One of the biggest entertainment industry acquisitions since The Walt Disney Company bought Lucasfilm is now complete. On March 19, 2019, Disney acquired the bulk of 21st Century Fox’s movie and television assets for a whopping $71.3 billion, according to Variety and other trade outlets.
That gives Disney full control of most of 21st Century Fox’s major properties, which include Marvel franchises like the X-Men, the Fantastic Four, and Deadpool, James Cameron’s Avatar series (including the upcoming sequels), The Simpsons, indie film powerhouse Fox Searchlight, and more. The deal also grants Disney majority shareholder status in the streaming video service Hulu — a curious component of the deal, given that Disney has its own service lined up that will serve up properties like Marvel films, Star Wars films, and multiple others directly to your living room.
The acquisition does not include Fox News, Fox Sports, or the Fox broadcast network, which will continue to operate as their own entities under an umbrella called the Fox Corporation.
The deal was first rumored back in November 2017, and the details were officially announced that December. It wasn’t a smooth transition, however. While Disney originally agreed to buy Fox for $52.4 billion, Comcast posted a competing bid in June 2018, forcing Disney to pony up even more cash. More than 4,000 people are expected to lose their jobs once the merger is complete, according to The Hollywood Reporter.
Wall Street rewarded Disney for the successful deal with increased stock prices, while Ryan Reynolds called out Deadpool’s new home on social media.
The future of Marvel, Star Wars, and much more
Fox has had tremendous success in recent years with its X-Men films franchise based on Marvel Comics characters such as Wolverine and Deadpool (less so with the Fantastic Four superhero team), and with Marvel Studios already under the Disney banner, the deal could bring audiences one step closer to a fully unified Marvel Cinematic Universe.
Disney already has plans in motion to remove its Marvel, Lucasfilm, and Pixar projects from streaming titan Netflix as it prepares to launch Disney Plus, its own streaming service that will host these and other sci-fi, superhero, and animated content. The gritty Marvel television series set in the MCU that Disney partnered with Netflix to produce — including Daredevil, Jessica Jones, and Luke Cage — have been canceled, although the existing episodes will probably live on Netflix for the time being.
The deal also could bring the X-Men and Fantastic Four franchises into the MCU proper, but a full-fledged reboot of any and all former Fox properties will likely be necessary to integrate them into the already established live-action Marvel continuity — similar to what was done with Spider-Man in Marvel and Disney’s Captain America: Civil War, which was followed by Sony’s Spider-Man: Homecoming. While the idea of a fully integrated live-action cinematic universe might sound like music to Marvel fans’ ears, Disney’s affinity for catering to an all-ages audience with its superhero projects might not align with the recent, edgy evolution that was so successful for “R”-rated X-Men spinoff movies Deadpool and Logan.
Currently, 21st Century Fox has X-Force and New Mutants films in the works, as well a third Deadpool adventure. Deadpool star Ryan Reynolds has been vocal about the Disney-Fox deal since it was first announced, responding to the news with a healthy dose of Deadpool snark.
While the unified Marvel Cinematic Universe is the crown jewel when it comes to 21st Century Fox-owned properties, there are plenty of other interesting franchises in play apart from superhero fare. Fox is also the home of the Alien and Avatar franchises, as well as the Planet of the Apes series. The deal gives Disney ownership of franchises which account for six of the 10 highest-grossing movies worldwide, and seven of the 10 highest-grossing movies domestically.
The deal also puts the entirety of the Star Wars universe under one banner. The original Star Wars trilogy and the prequels (Episode I-VI) were made under the 21st Century Fox banner, and now that the deal is complete, Disney finally owns the entire cinematic franchise.
The brave new streaming world
The fount of franchises under Disney’s belt is just one small facet of the deal. It could also potentially mean a complete shift in the world of streaming as we currently know it, with a litany of intriguing implications.
Ahead of this latest news, Disney announced plans for the launch two separate streaming services: One for its sports network, ESPN, and another delivering its content like Marvel movies and live-action spin-offs, Star Wars films, and even Star Wars television shows. But that’s just the tip of the streaming iceberg. Previously, streaming service Hulu was co-owned by Disney, 21st Century Fox, and Comcast, each of which held an equal stake. Time Warner owned another 10 percent. Now, Disney holds a majority stake in Hulu, and Disney CEO Bob Iger clarified how the company envisions its planned streaming empire in the wake of the deal going public.
As reported by Deadline, Iger laid out some intriguing plans for the service.
“Owning a third of [Hulu] was great but having control will allow us to greatly accelerate Hulu into that space and become an even greater competitor to those already out there. We’ll be able to do that not only by putting more content in Hulu’s direction but by essentially having control to the extent that managing Hulu becomes a little bit more clear, efficient and effective,” he said.
He then added some subtle braggadocio in reference to the film and TV property powerhouse that is (and/or will be) Disney.
“We do know that if we decide to increase our original spending on Hulu, we certainly have the intellectual property-creating possibilities far more than we did before this acquisition,” he said, later adding, “We believe creating a direct to consumer relationship is vital to the future of our media businesses and is our priority.”
It would appear Iger sees Hulu as the service for the more adult-oriented programming and content — both movies and television — that come from the Fox deal, while Disney Plus will deliver the more family-oriented content that encompasses its Lucasfilm, Marvel, Disney, and Pixar projects. Meanwhile, though Fox Sports will stay in the hands of Rupert Murdoch and Co., Disney’s ESPN-based sports streaming service will be supplemented by Fox local and regional sports channels, which will reportedly be part of the deal.
Netflix in trouble?
The acquisition of a controlling stake in Hulu appears to be as much of a deciding factor in the deal as the Fox movie and television properties, as Disney is clearly keen on controlling its own fate in the streaming video marketplace.
Iger indicated that Disney’s stake in Hulu will help it “become an even more viable competitor” to the likes of Amazon and, especially, Netflix, which has been carving out an increasingly large place for itself in the world of direct-to-consumer original video content; with the help of its worldwide rollout, Netflix has acquired more than 100 million subscribers globally. Both Netflix and Amazon have also won Primetime Emmy Awards for their original series in recent years, and their shift toward original content and away from licensed programming has proven to be a wise move, given how many networks and studios — including CBS, HBO, and others — have invested in their own streaming services in recent years.
Given the surprising popularity of Netflix’s content, and Amazon Video’s mixture of critically acclaimed series and a near-unlimited flow of cash, the Disney deal doesn’t appear to threaten either streaming service in the immediate future. Whether the deal will ensure Disney’s future as a dominant force in the direct-to-consumer streaming video marketplace remains uncertain, however, and opinions are mixed.
“What we don’t understand is why Disney would want to compete with Netflix, and other new media players, as a new media content aggregator,” wrote Wall Street analyst Doug Creutz in a note to clients (via CNBC). “With even more players entering the fray (Apple, Google), and a likely willingness by at least some of them to play a long game of loss leadership in content aggregation to support other business objectives, we expect pressure on content margins.”
If there’s one thing the Disney deal seems to indicate loudly and clearly, it’s that the days of one or two streaming services providing a massive selection of movies and television produced by a wide array of studios and networks are well on their way to being over. Welcome to the brave new streaming world.
Updated on March 19, 2019: New information added as the deal nears completion.
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