The Fox Deal is still a risk for The Walt Disney Company
With the U.S Justice Department providing anti-trust approval for the Disney-Fox deal. New analysis has emerged stating that Disney could possibly control 40% of the domestic box office. A astronomical feat that would forever alter the landscape of Hollywood. Disney’s purchase would be for $71 billion, a large sum to pay for the assets of 21st Century Fox. Disney has already been a force to be reckon with at the box office. The company owns treasured brands like Lucasfilm, Marvel, and Pixar. The commanding 40% will also give Disney new blockbuster toys that include Avatar, Deadpool, and the X-Men. Although the latter will be included in the already successful Marvel Cinematic Universe. The Fox deal gives Disney room to mix and match properties.
There is a downside though. Disney is lumped with some far inferior intellectual property. Some of it doesn’t even live up to the historic standards that the company prides itself on. Also this isn’t a merger, this is Disney absorbing Fox. Disney doesn’t need the help in modern Hollywood. Fox does, and that is the exactly the reason why Rupert Murdoch got out of the business. Fox could no longer strategically compete against companies like Disney. Currently Disney holds the top three spots at the box office for 2018. Avengers: Infinity War, Black Panther, and Incredibles 2 all performed well at the box office.
Although Disney will be lumped with some inferior properties. They won’t go to waste when Disney establishes its streaming service, and quote and quote “Netflix killer.” FX, National Geographic, Ice Age and other Blue Sky Studio properties will be incorporated into the service.
The Fox deal will be Disney’s priciest transaction to date. Disney bought Pixar for $7.4 billion, then Marvel Entertainment and Lucasfilm for $4 billion each. Disney will be dishing out $71 billion. Is Fox really worth $71 billion? Was this Comcast’s strategy all along to get Disney to pay this asinine price tag that would damage their ultimate run of success. Yeah, Disney will be getting Sky News, a bigger stake in Hulu, and multiple television and film studios on top of cable channels but that doesn’t necessarily mean this is the smart thing to do. Disney is going to take on Fox’s debt.
So if Disney and Fox are controlling 40% of the box office. Who will be fighting for the other 60%? Universal Pictures, Paramount Pictures, Sony Pictures, and Warner Bros. will all be facing off to try to get double digit earnings. Could a real Hollywood merger be on the way? Not like Disney-Fox because that’s just showing Disney’s strength.
Disney is just building up potential for their over-the-top streaming service. Finding ways to compete with giants like Netflix and Amazon will be the continuous challenge for Disney. The deal will have a impact on the creative side too. How will the MCU respond to all these new characters? Will Disney be able to tap all the potential out of Avatar? Is Fox Searchlight going to continue giving us critical hits? Many of these questions will be answered in 2019. For now, we will have to wait and see what Disney shareholders think of this historic deal.
Once again Mickey Mouse slayed the Fox. Especially now with Comcast officially dropping out of the bidding.
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