The Walt Disney Company has agreed to acquire the 20th Century Fox studio, cable TV channel brands FX Networks and National Geographic, a 39% stake in Sky, a 50% stake in Endemol Shine, and a 30% stake in Hulu, paying $52.4 billion in stock.
The rationale for the deal can be summed up in one word: scale. Effectively, the deal merges two of the larger Hollywood major studios. While the deal has been negotiated at breathtaking speed, the Murdoch family appear to have been thinking that even a business as large as 21st Century Fox is optimally positioned to thrive in a fast-developing global media market.
- The Walt Disney Company has agreed to acquire the 20th Century Fox studio, cable TV channel brands FX Networks and National Geographic, a 39% stake in Sky, a 50% stake in Endemol Shine, and a 30% stake in Hulu, paying $52.4 billion in stock
- Assets not included in the deal are FOX broadcasting, Fox News and Fox Business and US sports channels. Immediately before the acquisition, these assets will be spun off into a newly-listed company
- Effectively, the deal merges two of the larger Hollywood major studios to give them more scale to compete for customers
- •We estimate the combined revenues of Disney and Fox (including consumer products) as $54.5 billion in the 12 months ending 30 September 2017. Sky’s revenues in the 12 months to 30 September were £13 billion ($16.5 billion), giving combined annual revenues of $71 billion
- Fox and Disney operate channel portfolios are largely complementary, with the only significant conflicts being sports and very young children
- Disney has historically released fewer films than Fox, but Disney’s slate has been more lucrative as a result of having more high-grossing films
- Ownership by Disney is likely to enable a full takeover of Sky, though Fox management is confident the UK government will approve the takeover by the end of June anyway
List of tables and charts:
- Revenues by segment, 12 months to 30 Sept 2017 ($000s)
- Top 10 channel markets by revenues, 2017
- 21st Century Fox: channel revenues by region - 2017
- Walt Disney: channel revenues by region - 2017
- Channel brands
- Annual revenues from subscription ($000s)
- Annual revenues from advertising ($000s)
Number of Pages: 10
Number of Tables and Charts: 7
Director – Research and Analysis, Programming, IHS Markit
Mr. Tim Westcott is a director of research and analysis for Programming at IHS Markit.
Principal Research Analyst – Cinema, IHS Markit
Mr. Pablo Carrera is a principal research analyst for Cinema Intelligence at IHS Markit.
Director – Research and Analysis, Service Providers & Platforms
Mr. Ted Hall, director of research and analysis at IHS Markit, evaluates new trends impacting the pay-TV business.
Senior Research Analyst, Channels & Programming, TMT
Aled Evans is a Senior Research Analyst for IHS Markit in the TMT Content team.