Disney scales up with $52 billion Fox acquisition

December 15, 2017  | Subscribers Only

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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. 

Highlights:

  • 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
 

Tim Westcott

Director – Research and Analysis, Programming, IHS Markit

Mr. Tim Westcott is a director of research and analysis for Programming at IHS Markit.

Pablo Carrera

Principal Research Analyst – Cinema, IHS Markit

Mr. Pablo Carrera is a principal research analyst for Cinema Intelligence at IHS Markit.

Ted Hall

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.

Aled Evans

Senior Research Analyst, Channels & Programming, TMT

Aled Evans is a Senior Research Analyst for IHS Markit in the TMT Content team.

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