The Walt Disney Co. acquisition of a large chunk of 21st Century Fox is expected to reshape the filmmaking landscape, uniting two of the “big six” Hollywood studios under one umbrella for the first time.
Disney agreed on Thursday to buy key film and television assets from Fox in a $52.4 billion deal set to step up its challenge to Netflix and emerging rivals in the streaming wars. “It’s certainly a historic merger but this is not the first time two studios have come together—20th Century Fox is itself the result of a merger,” filmmaker Jean-Luc de Fanti, who co-produced Good Time and American Made this year, told AFP.
Disney will take over billionaire Rupert Murdoch’s prestigious movie distribution businesses, which racked up 27 Golden Globes nominations on Monday, comfortably more than its big six rivals combined.
One important question for film buffs is whether Disney, which offloaded indie subsidiary Miramax in 2010, has the stomach to keep much-admired arthouse label Fox Searchlight going after the acquisition. The distributor has turned heads this awards season with a production line of critical darlings like Three Billboards Outside Ebbing, Missouri, The Shape of Water and Battle of the Sexes.
But it doesn’t have the box office clout of its blockbuster stable mate 20th Century Fox, which made $826 million in 2017 from three movies alone—Logan, The Boss Baby and War for the Planet of the Apes.
On the small screen, the deal would offer Disney the chance to double its stake in streaming service Hulu to a controlling 60 percent, allowing it to fold the up-and-coming platform into its own streaming services being launched in 2019.
It could also add content from Fox’s FX—which produced hit series The Americans—and National Geographic cable channels, and movies such as The Revenant and the Avatar franchise, to give it a running start in its bid to challenge Netflix.
In the only aspect of the deal the fanboys will really care about, the marriage provides the opportunity for a meeting of minds between the costumed superheroes of Disney-owned Marvel and the mutants of Fox’s comic book division. That could pave the way for a new “Avengers vs X-Men”-style franchise featuring Thor battling Deadpool for galactic supremacy, or perhaps Captain America bickering with the Fantastic Four.
Meanwhile Star Wars fans should be able to buy a box set of all nine movies for the first time, since the rights for the original films and prequel trilogy—made before Disney’s $4 billion acquisition of Lucasfilm in 2012—have always belonged to Fox.
The deal adds the 50 acres of production and pre-production facilities at the Fox studios in west Los Angeles to Disney’s own expansive lot in Burbank, although the company is planning to lease the studio back to Fox for the coming years, according to Variety magazine.
Redundancies are expected, although Variety reported that 21st Century Fox president Peter Rice reassured employees at a meeting on Thursday that staff laid off would get “big severance packages.”
Regulatory approval may not come until as late as 2019—a relief to some analysts who see the proposals as an alarm bell over the health of the film industry. “Even Fox, with all its resources… is looking at the increasingly expensive future of moviemaking and considering taking itself out of the picture,” said David Sims of The Atlantic in a commentary before the deal was signed.
If Fox can’t hack it anymore, Sims argues, it is difficult to see how Universal, Sony and Paramount are going to manage, given that they already rely heavily on other revenue streams such as television.
The Writers Guild of America West Writers Union said the antitrust concerns raised by the deal were “obvious and significant” while Jeremy Slater, creator of Fox’s The Exorcist on Fox, tweeted that the deal was “awful for several reasons.”
Richard Greenfield, a media and tech analyst for San Francisco-based financial services firm BTIG, told AFP the move may not be music to the ears of movie theater operators either. Disney is already able to leverage its influence to drive tough revenue-sharing deals with theaters, as demonstrated most recently in its demand for a bigger-than-normal 65 percent of ticket sales for Star Wars: The Last Jedi.
Disney reported profits of $2.5 billion in 2016, when it distributed the top three movies—and five of the top 10—and adding Fox’s contribution will only give it more clout. “We would expect Disney’s increased scale to be a meaningful negative to exhibition chains around the world,” said Greenfield.