Disney closed its $71bn (£54bn) acquisition of Rupert Murdoch’s 21st Century Fox film and entertainment assets this week, bringing The Simpsons, Star Wars and The Avengers under one roof. The deal combines Disney’s film studios, ABC broadcasting network and theme parks with Fox’s film and TV studios, and the FX and National Geographic broadcast networks.
It confirms Disney’s position at the top of the Hollywood hierarchy but also represents a fightback against the tech industry and the upheaval caused by its forays into the entertainment business through Netflix and Amazon in particular. Here are six changes to expect from the Disney/Fox deal.
Disney’s iron grip on Hollywood will be extended
Disney’s deal will see it take control of the 104-year old 20th Century Fox, the biggest change in the Hollywood landscape since MGM’s demise in the 1980s. Disney has a remarkable array of film production talent which includes three powerhouses: Toy Story-maker Pixar; Lucasfilm, the home of Star Wars; and the all-conquering Marvel, which made Iron Man, Black Panther and the Avengers series. Fox’s film division, fresh off an Oscar haul through the Freddie Mercury biopic Bohemian Rhapsody, will add three valuable franchises: the X-Men universe; Avatar; Deadpool and the Kingsman series. As a result, the so-called “big six” of Hollywood studios is down to five, and the already dominant Disney will extend its box-office power. Disney took a market-leading 26% share of the $12bn US box office last year, while also dominating globally. Overnight this has jumped to 36% after the Fox takeover. By comparison, its next closest competitor, Warner Brothers, had a 16% share last year.
Expect fewer X-Men as the Marvel team comes together
When Disney’s deal to buy Fox was first announced Marvel fans rejoiced at the prospect of (most of) the Marvel universe being brought back together for the first time in almost three decades. Chunks of rights to franchises, including the X-Men and Fantastic Four, had been sold off to different studios when Marvel hit hard times in the 1990s. The Disney deal has brought them back into the Marvel studios fold but now the on-screen future of the Fox-owned properties is far from clear. The Ryan Reynolds’ vehicle Deadpool is expected to be the only straightforward switch from the X-Men world to Disney, according to Disney’s chief Bob Iger. Disney has inherited two upcoming X-Men films from Fox: Dark Phoenix, which will launch on 7 June, and The New Mutants, which is scheduled for a 2 August release. After the departure of Hugh Jackman as Wolverine in Logan, there could be a hiatus in X-Men fare until 2021 or later.
And perhaps a change in Disney’s Marvel frontline
When Marvel sold off the rights to some of its assets in the 1990s it hived off its then-biggest names, which at the time included franchises such as X-Men and Spidermen. Much of what Marvel retained was considered, then, to be B-list superheroes, like Iron Man and Captain America. In the hands of Disney, which made the surprise purchase of Marvel for $4bn in 2009, they became box-office gold. But with Chris Evans retiring as Captain America, and with Robert Downey Jr looking increasingly old as Iron Man, there will have to be a new guard. The success of the new Captain Marvel film starring Brie Larson has already flagged one successor, while the pipeline includes a standalone Black Widow venture and a film based on the Kung-Fu master Shang-Chi. And for all the uncertainty over X-Men, the new guard on that team could supply some names too.
Hollywood’s workforce will shrink
Disney promised investors that synergies from the $71bn deal would result in $2bn in cost savings. That means job cuts. Disney is taking on 15,400 Fox employees globally as part of the deal, and has promised to hit its savings target over two years with the US in line first, and that means Hollywood will be at the centre of the changes. Reports have put the cuts at between 4,000 and 10,000, with Fox staff braced to bear the brunt of the losses.
A new global streaming service to rival Netflix
Disney’s move for Fox was driven by the need to bulk up in the contest with the streaming giants, embodied by Netflix, threatening traditional media players. Rupert Murdoch put 21st Century Fox’s entertainment assets up for sale after acknowledging that he didn’t have the global scale to compete, having previously failed to take over Time Warner to achieve that goal. Disney’s $71bn has brought a wealth of content and the ability to challenge Netflix’s global heft with a streaming service of its own. From X-Men and Avatar to the Oscar-winning Fox Searchlight unit – behind films including The Shape of Water, Three Billboards Outside Ebbing Missouri and The Favourite – and TV shows spanning The Simpsons, This Is Us and classics including M*A*S*H and 24. Throw in Disney fare from Marvel, Star Wars and Pixar and the company hopes the service, which will launch later this year and be “cheaper than Netflix”, will future-proof its business in a viewing age increasingly dominated by streaming services.
And more Fox News
Rupert Murdoch may have sold off his global entertainment assets but he remains a media force keeping control of the rightwing Fox News and the Fox Sports broadcasting business. He also continues to control News Corp, home of his global publishing assets including the Times and the Sun. “Are we retreating? Absolutely not,” said Rupert Murdoch in a conference call announcing the sale to Disney in December 2017. “I am a news man with a competitive spirit. Fox News is probably the strongest brand in all of television. We are pivoting at a pivotal moment.” Last week, a day before the completion of the Disney/Fox deal, Murdoch’s new entity, Fox Corp, began trading on the US stock market. The octogenarian shows no sign of backing out of the spotlight just yet.