Amazing Disney Fox Deal Goes Through Next Week
The Walt Disney Company is the predominant force in licensed intellectual property in the world today. The gap between first and second place is poised to widen next week when a long-awaited event finally occurs. CNN has confirmed that Disney’s acquisition of most major Fox assets will go into effect next Wednesday, March 20th. Here’s everything you need to know about the situation.
The Big Date
MickeyBlog has chronicled the proposed purchase for a while now. We discussed various aspects of the proposal back in December of 2017. Toward the end of 2018, we conjectured that Disney would purchase many Fox media assets at the start of 2019. Then, the deal hit a few snags.
Brazil and Mexico expressed concerns about how the transaction would impact soccer aka futbol rights in their countries. Disney CEO Robert Iger personally flew down to Brazil to negotiate with government officials last month, eventually securing a deal.
Disney had to cede some of their sports broadcasting rights in the process to receive Brazilian approval. Once everyone agreed, the company had cleared its final hurdle to take over Fox’s assets. The delay hit Iger in the wallet, as he personally lost several million in salary and bonuses. His contract would have rewarded him for a quick transaction, something that didn’t happen.
Despite all of the unexpected setbacks, Disney may now move forward with the acquisition. Given that they had wanted to finalize it at the start of 2019, they are now in a rush. The purchase will execute within a matter of days of full international governmental approval. Brazil had a 10-day waiting period after tentative approval. March 20th is less than a week after that waiting period ends.
Explaining Disney’s Rush
You may wonder why Disney’s board of directors incentivized Iger and his team to complete the transaction. The explanation is simple. Disney has a lot going on this year.
Much of what they’re doing is in anticipation of the introduction of Disney+, the streaming service. Billed as a competitor to Netflix, this new form of content distribution will offer thousands of hours of programming to subscribers. While Disney recently announced that they will open up the vault, they conspicuously avoided saying when. It seems likely they will turn each Disney animated classic into an event rather than give viewers access to the full library immediately.
Disney undoubtedly has enough programming to launch a service that satisfies its most loyal customers. However, the company must extend the brand to the more casual fans, the ones who didn’t go see Mary Popping Returns or A Wrinkle in Time but rushed out to watch The Incredibles 2 and Captain Marvel.
To entice these potential subscribers, Disney needs more content. Iger has indicated a reluctance to purchase third-party programming, explicitly stating that it’ll be a rare move rather than a regular one. By gobbling up many 20th Century Fox films and television programs, they’ve added a massive influx of new products to fill the Disney+ library. To a larger point, they’ve introduced a great deal of variety as well.
(Photo by Chip Somodevilla/Getty Images)
Evaluating the Fox Disney Library
On March 20th, Disney will buy a ridiculously large amount of programs. I will link to Wikipedia’s complete list of shows produced or co-produced by the former 20th Century Fox company. Here are a few titles that should grab your attention:
- The Simpsons
- The X-Files
- King of the Hill
- Buffy the Vampire Slayer
- Angel
- Futurama
- 24
- Firefly
- American Dad!
- Family Guy
- Prison Break
- Modern Family
- Bob’s Burgers
- American Horror Story
- This Is Us
- The Gifted
- The Orville
Disney will receive all revenue from syndicating, licensing, and/or merchandising any of these products. Disney owns them now. Joss Whedon, who came up with the idea for Toy Story, is now retroactively a Disney man. Seth MacFarlane, someone famous enough to host the Academy Awards, now has three Disney programs on the air. A reboot of Firefly or Futurama or a second Simpsons movie would be a Disney production. It’s a lot of information to process at once.
With the list above, I intentionally skewed toward more current yet recognizable products. Some of the stuff Disney just picked up is legitimately part of television history. They own NYPD Blue now, which is, you know, a terrible fit for their brand but kind of stunning as a trivia note.
Some classic television shows like M*A*S*H, Lost in Space, The Green Hornet, the 1960s Batman series, and The Paper Chase are at least theoretically possible as parts of the Disney+ lineup. Since Disney owns them, they have that right. In short, Disney just expanded its library exponentially. Also…
Disney Gets All Fox Movies
The roots of 20th Century Fox circle back to 1935 and arguably even before then. A legal matter involving stock caused former enemies to join forces and start a new studio. As part of Disney’s transaction, they’ve just bought 84 years’ worth of movies.
The Fox catalog is incomprehensibly large, so much so that Wikipedia breaks it up into two lists. There are 20th-century titles and the ones from the past 19 years. All of it is Disney now. Some parts of this library matter more than others to the new ownership. I’ll hit some of the high points.
Due to arcane licensing laws, Fox had its own version of the Marvel Cinematic Universe. Many film analysts maintain that 2000’s X-Men is the comic book adaptation that instigated the global obsession with the concept. When Disney purchased Marvel, they couldn’t undo that agreement since Fox owned the rights in perpetuity. Fox has kept right on making Marvel movies over the past decade even though a competitor owns the brand.
Disney was so annoyed by this they revised the history of many comic book characters. Ones that were formerly mutants became Inhumans, a different class of super-powered being, one whose rights Disney owned entirely. Now that the mutants are back in the fold, the X-Men can be introduced into the proper Marvel Cinematic Universe (MCU).
Similarly, the Fantastic Four just became one of the biggest box office bombs ever with their titular 2015 release. Disney can throw that out and start over again, giving fresh life to some of Marvel’s oldest and most beloved characters.
In simplest terms, this acquisition refreshes the MCU at a time when the entirety of it is in flux. Many of the most recognizable faces from the MCU have expiring contracts. Disney can pay new (and cheaper) actors to tell the stories of the X-Men, the Fantastic Four, and many other characters whose rights it didn’t have until now.
Then there’s the Avatar factor. Disney’s gone all-in on the most successful movie of all-time by building an entire themed land around it. They did this before they had any hope of gaining the rights to Avatar. Director James Cameron has stated the intent to make four more Avatar films. All of them will fall under the Disney umbrella now.
The other critical aspect of this purchase is the Holy Trilogy. Next week, Disney will purchase ownership of all the Star Wars films created under the Fox umbrella. They already had a partial claim via Lucasfilm, but this transaction will seal the deal. Disney possesses both the company that produced those movies and the studio that paid for them.
When you look at the pieces in totality, you understand why Disney’s leadership prioritized this purchase. Yes, they are spending $71 million, but they will likely earn back that much on licensing and merchandising royalties alone. AdWeek suggests that the value of The Simpsons alone is $13 billion!
Next week, Disney will begin to receive a return on investment that’s staggering to consider in totality. Every time someone watches a licensed Fox TV show or movie, Disney will make money. When someone buys a Bob’s Burgers t-shirt, Disney will make money. And the inevitable release of an X-Men film under the MCU umbrella means that Disney gets box office, theme park, and merchandising revenue.
The acquisition is a masterstroke that cements Iger’s legacy as one of the greatest corporate leaders of the 21st century, maybe THE greatest. And it all goes down next week! As a Disney fan, your life will change for the better in just a few days.
Disney earnings – Photo credit: Drew Angerer/Getty Images
