Disney took another major step toward world domination today as the company announced it reached an agreement with Rupert Murdoch to acquire 21st Century Fox.
According to the companies, the Walt Disney Company will get 21st Century Fox’s film and TV studios and cable networks (including the FX Networks and National Geographic), rights to Fox’s film franchises (including Star Wars and Marvel properties), all Fox regional sports networks, and Fox’s stake in Sky of Britain, Star of India, and Hulu.
Meanwhile, Fox will retain ownership of the Fox Broadcasting network, Fox News, Fox Business, FS1, FS2, and the Big Ten Network. Another condition of the deal is that Robert Iger will remain the Chairman and CEO of The Walt Disney Company through at least 2021.
As we on Cut Cable Today have said before, the deal makes a lot of sense from Disney’s perspective. It allows Marvel to integrate the X-Men, Deadpool, and the Fantastic 4 into its cinematic universe (the rights to those characters were sold to Fox in the ‘90s), gives Disney unfettered control over its planned Avatar trilogy and theme park attractions, and gives Disney control over distribution for Star Wars films (Disney bought Lucasfilm in 2012, but Fox retained the distribution rights for the films).
The deal also dramatically increases Disney’s viability in the streaming industry. For one thing, it gives Disney a broader sports offering for its ESPN+ service, scheduled to debut in the spring of 2018. The service would not only be able to offer exclusive access to all of ESPN’s coverage but also be able to offer more regional coverage from Fox in a sort of Netflix-style aggregate content format. That would certainly make ESPN+ more of a must-have for cord-cutting sports fans.
And then there are the massive implications this deal has for Disney’s planned streaming service, which is estimated to launch sometime in 2019. As we’ve previously mentioned, this deal gives Disney the right to pull roughly 1/4 of Netflix’s most popular content from the service, which would make the Disney streaming app much more of a necessity.
Of course, there are a lot of questions as far as how this acquisition will affect other streaming services. For starters, this deal gives Disney a controlling interest in Hulu, so we’ll have to wait and see just how that will affect the service’s offerings and strategy. Other services may also have to negotiate new deals with Disney in order to continue offering ABC, ESPN, Fox, FX, FXX, National Geographic channels, and Fox regional sports channels, which could alter pricing and channel availability for those services.
Particularly, there are questions about how the deal will hit services like Sling TV, which groups channel packages based on ownership. If Sling TV had to group Disney-owned channels together, it would likely result in fewer subscribers to its Sling Orange + Blue package (its most expensive plan). Ultimately, that might mean even bigger pricing and structural changes on the horizon for Sling TV packages—and the service’s subscribers.
And of course, the biggest question right now is whether or not the deal will be approved by antitrust regulators. In recent years, deals like this one have gone through without much of a hitch, but with the Justice Department’s recent move to block AT&T’s acquisition of Time Warner, everything’s up in the air.
Assuming the deal is approved, we’ll be feeling the implications of this acquisition for quite some time. We’ll be sure to keep you updated as we learn more so you know how it affects cord-cutting. Be sure to follow us on Facebook and Twitter to get the latest updates.