in our discussion board thread on the Disney/Fox deal. I think he's spot-on - this is as much about propping up ESPN by giving it the rights to Fox's regional sports networks as it is any other IP in Fox's portfolio.

That said, I think that Disney's lack of ownership of an ISP exposes it to risk... unless it is betting on a Democratic wave in 2018/2020 reestablishing Net Neutrality and leaving the ISPs in an exposed position relative to pure content providers (such as Disney).

December 14, 2017 at 12:24 PM · This really has nothing to do with expanding the Disney theme park universe, it's all about content and going head to head with Netflix, Amazon, etc. The ESPN problem also looms large in this decision. It will be interesting to see if the FCC blesses this and I can't understand why Disney would agree to a 2.5 Billion dollar payment to Fox if the deal doesn't go thru. Also can't quite square Disney's culture and political mindset (yes, Disney is political too!)with the one at Fox - even though they're not picking up Fox News, but still there is a disconnect. Iger's been good for Disney shareholders and the Board, but he's really just bought other properties. His legacy is almost that of a corporate raider more than a leader who is finding ways to take the company to the next level within it's own ranks and talent and creativity. Pixar, Lucasfilms, Marvel and now Fox...eventually everything anyone will know of Disney is from other people's portfolios.
December 14, 2017 at 1:01 PM · As to robert's ISP, point. This may be a long term solution to that. My educated guess is right now, disney does not know whether how the rules of net neutrality will shake out. If net Neu is on, then disney can go 100 percent to strive to win the online streaming wars. If the net neu rules, go away and the ISP's attempt to get large amounts of money from them, for the large amount of data they stream to customers, Disney can later
strike a deal, with the ISP's to sell their streaming services to them, including the rights to stream (or broadcast), the huge disney/fox library of movies.

that is a huge incentive for the ISP's to give disney very fair terms, where they could feel free to obtain large amounts of money from netflix/amazon in a non neutral world.

December 14, 2017 at 1:32 PM · I think the Net Neutrality rollback offers mostly positives for Disney/Fox moving forward. It certainly makes owning an ISP a much more favorable venture than before, but also would allow Disney to leverage its newly increased content library to get the best partnerships to deliver that content to the most users if they choose not to acquire an ISP. I think market forces will prevail, and the new Disney/Fox is in a much more powerful position now than it was not only before the announced merger but also prior to the Net Neutrality rollback.

Essentially, preferred status with most ISPs (I doubt any ISP will "block" access to content - perhaps throttle back to make other preferred content faster, but not completely block) will be virtually guaranteed with Disney's library and planned streaming service that will now be on level footing with NetFlix, Hulu (which Disney will now own a portion), Apple, and other direct to consumer content providers. What ISP would dare throttle back ESPN (and all of the newly acquire RSNs) during a live event?

December 14, 2017 at 1:43 PM · Wouldn't Disney want to make a deal with Universal? Wouldn't Universal find it's in an untenable position with Disney owning so much of it's IP in their theme parks?

What if Universal exchanges Marvel for Simpsons especially since The Simpsons doesn't fit artistically in Disney's portfolio. In exchange for the IP transfer in broadcast rights and library, Universal gets to phase out Spiderman and eventually all theme parks rights reverts back to Disney. Immediately, Disney gets theme park rights to all characters not already in Universal theme parks so the whole deal unwinds.

I would think Universal would want to acquire another studio for better parity although Time Warner (Warner Bros) will attempt to merge with AT&T. Not sure if the merger will go through since the DOJ just filed a lawsuit to prevent it.

December 14, 2017 at 1:44 PM · russell. i appreciate your comments. I occasionally stream both fox sports go and espn, both through a comcast cable tv subscription. Thing is ESPN streaming has very regular problems, with freezing requiring restarts and losing part of the game, in the process.

I have observed fox sports go, to have these problems, much less of a percentage of the time. So. it is not my internet connection, is it not comcast isp, slowing anything down. The ESPN streaming platform, is not very technically proficient. For whatever reason, disney have not hired competent personnel or provided enough resources in this area. Perhaps, to discourage cord cutting????

If the problem, was technical knowhow. Disney will now get assistance from the european sky ISP. Part of fox, that runs both ISP's in europe and sports and movie streaming.

December 14, 2017 at 1:45 PM · For market forces to pervailt hough, there needs to be a competitive market. Here in the Uk where I can choose dozens of ISPs, Market forces ensuring net neutrality might work - in the US where you have your phone co, your cable co, and maybe the local racing pigeon enthusiast, you don't have a competitive ISP market. I have no problem in believing that Adam Smith would have seen the ISP as being in the same place in the Information economy as the ports in his commidity based economies - Ports he believed should be a regulated monopoly and not subject to the whims of the free market.

>>>What ISP would dare throttle back ESPN (and all of the newly acquire RSNs) during a live event?

The one that wants you to pay an extra $10 per month. I worked for an ISP who tried charging extra to let people stream.... those conversations were not fun.

December 14, 2017 at 1:59 PM · But see Chad, that's exactly why rolling back net neutrality will work. Too many people in the US view internet access as a "utility". It's not, but because it was treated as such for so long, Americans have a hard time viewing internet access as anything but, and ISP have consolidated very much like regional utilities. With no net neutrality in the way, investing, improving, and owning an ISP now becomes a very lucrative proposition, and I think we'll see a number of new players enter the market. As it stands now, internet doesn't have to be delivered through wires where there are limited players because of invested infrastructure (Verizon, AT&T, Time Warner, Comcast, etc...). Internet can be delivered wirelessly, and the FCC just recently auctioned a huge swath of bandwidth that is now in the hands of companies that can forge nationwide networks.

I agree that under the current setup of wired ISPs in the US, this could create a huge mess for consumers, but I think by rolling back net neutrality it will actually blow the doors off internet access to the point where consumers have more choices than ever before. Call me a glass half full kinda guy, but internet access in the US wasn't getting any better under the status quo (speed and coverage lags far behind other countries in both Europe and Asia).

December 14, 2017 at 3:00 PM · The problem as I see it is that much of the US has localized monopolies already concerning isp. In Huntington Beach I can choose form Time Warner or Satellite and that's it.
December 14, 2017 at 3:11 PM · 4 more years of Iger.

Oy...

December 14, 2017 at 3:22 PM · @Anton M Why would Universal would want to make a deal trading Simpsons for Marvel?
Uni doesn't pay a dime for the theme park license. At the moment it's a hot ip bringing them a ton of money. On the other hand, Matt Groening who is the creator of the Simpsons is producing a new animated series for Netflix and said before the Simpsons will end 2019. Uni's Springfield looks spot on but it was a cheap transformation from what was there before so I think they won't care for those few years. It would be a bad deal.

Regarding this deal with Fox I'm wondering if Disney will get it's money back. How many ip's and talents are there to milk it as they do with Star Wars and Marvel?

December 14, 2017 at 3:36 PM · >>> With no net neutrality in the way, investing, improving, and owning an ISP now becomes a very lucrative proposition, and I think we'll see a number of new players enter the market.

No, you wont. Removing Net Neutrality will not change that rolling out a new network is prohibitively expensive, and any attempt to do so will see you dragged into court by the established player over access to poles and such until your business is out of money.

The way to get more players into the market is to do what Australia and Britain did. Local Loop Unbundling, and separating the incombant's wholesale and retail arms.

>>> (speed and coverage lags far behind other countries in both Europe and Asia).

Then surely the model to follow their model.

December 14, 2017 at 3:54 PM · I agree with Chad. Also, how do I sign up to get a real name on here?
December 14, 2017 at 3:59 PM · The worldwide appeal of the Ice Age franchise makes it an nailed on certainty for Disney parks around the world. They will be added to the parades before the ink is dry. They have the 4th & 5th highest grossing films of all-time, and 3 in the top 12 with not a Disney or Pixar film in sight. Disney promote where they can get a return. It would actually fit in Animal Kingdom perfectly.
December 14, 2017 at 4:12 PM · Uni's Springfield looks spot on but it was a cheap transformation from what was there before so I think they won't care for those few years. It would be a bad deal.

Universal could always return "Back to the Future" to the space. Just add better vehicle mechanics and a cleaned up print of the ride film.

The theming of the Springfield areas is meh, especially in LA. 7-11 did a better job with their stores for "The Simpsons Movie" promo.

December 14, 2017 at 4:38 PM · @86: "Why would Universal would want to make a deal trading Simpsons for Marvel? Uni doesn't pay a dime for the theme park license. At the moment it's a hot ip bringing them a ton of money."

Hey, your comment is vague. Universal doesn't pay for which license? Which IP is bringing who a ton of money?

The reason for the trade is about putting dollars into Disney's pocket so by giving up Simpsons, Disney hopes to generate more money into Disney's theme parks with Marvel. Of course, Disney might not have reason to give up The Simpsons if it feels more money can be made in television, cable, or streaming rights. The Universal/Marvel agreement ties Disney's hands with respect to the Marvel name in theme parks and what characters can be used.

The Simpsons are a lucrative IP. Perhaps instead of one for one swap, they can put together a package deal of characters for Universal's unfettered usage of some former Fox IPs in their theme parks in a trade for Marvel.

December 14, 2017 at 5:18 PM · Chad and or russell--please clarify something for me about net neutrality.
I do NOT look at it through a political lens. I notice most of the people, who are for net neutrality and from the liberal side, but I don't understand why that is?

From my knowledge with net neutrality the ones who benefit are--Websites that use a disproportionate amount of data per individual customer, like Netflix/Amazon and other streaming services and the ISP's to the extent that their customers also stream large amounts of video and the individual households, who stream disproportionately large amounts of video, versus the average household.

The ones who are hurt by net neutrality are the ISP's who cannot charge extra money to households that use a disproportionate amount of data and because of that the actual consumer households, that use disproportionately smaller amount of data than average.

Because essentially, households that are using less data, are subsidizing households that use an above average amount of data.

Until around 7 years ago, we had the eqivilent of net neutrality for water usage in california. Every residential household paid the same amount, irregardless of how much they actually used. The state legislature decided to end that, and now water usage is not "neutral".

If people use more water, they pay proportionately more. (there is actually an additional money penalty for higher usage in the form of tiered pricing, but that is due to environmental concerns)

I don't understand why households, who use more data should not pay more, than households who use less data? In the average instance, those households that use more data have higher incomes.

Am i missing something? It seems to me, that net neutrality (in the average and aggragate), benefits richer than average people, and penalizes poorer households?

Also, according to what I read on wikipedia. (there are some disclaimers, on the top of the wikipedia page), the united States, does mostly have local loop unbundling since the FCC made a ruling in 1996. It says it is market based/negotiated local loop unbundling. Since, I never heard huge news about huge numbers of lawsuits between ISP's and content creators or Amazon/Hulu/netflix and the like. It seems like the free market (with that statement, opening for lawsuits by websites), has worked pretty well and ISP's have not taken unfair advantage. Not because, ISP's are saints, but because they realize it would be an inefficient use of money, to waste on legal fees and potencial adverse court verdicts.

December 14, 2017 at 5:13 PM · I predict Disney will unload some of it's new assets after the purchase. Namely Simpsons and Family Guy, which don't really fit the brand.
December 14, 2017 at 8:34 PM · Dave, as far as the political perspective- I can't find the poll now but I read today that while support for net neutrality is nearly 90% among dems and independents, 75% of republicans support it too. Just another one of the countless examples of a major party selling out their own constituents.
Your example seems to have more to do with unequal amounts of data usage by consumers rather than unequal treatment of any given data by ISPs. In fact, even before today's events ISPs had experimented with charging based on amounts of home internet data usage, similar to how many phone plans work. I don't think that really caught on anywhere, but either way that's not necessarily relevant to net neutrality.
December 14, 2017 at 9:10 PM · This is a TREMENDOUS WIN for Disney and further solidifies Iger as one of the three great CEOs of The WDCo. Walt Disney, Eisner and Iger.

Theme parks were NOT the driving force of the acquisition.
Reacquiring Marvel’s X-Men and FF film rights was NOT the driving force of the acquisition.

The driving force of the acquisition was BEATING NETFLIX.

December 14, 2017 at 9:20 PM · Throttling people's internet is the least of my concerns regarding net neutrality. If they do that, I'll cancel my Netflix subscription and just go to a redbox or something. The real danger here is that your ISP will be able to sell your browsing history without your consent. If Ajit Pai and his proponents think rolling it back is no big deal, then why not put concrete assurances in place to protect your constituents? Ajit Pai mocking net neutrality backers is proof that this about lining his own pockets at the expense of our citizens' privacy. Another fine example of Trump Era spoils system appointments that conflict with the aims of their department.
December 14, 2017 at 9:50 PM · jeffery. represtfully. do you know who has all of our entire browsing histories? It's not comcast or ATT. It's google. How do you think, you browse for a product on a website. An then suddenly (like magic), there are ads for that type of product on some of the websites that you visit for the next several days. That is intentional.

there is no big outcry, by any major group (including democrat politicians) against it. google, reads our email, for advertising purposes to. Where is the uproar, and upset? not present.

Until someone gives me good facts to the contrary, it seems pretty obvious, that net neutrality is NOT at all a fight between companies and customers.

It seems absolutely like a fight between big business (comcast, ATT etc) and other big businesses (Netflix/amazon/disney fox combo/google-youtube, and perhaps facebook .)

December 15, 2017 at 5:55 AM · I think the main reason there is no uproar with google is because anyone can use any search engine or email that they want. Most people choose Google for these things, but there is nothing to stop Internet users from avoiding Google should they choose to. Also, as extensive and creepy as Google's info grabbing methods can be, it is a trusted brand overall. ISPs, on the other hand have already built terrible reputatons and are all consistently ranked as the least trusted brands by consumers across all industries. It actually seems that now ISPs will have the ability to force you to a certain search engine or email, or at least charge you extra for using "out of network" search engines, this taking that freedom of choice
December 15, 2017 at 8:57 AM · >>>Am i missing something? It seems to me, that net neutrality (in the average and aggragate), benefits richer than average people, and penalizes poorer households?

You misunderstand net neutrality completely.

Net Neutrality is just treating every piece of data as if it is equal, it does not at all say that ISPs cannot charge by volume. I'll break down your further queries from the top:

>>>Websites that use a disproportionate amount of data per individual customer, like Netflix/Amazon and other streaming services and the ISP's to the extent that their customers also stream large amounts of video and the individual households, who stream disproportionately large amounts of video, versus the average household.

No. Firstly, websites almost always pay for the amount of data they transfer. Home connections depnds by area or country.

Under Net Neutrality, all of that data is treated exactly the same. If you use 1gb of Netflix, or if you use 1gb of text, you are billed exactly the same. If you're billed by the bit, then you pay by the bit.

Without net Neutrality, An ISP can turn around and say "Well, we want to charge extra for video sites (except for our own video site), so we will - even though the amount of data you used is the same the fact that its video means we want more"

>>> The ones who are hurt by net neutrality are the ISP's who cannot charge extra money to households that use a disproportionate amount of data and because of that the actual consumer households, that use disproportionately smaller amount of data than average.


Nothing in Net Neutrality requires unlimited packages - pay for use is completely compatible with net neutrality (and in fact is the only model available on the market in many places that NN is the law). All it requires is that 1 bit of video be billed and treated the same rate as 1 bit of anything else.

The only people that gain without net neutrality is the ISP who can now start to use their gatekeeper power to their own advantage - demanding extra funds for carrage (as some American ISPs did from Level 3 / Netflix even when Netflix offered to provide them with effectively a free peering connection), or to anti-compeitively favour their own platforms.

ISPs haven't been taken advantage of at all.

December 15, 2017 at 9:33 AM · In a perfect world - Universal will get rid of the simpsons, which is trash. I don't just mean a re-brand either like it did in the past. Complete rebuild of the area. If Universal can purchase Warner Bros and get building on a DC land (work it out with Six Flags) and then sells the Marvel Rights to Disney (or keeps who cares really) then the consumer really wins!
December 15, 2017 at 10:29 AM · Chad is correct. Net neutrality prevented the ISPs from charging extra based on what you were looking at. It had nothing to do with the amount of data you were using. Without net neutrality your phone company who has an agreement with Yahoo can give you fast speed searxh on yahoo, and then purposefully slow the connection with google. Or charge you more to access google.

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