Walt Disney Co on Thursday agreed to buy key film and television assets of 21st Century Fox Inc, in a US$52.4 billion deal that bolsters the media-entertainment powerhouse’s challenge to Netflix Inc and emerging rivals in the streaming wars.
The blockbuster stock transaction also vastly reduces the Fox media empire built by Rupert Murdoch, leaving the 86-year-old tycoon and his two sons with a more tightly focused group, which includes the Fox broadcast network, Fox News Channel and sports channels.
The deal was quickly hailed by US President Donald Trump, who congratulated Murdoch — in stark contrast to his administration’s opposition to a tie-up between AT&T Inc and Time Warner Inc.
It is to see Disney acquire the vaunted Fox Hollywood film and television studios, cable entertainment networks and international TV businesses, bringing popular entertainment properties including X-Men, Avatar, The Simpsons, FX Networks and National Geographic into Disney’s portfolio.
“The acquisition of this stellar collection of businesses from 21st Century Fox reflects increasing consumer demand for a rich diversity of entertainment experiences that are more compelling, accessible and convenient than ever before,” Disney chief executive Robert Iger said in a statement.
Iger, who was previously expected to step down in 2019, is to stay on now through 2021.
Disney’s move to acquire the Fox library of content is seen as a bid to bolster its arsenal against Netflix and Amazon.com Inc, as well as emerging tech players such as Facebook Inc and Apple Inc, which are cashing in on a move toward streaming services and away from traditional pay TV packages.
Disney, which owns the ABC television network, ESPN and has major studios in Hollywood, has been preparing to launch its own streaming service.
Independent media analyst Alan Wolk saw a number of positives for Disney in the deal, which gives it a controlling 60-percent stake in Hulu, the US’ third-largest streaming platform.
By controlling Hulu, Disney gets “a platform with which to take on Netflix and Amazon, particularly internationally” as well as “a whole lot of data about their users, something they have not previously had,” Wolk said. “If Disney includes live sports with Hulu, that could give it a huge edge over Netflix and Amazon.”
The deal would also expand Disney’s global footprint with Fox TV unit Star India — known for sports and entertainment — and Fox’s 39 percent share in European satellite provider Sky PLC.
Analysts have said the deal could face considerable scrutiny by antitrust regulators because of the tie-up between two of the largest film and television groups.
The news comes as another major media deal, between AT&T and Time Warner, has been challenged in an antitrust filing by the US Department of Justice.
Time Warner is the parent company of CNN, which is critical of the Trump administration, while Murdoch’s Fox News is a strong ally.
Matt Stoller of the Open Markets Institute, which follows monopoly issues, said the deal could further concentrate market power.
“This isn’t about competition over better content, it’s just about who will be the last monopoly standing,” Stoller said in a tweet.
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