So much buzz has surrounded Disney’s buy-up of 21st Century Fox, which finally was made official on December 14, that it can be hard to see the forest for the trees. Will Wolverine finally show up in an Avengers movie? Will the Human Torch start kicking it with Captain America? Will Deadpool have to start swearing less ... or share a romantic plate of spaghetti and meatballs with Mickey Mouse?
Those are just the fun questions — and now that the deal is done, we’re starting to get some firm answers. But in a world where we’re already exposed to more Disney- and Fox-owned content on a daily basis than we probably even realize, it’s a good idea to take a step back and regard some of the moving parts in a more omniscient, big-picture kind of way.
That’s where we come in. Here, without further unnecessary fanfare, is our explainer of who the players are in this mega-deal, how we even got to this point, and how some of our favorite creators feel about their whole new world.
Who’s playing this game?
Disney, whom you know. Disney bought up most of 21st Century Fox in a $52.4 billion all-stock transaction valued at $66.1 billion, with Fox’s debt load factored in. The deal spiked share prices for both companies in same-day trading after the big announcement, with Disney shares up 2.62% to $110.46 and 21st Century Fox shares up 4.31% to $34.15.
We won’t say too much more here about Disney, since Disney is a pretty well-known quantity. Suffice it to say that The Last Jedi is Disney’s next big release, so quit watching SportsCenter on ESPN (a Disney property), pick up your Little Mermaid phone, and order your tickets … if you haven’t already.
On the Fox side, things can get pretty confusing pretty fast, unless you’re a trade paper addict or stock market analyst.
The company Disney (mostly) is absorbing is 21st Century Fox, the Rupert Murdoch-founded empire first begun under the name of News Corp. In any sentence that doesn't also contain the word Disney, a mention of 21st Century Fox amounts to a pretty monolithic name drop. It's a massive, massive media conglomerate.
21st Century Fox, you say? Isn’t there a 20th Century Fox? In fact, isn’t 20th Century Fox what I see before the opening credits roll at the theater? What century are we living in, anyway?
Right you are, and sharp-eyed, too. 20th Century Fox is the chief — but not the only — moviemaking division under the 21st Century Fox corporate umbrella. It’s a giant part of what makes this deal so appealing for Disney. It’s (mostly) where the X-Men live; it’s where Deadpool hangs out with Planet of the Apes and Avatar.
But wait! Haven’t I seen the Fox name on other movie stuff? Isn’t there a Fox Searchlight Pictures or something?
So sharp. Clever like a … fox … you are. Yes, Fox Searchlight is a part of all this.
Let’s back up and talk umbrellas again for a second.
There’s one massive umbrella that covers everything, and that umbrella is 21st Century Fox. Under that umbrella are dozens of still-pretty-huge umbrellas, umbrellas that, in turn, cover even more umbrellas. The Fox Entertainment Group is in that second tier of pretty-huge umbrellas, and it covers 20th Century Fox — which in turn covers subsidiaries like Fox Searchlight and 20th Century Fox Animation.
The Fox Entertainment Group umbrella also covers cable TV brands like FX, National Geographic, and the Fox News Channel, as well as the FS1 family of sports channels, and a whole slew of genre- or region-specific TV cable networks and production studios.
Disney is buying most of those properties as they’re presently structured — with a handful of exceptions noteworthy both for their relative value outside Disney’s strategic wheelhouse, as well as for their decidedly Fox-centric brand status.
Since it’s easier to talk about what Disney isn’t buying, let’s do that.
Left out of the deal are the Fox News Channel and its news siblings, the FS1 sports channels and the Fox broadcast network, as well as 20th Century Fox’s Southern California studio lot. The exclusion of Fox News Channel in particular has elicited its share of snap inferences about how Disney’s brand image will — or, more likely, won’t — be greatly altered by selectively editing its Fox acquisitions portfolio.
Phew … are you sick of umbrellas yet, Mary Poppins?
Big and Bigger: What’s at stake
As you can see from all that umbrella talk, 21st Century Fox is big. As one of the “big six” film companies that dominate the Hollywood studio system, it’s a peer to Disney’s Walt Disney Studios — which itself represents but a slice of Disney’s larger entertainment empire.
But if Fox is big, Disney’s movies arm is positively enormous. Films produced under the Walt Disney Studios banner represented more than one-fourth of all movies seen at U.S. theaters last year. Forbes reports that Fox films took 13 percent of that same box office — itself an enviable piece of market share.
It’s not inconceivable that, consolidated, these two merged entities may occupy a market share of the U.S. domestic box office that hovers somewhere between one-third and one-half. That’s big, potentially bigger than the one-third share of Hollywood presence the two companies occupy alongside Paramount Pictures, Warner Bros. Pictures, Universal Pictures, and Sony Pictures Entertainment — the other four players in the “big six.”
It’s important to note that all this speculative talk relies solely on what we know about the way things are now. Now that Disney and Fox have become one, the ripple effects and post-deal strategic decisions that follow may lead to anything: good movies, bad movies, a completely new take on streaming TV, character crossovers nobody’s even thought of yet … heck, maybe even a new Wolverine ride in a new Marvel theme park at Walt Disney World.
Why is this happening?
Look, we’re not in the room when deals like this are being whispered, but we’ll throw one big, bad word out there: Netflix.
Disney — like so many other media companies — already has been pregaming its insurgency into the TV streaming marketplace currently dominated by Netflix.
Unlike so many other media companies, though, Disney isn’t cobbling together a strategy from table scraps. When it announced it would launch its streaming service with a years-long cycle of all-new Star Wars television content, in-house animation, and Marvel shows — all at a price that undercuts Netflix — Disney was firing the opening salvo in what already is shaping up to be a market war between two giants.
With Disney’s acquisition of Fox, expect that war to be a battle for the ages — one that hopefully ends up benefiting us, the fans. Netflix is already churning out Marvel programming at an impressive rate, but now that Disney effectively owns Fox’s slice of the Marvel universe, it will, in one fell swoop, be able to offer added value to its own streaming service while deflating some of Netflix’s current exclusivity as a streaming boutique for all things Marvel.
Netflix just might be the big reason for Disney’s big play — but it’s by no means the only one. As much as the Marvel angle may factor into Disney’s streaming TV strategy, it’s also big in its own right. Fox's X-Men universe has produced a line of films that’ve grossed nearly $5 billion at the global box office, and its showrunners are already fantasizing about how they could mix and match Fox-controlled Marvel characters like Professor X, Magneto, Jean Grey, Wolverine, and Storm into the rest of the Marvel Cinematic Universe.
Now that there's a deal, that's not just idle daydreaming. Among Fox’s Marvel brands that Disney, until now, could only gaze upon as look-but-don’t-touch holdouts from the MCU are The Fantastic Four, The X-Men, and Deadpool — as well as a heavy handful of individual heroes from the X-Men cycle, like The Wolverine/Logan and The New Mutants, who’ve spun their way into standalone film franchise status.
In addition to all that, Disney’s getting James Cameron’s planned four-film Avatar cycle. It’s getting Planet of the Apes. It’s getting a cavalcade of potentially evergreen film properties from Fox’s extensive trophy case, including Home Alone, Ice Age and Independence Day.
On the TV side, Disney’s getting a ton of value. Aside from picking up an assured future market presence with its acquisition of cable mainstays like FX and the National Geographic channel, it’s also getting bankable television franchises like American Horror Story, Fargo, Archer, and It’s Always Sunny in Philadelphia — to name a very few.
Oh — and just because this is so big it deserves its own paragraph: Disney now owns the friggin’ Simpsons.
One other thing, while we’re talking TV: As part of this deal, Fox Entertainment Group’s 30 percent ownership share of Hulu has just gone over to Disney. Disney-ABC Television already holds its own 30 percent share of Hulu. That makes Disney a majority owner of an existing streaming service that — barring some significant changes in market strategy — will compete directly against the forthcoming streaming TV service that Disney already had in the works well before the Fox deal ever went down.
In an earnings call the day of the deal, Disney CEO Bob Iger said Disney’s majority ownership of Hulu “will allow us to greatly accelerate Hulu into [the TV streaming] space and become an even greater competitor to those already out there.” But he hedged when discussing whether Disney will ramp up spending on content over at Hulu — an equivocation he had no trouble avoiding only weeks earlier, when Disney had announced its in-house streaming TV plans.
Why so serious?
Inside the creative world where movies and television get made, opinions appear to diverge pretty widely on whether a Disney-Fox merger will be good for the finished product. A lot of that has to do with positioning: People invested in properties with a decidedly non-Disney image already are wondering aloud how a merger would affect their work.
Knee-jerk responses have ranged from the positive to the negative to the amicably offbeat. Many of the creatives formerly under the 21st Century Fox umbrella, as well as industry observers with potential skin in this newly-realigned game, were quick to throw their thoughts to social media:
But nothing embodies the potential culture clash between Disney and Fox more perfectly than Deadpool, the R-rated smart aleck at the center of so much pre-deal speculation. Ryan Reynolds had already whetted our appetites for what he might say once the suits had shaken hands, telling his Twitter followers days ahead of time he was… excited.
Then the deal happened, and we got this — and you have to wonder how far in advance Reynolds had it all prepped, spit-shined, and ready to go:
For what it’s worth, Disney indicated almost immediately it’ll remain open to preserving the R-rated edginess that Deadpool fans have come to adore and expect. And sexual tension or not — if Deadpool and Mickey Mouse ever do share equal billing in the same feature...we are so there.