Published on December 14th, 2017 | by Brad Gibson0
Done deal: Disney buys Fox assets & what is means to TV watchers
Disney will take over the National Geographic network, the FX network, the 22 regional Fox sports networks, the Star satellite service in India, as well as Fox’s movie and TV studios. It has also acquired majority stakes in both the Sky satellite service in the U.K. and will now become the majority owner of the streaming service Hulu.
21st Century Fox will spinoff Fox Broadcasting Co., Fox Sports, Fox News, Fox Television Stations and a handful of other assets – including its national sports channels – creating a “new Fox”, the company said in a press release Thursday.
The deal is being hailed by some media as a merger or “union” of the two companies, which is far from the truth. The agreement is an outright sale. The split assets include no agreement of longterm joint ownership of any property after the sale is approved by the U.S. federal government, which could take as long as 18 months.
“The acquisition of this stellar collection of businesses from 21st Century Fox reflects the increasing consumer demand for a rich diversity of entertainment experiences that are more compelling, accessible and convenient than ever before,” said Disney chairman and CEO Bob Iger in a press release.
“We are extremely proud of all that we have built at 21st Century Fox, and 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,” said 21st Century Fox chairman Rupert Murdoch.
What it means for you
What this deal is really about is creating a ton of content. There are so many parts of the business Disney is buying that it could be years before we know how all that content will be used and packaged for consumer viewing.
Countless hours of Fox programming could end up on various other networks owned by Fox, including the recently announced Disney streaming service. The unnamed service is expected to go live sometime in the Fall of 2019.
The sale gives Disney majority control of Hulu, as Disney already owns a 30 percent stake in the streaming provider, available on Apple TV. Comcast and Time Warner own the remaining interest in the service and industry experts believe that could create a future confrontation as Disney prepares to launch its own streaming service that will compete with cable systems owned by those two companies. The outcome could have long-term implications for consumers in terms of content and pricing.
Out of all the acquisitions, Hulu could be Disney’s biggest opportunity to sell content directly to consumers and go up against its biggest competitor…Netflix. Iger’s comments to reporters following the deal gave clear indications of just how big the Hulu purchase could be for Disney.
Iger said the acquisition “will enable us to greatly accelerate Hulu…and become a more viable competitor to those already out there.”
While the entertainment giant already has plans to launch a family-friendly streaming service in 2019, Iger sees Hulu as “a more adult-oriented offering,” likely using content produced by the Twentieth Century Fox movie and TV studio and the FX cable network, as well as other sources, he said.
With Disney taking over 22 regional sports networks and already owning the sports networks of ESPN, will the deal mean more choice for consumers or higher prices? Disney already plans on creating a soon-to-launch streaming service to be called ESPN Plus. While the addition of the regional sports networks would be an added benefit for customers, industry experts have concerns the price of the service could grow considerably at a time when many consumers are cord cutting due to the increased pricing of sports programming.
The availability of Fox content across the growing resources of Disney could prove a benefit for consumers, but much is yet to be determined on how it will be used and what it will cost.