“Walt Disney Co. agreed to a $52.4 billion deal to acquire much of the global empire that media baron Rupert Murdoch assembled over three decades, from a fabled Hollywood studio to Europe’s largest satellite-TV provider to one of India’s most-watched channels,” reports Bloomberg.
To read the official announcement of the deal from Disney and 21st Century Fox, please click here.
The Bloomberg story reports: “Holders of Murdoch’s 21st Century Fox Inc. will get 0.2745 Disney share for each Fox share, for assets including the movie and TV production house, a 39 percent stake in Sky Plc, Star India, and a lineup of pay-TV channels that include FX and National Geographic, the companies said in statements Thursday. The price amounts to about $29.54 a share, based on Disney’s closing price Wednesday. Both companies’ stocks slipped in early trading.
“Via a spinoff, [Murdoch] will continue to run Fox News Channel, the FS1 sports network and the Fox broadcast network in the U.S. Disney Chief Executive Officer Bob Iger will remain in his role through 2021, the companies said. Fox plans to complete its planned acquisition of the 61 percent of European broadcaster Sky that it doesn’t already own, which will wind up in Disney’s hands.”
When Fox’s debt of $13.7 billion is included in the deal, the transaction is valued at $66.1 billion.
Wrote The New York Times about the deal, “While the agreement is subject to the approval of antitrust regulators — and the Justice Department recently moved to block a big media company from becoming even bigger [AT&T’s deal to acquire Time Warner] — the once unthinkable acquisition promises to reshape Hollywood and Silicon Valley. It is the biggest counterattack from a traditional media company against the tech giants that have aggressively moved into the entertainment business.
“Disney now has enough muscle to become a true competitor to Netflix, Apple, Amazon, Google and Facebook in the fast-growing realm of online video.
“At the same time, the agreement means that one of moviedom’s most celebrated studios, 20th Century Fox, will be downsized, with some operations folded into Walt Disney Studios or refocused to make films designed for online distribution. Founded in 1935, the Fox studio championed Marilyn Monroe, produced classics like ‘The Sound of Music,’ released the first ‘Star Wars’ movie and, more recently, turned ‘Avatar’ into the biggest ticket-seller of all time.”
Notes The Hollywood Reporter in its story about the acquisition: “Disney is eager to take over Fox’s TV production and distribution business, but how it plans to integrate Fox’s film business is considered much more tenuous. There’s widespread speculation that the film operation, headed by Stacey Snider, will be folded into Disney and become a label alongside Lucasfilm, Marvel Studios and Pixar, reducing the overall number of films that the six major studios feed theaters each year.
“To be sure, the TV side can expect to see some dramatic changes — particularly at the now-split Fox Broadcasting Company and 20th Century Fox TV Studios. The wall between the two had crumbled over the years, all but disappearing completely in 2014 when then-studio chiefs Dana Walden and Gary Newman also assumed control of the broadcast network with the formation of the Fox Television Group. That group is dismantled by the merger, with the network staying in the Murdoch fold and the studio going off to Disney.
“Network staffers below the more nebulous CEO suite seemingly have more immediate security than those at the acquired properties, so the days leading up to the merger announcement are said to have been less stressful — albeit no less confusing — at Building 100 on the Fox lot. The recent appointment of Brian Sullivan as FNG president and COO, who is favored by 21st Century Fox executive co-chairman Rupert Murdoch and president Peter Rice, was greeted by many as a sign that he would be a player in the transition for the network. Still, it’s hard for many to imagine Fox would keep functioning in any way similar to the way it does today, with no sister studio supplying programming or profitability.”