The company that most of us associate with family friendly entertainment and a happy-go-lucky mouse has just made one of the most significant acquisitions in the history of the industry a few months after deciding to create its own streaming service. **Disney just announced that it will be taking control of a majority of 21st Century Fox. **
The two media giants that rivaled one another for the top spot in the world of entertainment will soon combine in a megamerger that’s unlike anything the world has ever seen. Fox succumbed to Disney’s $52.4 billion offer after suffering steady losses at the hands of new non-traditional entertainment packages.
The decision must be approved by shareholders, but executives don’t anticipate any real resistance. The real test will come when the merger is reviewed by the US and UK regulatory authorities. If everything goes as planned, Disney will be in control of roughly 40% of the US box office.
Rupert Murdoch, the patriarch of the Fox dynasty, has agreed to let go of the 20th Century Fox film studio as well as a bevy of popular cable channels. In return, he will secure the future of his family by retaining a 5% share of the ‘new’ Disney. His decision comes on the heels of Murdoch’s failed $80 billion acquisition of Time Warner.
For the first time in five decades, members of the Murdoch family may be going their separate ways. James Murdoch, Rupert’s son and Fox Chief Executive, will need to choose a new direction. He’s expected to slide into an executive position at Disney—but many speculate that he’ll strike out on his own.
News like this reflects the changing face of entertainment, as companies like Netflix, Amazon, and Google draw viewers away from traditional pay cable. Steven Zeitchik of the Washington Post described the reasoning behind the merger, saying—
“The deal makes Disney a behemoth of the type entertainment has never seen before and sets the stage for a battle with Silicon Valley titans like Netflix, Apple and Google. The conglomerate is building up scale in the hope of fending off those firms’ forays into the content market; it is also stockpiling content for a new streaming service that it hopes will stem a tide of cord-cutting that has afflicted properties like ESPN.”
Disney has taken a “safety in numbers” approach to the changing landscape of an industry that’s quickly becoming foreign to traditional network models. The real challenge will be in their ability to manage such a huge entity without sacrificing quality and content.
Disclaimer: This article may have had additional images, links or data that was added by this site's editor.
We are happy to be a featured partner of the Cord Cutting Daily news network.