Disney Chief Executive Robert Iger said the acquisition from Fox reflects increased consumer demand for a diversity of entertainment experiences.
“We’re honored and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building, and we’re excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings,” Iger said in a prepared statement.
Iger, who was going to step down as head of Disney in 2019, agreed to stay on until 2021 because of the Fox deal.
Pachter believes the movie business would not be impacted by a combination of Disney and Fox.
“The TV business could be but honestly with Amazon and Netflix out there and AMC, Lionsgate and CBS bidding for content I don’t think it matters there is that much concentration with Disney,” he added.
Neil Macker, an analyst with Morningstar Inc., in Chicago, who follows Disney, said in a research note on Dec. 15, that he was surprised by the deal because he thought Murdoch was interested “in finishing the construction of his media empire, not tearing it down.”
By selling off the television studio, the Fox broadcast network would need to be open to buying programming but would not benefit from the longer tail of hit shows, Macker said in the note.
“Given the smaller size of the remaining company with the projected net debt of $7.5 billion, the Murdochs could either take the stub company private or merge it with News Corp.,” Macker wrote.
The storied 20th Century Fox Film Corp. was founded in 1935 as the result of merger between Twentieth Century Pictures and a financially strapped Fox Films. Over the years, the fortunes of the studio ebbed and flowed. In 1977, it released “Star Wars” and would follow with five more films in that franchise, which are owned by Disney after its acquisition of LucasFilm Ltd. in 2012 for $4 billion. Fox retained the theatrical and home distribution rights to six “Star Wars” films.
In addition, to “Star Wars,” Fox has also released “Avatar,” the highest grossing film of all time; the six films in the “X-Men” franchise, and its spinoffs, “The Wolverine” and “Logan;” and “Deadpool.” Its television shows include “The Simpsons,” “Family Guy,” “Futurama,” “New Girl” and “American Horror Story.”
Tuna Amobi, senior analyst with CFRA Research in New York, said considering the reach of the Disney empire, Fox franchises could get a new lease on life under the new ownership.
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