Disney's Majority Purchase of 21st Century Fox Increases Company's Entertainment Stranglehold

Nick Kangadis | December 14, 2017

ABC, ESPN, Marvel Entertainment, Lucasfilm and 21st Century Fox. What do all of these giant entities have in common? They are now all owned by The Walt Disney Company.

Yes, 21st Century Fox too. Well, the majority of it anyway.

Early Thursday morning, Disney acquired Rupert Murdoch’s 21st Century Fox for $52.4 billion, with Disney also assuming Fox’s $13.7 billion in debt. That brings the deal for Disney to a total cost of $66.1 billion.

That’s a lot of Disney dollars!

While Fox News Channel, Fox Business Network, Fox Sports 1 (FS1) and Fox Sports 2 (FS2) will remain in the Murdoch’s family’s possession, Disney will assume responsibilities for 22 Fox regional sports networks, among other properties.

According to ABC News:

Disney also will acquire 21st Century Fox's film production businesses, plus its television production units. It also includes FX Networks, National Geographic Partners, Fox Networks Group International, Star India and Fox's interested in Hulu, Sky plc, Tata Sky and Endemol Shine Group.

As part of the deal, 21st Century Fox retained the Fox television network and stations, Fox News Channel, Fox Business Channel, FS1, FS2 and the Big Ten Network. They will be part of a newly listed company after the close of the deal.

The purchase of the majority of Fox assets brings Disney’s acquisition total to 17 over the last ten calendar years. Two of the more notable acquisitions by Disney include Lucasfilm — which presides over the “Star Wars” franchise — and Marvel Entertainment.

The moves by Disney is the company’s effort to stem the rising tide of internet-based companies such as Facebook, Google, Apple, Amazon and Netflix. With more and more people “cutting the cord” and moving away from cable television, building up assets is key to survival in an ever evolving digital age.

One aspect of the sale that is particularly interesting is Disney’s acquisition of Fox’s interest in digital streaming service Hulu. Disney had been in talks to begin its own streaming service.

According to Fortune:

With its acquisition of 21st Century Fox, Disney will bump its ownership stake in Hulu to 60%. And while Disney certainly wins if it collects revenues from both companies, it’s much more cost effective to have a single one. The real trick, though, will be convincing Comcast, which owns a 30% stake in Hulu.

Using Hulu as the home for all things Disney (DIS, +0.59%) would give the company a huge head start, rather than building an audience from scratch. The service stopped giving subscriber numbers last year, but is estimated to have between 12 million and 16 million paid users.

As Fortune later notes, this could be a huge boon to Disney’s streaming service efforts as a platform with exclusive Disney content “could draw people away from established services, including Netflix and Amazon.”

When it comes to the global entertainment business, Disney looks like it might just be dominating the world.