Disney Agrees to Purchase 21st Century Fox in $52.4 Billion Deal

Disney Agrees to Purchase 21^st Century Fox in $52.4 Billion Deal

            There were heavy rumors as early as a couple of weeks ago that suggested that Disney was seeking to buy key parts of 21^st Century Fox. These rumors excited Marvel Cinematic Universe comic book fans as 21^st Century Fox owned screen rights to Marvel’s X-Men superheroes. Although this news excited comic book fans, the real reason behind the purchase would be to help align Disney Chief Executive Robert Iger’s vision for the company. What is his vision? Digital streaming! With more and more consumers pulling the plug and switching to online TV distributors like Netflix, Hulu, Amazon, and Direct TV Now, Disney announced its intention to have its own streaming service by 2019. Doing so, Disney is segmenting the TV entertainment market, and targeting streaming services.

            By purchasing 21^st Century Fox, Disney is eliminating part of its direct competition in the streaming services market. Let me explain what I mean by this, 21^st Century Fox owns an important part of Hulu, and because Disney completed a deal for Fox, it avoided head-on competition with one of the key players in that market. Also, Disney has planned to pull the plug on all its shows that currently stream on Netflix, as the deal with Netflix is scheduled to end in 2018. I feel it is too early to say if Disney is starting a monopoly here, but it has bought out one of the its major competitors (Hulu), and is going to give a big blow to another of its competitors (Netflix). Time will tell how successful Disney’s streaming service will be but it is building a respectable library by having 21^st Century Fox, Hulu, Marvel Entertainment, Lucas Films Ltd. (Star Wars), and its Disney originals.

By: Gustavo Ocampo

https://www.wsj.com/articles/disney-to-acquire-key-parts-of-21st-century-fox-for-52-4-billion-1513253593