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Here Are 5 Ways The Disney-Fox Merger Changes The Game

It’s not just about Netflix. Disney’s acquisition of 21st Century Fox assets will reshuffle the power dynamics of the entire entertainment business.

Here Are 5 Ways The Disney-Fox Merger Changes The Game
[Photo Flickr user: Josh Hallett]

After Disney’s $52 billion acquisition of 21st Century Fox—or most of it, anyway—there are so many pieces to unpack, it’s hard to know where to begin. Separately, these were already two of the biggest media and entertainment companies on the planet. Together, they form an octopian beast whose tentacles will touch every corner of the content and distribution universe.

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Here are five ways the merger changes the dynamics of the entertainment and media business:

Hulu gets a real owner

The streaming service Hulu is currently a joint venture between Disney, Fox, Comcast’s NBCUniversal, and Time Warner’s Turner. After the merger is complete, Disney will own a controlling stake in Hulu at a time when the service is just coming into its own with bona fide hits like Handmade’s Tale.

Hulu still lags far behind Netflix in terms of subscribers, but with the right focus and leadership—and supercharged with exclusive Disney and Fox content—it’s poised to position itself as a real alternative. Watch out, Reed Hastings.

ESPN gets a steroid shot

The merger will give Disney control of Fox’s stable of about 20 regional sports networks, which air the games of local teams all around the country. It’s likely Disney will bring these networks under the ESPN banner in some capacity.

If nothing else, these new networks give Disney a greater control of the live-sports market at a time when ESPN is facing an existential crisis driven by cable cord-cutting and other factors. The sports powerhouse’s dwindling subscribers and sagging revenue have been a near-obsession among analysts and Disney investors over the last year.

[Photo: courtesy of Disney Studios]

A path forward, post-Iger

Disney CEO Bob Iger has had his eye on the exit door for years, but finding a worthy successor has proven nearly impossible. COO Tom Staggs was presumed to be the heir apparent, but he left the company last year—after it became apparent he wasn’t the one.

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Earlier this year, Iger extended his contract through 2019 amid rumblings of a possible presidential bid. But if the merger goes through, he’s agreed to stay on through 2021—so maybe put away those Iger 2020 posters.

Meanwhile, Fox CEO James Murdoch is expected to be offered some kind of senior role and—who knows—maybe even the big chair after Iger exits.

Global pay-TV dominance

The deal gives Disney control of significant TV assets in Europe and India. Notably, it includes the massive Star India, which operates 69 TV channels and represents a vital chess piece in a rapidly developing market. Per Reuters, India is Asia’s second-largest cable TV market, with 154 million households as of last year.

Disney will also get Fox’s 39% ownership of the pay-TV distributor Sky, which operates across Europe. In fact, it actually wants 100% of the company, as Fox already has a bid to buy the piece of Sky it doesn’t own. U.K. regulators still need to approve the deal.

Content. Content. Content

A Disney-Fox mashup puts an unbelievably huge number of household-name franchises under the same umbrella. Lest we forget that Disney already owns Star Wars, Marvel, Pixar, the Muppets, and all those beloved Disney characters. Now, it gets Avatar, X-Men, Fantastic Four, and Deadpool and countless others with 20th Century Fox.

But wait—there’s more! Don’t forget about FX Studios, FX Productions, Fox21, and National Geographic Partners, not to mention 20th Century Fox Television, which owns The Simpsons, This Is Us, and tons of other shows.

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Folks, the crossover-episode possibilities are endless.

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About the author

Christopher Zara is a news editor for Fast Company and obsessed with media, technology, business, culture, and theater. Before coming to FastCo News, he was a deputy editor at International Business Times, a theater critic for Newsweek, and managing editor of Show Business magazine.

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