Over the last few months, I have written several articles that address the massive influence that Netflix has had on the film and television industry in Hollywood. The streaming capacity and model being used by Netflix completely changed how media companies compete — forever changing the landscape of media. In response to the aggressive move by Netflix, The Walt Disney Company is making a major move of its own, purchasing the majority of the assets of 21st Century Fox, including its multiple networks, in television library and it coveted film library. This acquisition will impact the streaming landscape is a dramatic fashion, as The Disney company will be aggressively expanding its streaming capacity.
Below, you will find some significant facts about the deal.
1. The Deal Is Valued at $66.1 Billion
The aggregate value of the Disney-Fox deal is said to be worth $66.1 billion. Disney is reportedly purchasing $52.4 billion in stock to acquire Fox’s assets and the company will be assuming $13.7 of Fox’s debt. According to representatives at Disney, the deal is said to produce a savings of $2 billion. This will deal will see Disney issuing approximately 515 million new shares to Fox stakeholders — giving these stakeholders approximately a 25 percent stake in The Disney Company.
2. Rupert Murdoch to Maintain Control of Fox Studios
While Disney will be requiring much of the current assets owned by Fox, Rupert Murdoch will be allowed to maintain control of the Fox studio that sits on a 53-acre lot on Pico Boulevard. Murdoch will also maintain control of Fox News through a spinoff company that has not yet been named. What Murdoch is giving up is significant, however. The Disney company will own the entire Fox library, including film and television, which Disney will use to expand its streaming capacity.
3. The Deal Dramatically Expands Disney’s Streaming Capacity
One of the challenges that Disney, Fox, and other Hollywood movies companies were facing is that Netflix massive content and streaming capacity was interfering their revenue generation because Netflix viewers were getting almost immediate access to recently released movies — all but destroying the DVD revenue model and creating a diminishing return at the box office. The increase in content that The Disney company will acquire in this deal will allow them to compete with Netflix — at least theoretically.
4. The Fox Broadcasting Networks Will Be Spared
One of the few elements of Fox that will remain untouched is its Broadcasting networks, which include Fox Business Network, Fox News Channel and its key national sports networks that include FS1, FS2, and Beg Ten Network. Before the deal is finalized, Fox will form a spinoff company that will allow them to hold these networks separate from its other assets. The majority of the productions for these networks will run through the Los Angeles studios located on Pico Blvd, and the remaining holdings will likely eventually merge with News Corp.
5. Expect Some Shakeups on the Executive Levels
While Bob Iger is expected to remain as a part of the deal, you can count on the fact that there will be some major executive shakeups as the pendulum of power starts to swing in the direction of The Disney Company. Bob Iger currently sits as the chairman and CEO of The Disney Company, and he is likely to remain in his position through 2021; however, many of the executive positions are up in the air. In the 12 to 18 months that it is expected to take to get the approval for the merger, a lot of decision will have to be made concerning top-level executive positions.