Disney is buying a significant portion of 21st Century Fox in a deal that will change the entertainment industry and help Disney compete against Netflix.
The $52.4 billion all-stock deal will combine two of the most significant media companies in Hollywood. In addition to 21st Century Fox’s movie studio and regional sports networks, Disney is buying cable channels FX and National Geographic. Disney will also get Fox’s ownership in Hulu and European premium network Sky.
Before the deal, Rupert Murdoch’s 21st Century Fox will separate the Fox broadcasting network, Fox News Channel, Fox Business Network, and some national sports networks into a new company that will be spun off to its shareholders.
The sale to Disney is a significant investment for the company, who is spending billions to build a dominant media empire.
Disney is investing in more entertainment assets to compete with streaming services that have cut the traditional cable subscription model.
ESPN, which is owned by Disney, has suffered as consumers are spending more time watching Netflix and cutting their cable packages.
Bob Iger, who had been expected to retire, will remain as chairman and CEO of Disney through 2021.
“We’re honored and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building,” Mr. Iger said in a statement.
Mr. Murdoch added, “I firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace in what is an exciting and dynamic industry.”
Disney hopes 21st Century will boost their plans to introduce two Netflix-style streaming services. The company’s first significant streaming effort, ESPN Plus, arrives in Spring. A second and currently unnamed platform, built around the company’s Disney, Marvel, Lucasfilm and Pixar brands, will be released next year. Rounding out its streaming portfolio will be Hulu, the already established service that focuses on older viewers with programming that includes ABC shows.
“We’re going to launch big, and we’re going to launch hot,” Mr. Iger said in September when announcing Disney’s streaming strategy.
Disney’s purchase of Fox television studio includes 36 series currently in production including, The Simpsons, Homeland, This Is Us, Modern Family, and Family Guy.
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