Following today’s announcement of a mega-merger with the potential to reshape the entire media industry, some observers are already criticizing Disney’s decision to snap up $52.4 billion in assets from 21st Century Fox.
Among them, Joe Nocera suggests in an opinion piece written for Bloomberg that Disney CEO Bob Iger, who just extended his deal to 2021 to oversee the deployment of the Fox assets, had “better hope this deal isn’t his legacy. If it is, I fear he’ll be remembered as this decade’s Gerald Levin, the former chief executive of Time Warner who merged his company in 2000 with the wrong partner (AOL) at the wrong time (two months before the internet bubble burst), and orchestrated one of the worst deals in history.”
Nocera goes on to say: “Disney is characterizing the Fox purchase primarily as a way to combat Netflix. The idea is that when you gather Disney and Pixar movies, along with Fox shows like The Simpsons and Fox-produced shows like Homeland, and put them all on one streaming app, you’ll have a powerhouse that can go toe-to-toe with Netflix as well as Amazon.”
But Nocera adds: “I’m skeptical. First, Netflix and Amazon have what used to be called first-mover advantage; they have such a head start, both in terms of buzz-generating content and superb technology, that Disney is going to be hard-pressed to catch up. Second, most of what Disney is buying is tied to the cable bundle, which Disney has been loath to abandon.”
We encourage readers to click on the link above to Bloomberg to read Nocera’s full analysis.