Behind the Merger: 21st Century Fox & Disney

With the media industry in a constant state of flux due to increased competition from streaming sites, declining box-office returns, and ever-shifting revenue models, increasingly, mergers between industry giants have become common.

The latest discussion on investors’ minds — the potential merger between Rupert Murdoch’s 21st Century Fox and the Disney Corporation.

While Fox has been floating potential buyers around for awhile now, insiders are reporting that the Disney merger is as close as it’s ever been.

Like most mergers in the digital age, this one is all about connection; Disney has been working for years now on expanding its digital footprint, earlier this year announcing that they would be launching its own streaming service to compete with the likes of Netflix and Amazon. (Amazon and Netflix, meanwhile, have become their own studios in an attempt to lessen their reliance on companies like Disney).

But unlike most other mergers, Disney’s acquisition of Fox has implications for its entertainment priorities as well. Disney, under long-running chairman Bob Iger, has been slowly acquiring independent studios, including Marvel, Lucasfilms and Pixar, in attempt to expand their entertainment universe, as well as their bottom line.

The future of the Marvel Cinematic Universe is at stake in the Fox talks. Fox has long held the rights to Marvel’s X-Men, a popular series that has grossed over $2 billion worldwide.

Meanwhile, Disney’s Marvel films continue to be one of its best-selling assets, raking in over $12 billion since it launched in 2005.

The combination of the studios would allow Disney to dive even further into the MCU, combining characters from their wildly popular Avengers franchise with long-standing fan-favorites like Professor X and Wolverine.

The merger would also allow Disney to access Fox’s portfolio of television networks, including FX and Nat Geo, as well as their controlling stake in the streaming service Hulu. The assets afforded by such a merger — which include critically acclaimed shows like Atlanta and American Horror Story — could make Disney’s streaming service more alluring to audiences when it does launch in 2019.

Media critics, however, are concerned by what a potential merger with Disney could mean for some of Fox’s edgier offerings. Even with an increasingly diversified and expanding portfolio of creative works, Disney has been clear in drawing a line for media and talent associated with the brand, working to maintain their image as a family-oriented company. Franchises like Deadpool, for example — the crass, violent, and wildly popular superhero movie from Fox — could suffer from restrictions, such as limited-availability on a Disney-owned streaming service.

Disney has also increasingly turned away from producing original movies, instead focusing on sequels, known characters, and live-actions of their animated classics. (And with good reason; the live-action Beauty and the Beast, released last year, has grossed over 1 billion worldwide).

However, a merger would mean giving the already-dominant Disney even more clout in the entertainment industry, a move that could bristle federal regulators. The Trump administration has not been kind to mergers so far.

An announcement from the companies is expected in the coming weeks.

Leave a Reply

Your email address will not be published. Required fields are marked *