Walt Disney on Thursday announced plans to acquire many parts of Twenty-First Century Fox in a deal worth $52.4 billion in stock. The company will get network Nat Geo, Asian pay-TV operator Star TV, Fox’s movie studios, stakes in Sky and Hulu, and regional sports networks. Disney’s Fox acquisition bolsters its plans to become a dominant streaming service platform, making it a bigger threat to Netflix.
Bob Iger will remain Disney’s chairman and CEO through the end of 2021, at the request of the board of directors of both companies. Disney emphasized the importance of Iger to integrate the acquisition, saying in a statement that “extending his tenure is in the best interests of our company and our shareholders.”
In August, Disney announced it will start standalone streaming services and pull its movies off of Netflix starting in 2019. No price point has been set for its upcoming movie and TV plan, but the company said it will be “substantially below” Netflix’s price. Disney also will create a standalone ESPN digital service with access to 10,000 additional live sporting events.
Disney has said its content service will have a smaller library than Netflix. Still, it has some fan-favorite titles including its animated features, Marvel movies, and Star Wars films. Adding Fox’s repertoire of content — which includes the X-Men, Alien and Predator franchises in addition to shows like “The Simpsons,” “Family Guy” and “The X-Files” — will only make it stronger.
“Both companies are so deep in terms of what they have,” Verna said. “The decision to subscribe to a streaming service often comes down to does the content match what I, as a consumer, am interested in.” The deal puts Netflix in a more precarious situation, as some of this content it had previously licensed may now leave the service. Netflix will also have to spend more to remain competitive. However, Netflix has already acknowledged it can’t rely on other media companies’ shows and movies and is focusing on its own content. The company has projected it will spend $8 billion next year.