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Rebecca Zisser

Walt Disney Company announced Thursday that it has agreed to acquire the entertainment assets of 21st Century Fox, including Fox's movie studio and entertainment television networks, as well as Fox's international TV assets. Bob Iger will remain CEO and Chairman of Walt Disney through 2021, instead of 2019, as previously announced. Fox says it will created a "New Fox" brand that consists of highly-rated news, sports and broadcast businesses.

Why it matters: The deal would give Disney the scale to take on Netflix, but first it will need to convince regulators that it doesn't pose the same sort of monopoly risk as AT&T's proposed purchase of Time Warner.

  • The transaction would include 21st Century Fox’s film and television studios, like 20th Century Fox and its rights to popular movies like X-Men and Avatar, its cable entertainment networks, like Nat Geo TV and FX, and international TV businesses, like its 39% in UK-based Sky News and Star TV in India.
  • Disney also gets Fox's 30% stake in Hulu. Added to its existing 30% stake, Disney becomes the controlling stakeowner in the streaming property.
  • The price tag is well below earlier reports, which started out at $60 billion. Reuters last night reported "more than $75 billion."

The timing of the annoucement is strange, given that The Department of Justice recently sued to block a merger between AT&T and Time Warner, with no final decision expected until the end of April at the earliest. There had been some speculation — including from AT&T CEO Randall Stephenson — that the DOJ's action would put Disney's talks with 21st Century Fox on ice. Big mergers are disruptive to a business, and even more so when regulatory approval is in doubt.

  • Disney would be required to pay Fox a $2.5 billion breakup fee in the event of government opposition. That either means Disney is quite confident in regulatory approval, or means that Fox is wary.
  • In 2015, average breakup fees were 3.2% of a deal's total value (per a Houlihan Lokey study). This one would be nearly 4.8%. AT&T only agreed to a $500 million breakup fee with Time Warner, even though the deal value is $85 billion.

The move could change the way Fox and Disney manage their existing sports and news outlets, like ABC News, ESPN, Fox Sports 1 and Fox Newc Channel. 21st Century Fox has been beefing up its sports distribution partnerships globally, with a mega-cricket deal in India and soccer rights in Latin America. But this deal would give Disney access for nearly two dozen regional sports networks (RSN's). Recode reports that Disney would have access to them should it want to market the sale of its sports platform to win future national deals. There already has been some criticism, however, of Disney effectively doubling down on a live sports strategy that has been flagging via ESPN.

For Disney, access to Fox's international assets is huge: Acquiring Fox's current 39% stake in Sky News gives Disney access to 23 million homes across the EU. Fox anticipates winning majority stake before the deal closes officially, which would give Disney even more leverage in that market. It would also give Disney access to Sky's streaming service, and Fox's Indian market assets, like Star TV. Netflix grew its international audience by $4.45 million subscribers last quarter.

Noticeably missing from the joint press release and 21st Century Fox's press release is information on the fate of Fox executive James Murdoch, who was rumored to be given a spot within Disney's empire to give the Murdochs some managerial control over the new venture. Bob Iger said on Good Morning America that Murdoch would help with the transition and that he would be discussing whether a role would exist for Murdoch or not at the new company.

Many legacy media players have been consolidating to be able to compete with tech giants, like Google Facebook and Netflix. Disocvery Communications acquired Scripps Inc. for $14 billion this summer.

Go deeper

Fintech's record year

Illustration: Annelise Capossela/Axios

Massive venture rounds into fintech companies have ballooned this year, pushing up total dollars invested — in just the first three quarters of 2021 — to nearly double the amount in all of 2020, per new PitchBook data.

Why it matters: The maturing of fintech startups means a growing number of companies are able to raise huge later-stage funding rounds as investors look to lock-in their bets.

Ben Geman, author of Generate
1 hour ago - Energy & Environment

Democrats' clean power outlook is very muddy

Illustration: Annelise Capossela/Axios

Here are two big questions as a key Democratic proposal to slash emissions from power generation flounders: how much its demise would sap climate protections, and what might replace it.

Catch up fast: New financial carrots and sticks for utilities to deploy zero-carbon power — the Clean Electricity Performance Program (CEPP) — look unlikely to stay in Democrats' big social spending and climate bill.

1 hour ago - Health

CDC: Unvaccinated are over 11 times more likely to die from COVID

Expand chart
Reproduced from CDC; Note: Data represents 30% of Americans across 16 jurisdictions: Alabama, Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Idaho, Louisiana, Massachusetts, Michigan, Nebraska, New Mexico, New York City, Seattle/King County, Wash., Utah and Wisconsin; Chart: Danielle Alberti/Axios

The CDC recently published data evaluating Americans' rate of coronavirus cases and deaths by vaccine status, providing more data on which vaccines are working best and how much protection they offer relative to being unvaccinated.

What they found: As of August, unvaccinated people had a more than six times higher risk of testing positive for the coronavirus, and were more than 11 times more likely to die from the virus.

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