Disney + Fox: $ 52.4 billion deal to compete with Netflix and Amazon

by bold-lichterman

Disney will buy out the Murdoch family-owned media and entertainment group 21st Century Fox, its main assets.

This transaction amounts to $ 52.4 billion in shares, and $ 66.1 billion, if we include 21st Century Fox’s debt.

Majority control of the Hulu streaming platform

Disney gets its hands on Fox TV and cinema studios, FX channels and National Geographic, the Indian TV channel Star, but also on 39% of the European television group Sky, and through this, on the share held by Sky in the streaming platform Hulu, competitor of Netflix. Disney, which already owns 30% of Hulu, thus takes majority control.

The Walt Disney Company intends to strengthen its content and entertainment to better face competition from the Internet and players like Netflix, Amazon and Apple. Many American households are in fact abandoning costly cable and satellite packages to turn to online platforms, in a phenomenon called cord-cutting.

40% of the American box office

In an industry disrupted by technology and new uses, content is one of the main sinews of war. Buying back these assets also allows Disney to build up an impressive catalog of content and franchises (Star Wars, X-Men, Avatar, Alien, Planet of the Apes, Ice Age, Die Hard…). According to Bloomberg, the two companies concentrated 40% of the 2016 box office in North America (by volume of tickets sold). Such a portfolio of content would easily allow Disney to launch its own subscription streaming service, as it wants to do for 2019 and / or dry up the competition.

Disney Fox 524 billion deal to compete with
2016 American box office market share (in%) –
Source: Bloomberg Mojo

The consolidation movement is on an unprecedented scale, and the first since the acquisition of NBCUniversal by Comcast in 2011. Due to its dimensions, it is able to upset the balances and power relations between the players in the data chain. value, in Silicon Valley as well as in Hollywood.

The sale is subject to the approval of the regulatory authorities.