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.
Why it matters: The new mega-media company will nearly double in size, giving it better leverage to compete with tech giants like Netflix for entertainment viewership and more opportunities to expand Disney's legacy sports brand, ESPN.
The deal brings together two of Hollywood's "Big 6" movie studios, Walt Disney Studios and 20th Century Fox. It will now own 7 of the 10 highest-grossing films:
- Avatar (Fox)
- Titanic (Fox)
- Force Awakens (Disney)
- Jurassic World
- The Avengers (Disney)
- Furious 7
- Avengers: Age of Ultron (Disney)
- Harry Potter and the Deathly Hallows: Part II
- Frozen (Disney)
- Beauty and the Beast (Disney)
It also increases Disney's intellectual property with new movie franchises, like Star Wars. X-Men, Avatar, Deadpool and Fantastic Four, in addition to its mega-franchises Pixar, Disney, Marvel Film. This content will be used to power Disney's new entertainment subscription streaming app that launches in 2019.
Disney will now own several new entertainment TV channels, like FX, Star and Nat Geo TV, on top of some of its own channels like ABC and Disney Channel. Some of this content could be used for Disney's entertainment streaming app, or for Hulu, in which it now has a majority stake. Sources have suggested that Hulu could feature more adult-friendly content than its own streaming app, which would give more consumers choice.
The merger dramatically enhances ESPN's sports footprint, giving Disney access to three of Fox's international sports distribution franchises: Sky Sports (UK/Europe), Star Sports (India) and Fox Deportes (Latin America). Most notably, it also gives Disney access to Fox's 22 Regional Sports Networks in the United States.
Disney now has some international distribution assets to compete with Netflix abroad.
- The merger gives Disney minority stake in Sky's streaming property, which reaches consumers directly in the U.K. and Europe and Tata Sky, a direct TV provider in India.
- Disney also gets access to Hotstar, Fox's massively-successful Indian streaming company that just beat out Facebook for IPL cricket rights.
- These direct-to-consumer assets coupled with a majority stake in Hulu create a power-distribution center for Disney to stream its expanded content portfolio all over the world.