Disney purchases 21st Century Fox for $71.3 billion, consolidates base in entertainment industry

After more than a year of the merger, Walt Disney has officially sealed the purchase of 21st Century Fox for $71.3 billion. This acquisition will lead a massive transformation as Rupert Murdoch’s film and TV studio business will boost Disney’s catalogue as it enters the TV-streaming market.

Giving a boost to its catalogue, Disney will incorporate Fox Films and TV studios, which has been housing some of the popular movies and series titles such as Avatar, Deadpool, X-Men, The Americans, This Is Us, Modern Family and The Simpsons. Apart from the film and TV business, Disney will also gain other Fox assets such as the FX networks, National Geographic and the Indian TV giant Star India, consisting of several sports and entertainment channels.

While Disney has dropped its bid for Fox’s stake in Sky, it will still get other Fox properties such as Indian satellite TV provider Tata Sky and Dutch-based media company Endemol Shine Group.

Currently, Comcast, Disney and Fox now own 30% apiece stake in streaming service Hulu, with AT&T owning the other 10% through Time Warner. But with this acquisition, Disney will also have Fox’s 30% share, giving Disney a controlling stake of 60% in the streaming service. According to the reports, Disney plans to keep operating Hulu for general programming, with its own Disney Plus service offering more family-focused fare.

In a statement, Robert Iger, Chairman and Chief Executive Officer of Walt Disney Company, said, “This is an extraordinary and historic moment for us – one that will create significant long-term value for our company and our shareholders. Combining Disney’s and 21st Century Fox’s wealth of creative content and proven talent creates the pre-eminent global entertainment company, well-positioned to lead in an incredibly dynamic and transformative era.”

Recently, Disney announced its plans to launch a streaming service, Disney Plus, later this year.

According to reports, the service aims to challenge Netflix for future audience share through its content. The network plans to boost its catalogue with classic cartoons, Star Wars and many of the Marvel characters. After the takeover, the network can add major titles -- Simpsons, Modern Family, This Is Us Avatar, X-Men and Deadpool -- to its portfolio.

The acquisition will have a bigger impact on the film and TV production business. As Fox Studios is no longer in business, it means that now they are only five major production houses, Warner Bros, Universal, Sony Pictures, Paramount Pictures and Disney.

As Disney now holds access to all the platforms -- production, distribution and streaming -- it will have greater control in terms on TV and film productions. The network will be in charge of production from creating the programmes to distributing them through television channels, cinemas, streaming services and other ways people watch entertainment. Disney would also get valuable data on customers and their entertainment-viewing habits, which it can then use to sell advertising.

The acquisition has also cast a shadow over the jobs of thousands of workers, with reports predicting that as many as 4,000 positions could be cut. Now, Fox Corporation is a stand-alone company that comprises assets like Fox News, Fox Sports, the Fox Network and Fox TV stations.

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