The Walt Disney Company has recently been in talks with Rupert Murdoch’s media company, 21st Century Fox, to buy sizable company amounts. This will entail Disney owning 21st Century Fox’s movie and television studios and a handful of TV stations. However, the talks have reportedly been stalled, according to CNBC.
Fox shares jumped 10 percent following the CNBC report from $2.48 a share to $27.45. In the report, the Murdoch-controlled company might hand over some of their Los Angeles-based properties, including its film studios on Pico Boulevard and the National Geographic and FX cable channel.
Disney’s Chief Executive, Robert Iger, took over the company in 2005. Since then, Disney has added subsidiaries to its catalog, including Marvel Entertainment, Pixar Animation Studios, and LucasFilm. Disney shares have closed up from $2 to $100.64.
This offer could strengthen Disney’s chances to plunge into the world of digital media. In addition, growing Disney into the tech world could potentially make the company a real threat to other giants such as Amazon, Netflix, and Google.
Three months ago, Disney announced it would be launching its own digital streaming service. One service will take on ESPN sports content, and the other will feature movies and television shows provided by Disney. The entertainment channel is planned to commence in 2019.
Fox owns rights to tons of movies, giving Disney another edge to their already huge library of content. Movie properties like “Deadpool” and “Avatar,” along with TV shows like “Family Guy” and “The Simpsons.”
“This would give Disney a tremendous amount of great programming. This would allow Disney to strike at the jugular of Netflix with devastating force,” Eric Schiffer, chief executive of Orange County private equity firm Patriarch Organization said to the Los Angeles Times.
In giving up its movie studio and television programming, Fox would have sports and news left from the deal. Disney already has its own broadcasting network, ABC, and isn’t interested in investing in other television networks. In addition, the Murdoch family has a second company, News.Corp, which handles The Wall Street Journal, the Times Of London, and dozens of other newspapers in Rupert Murdoch’s native country of Australia.
“Fox understands that mammoth scale in the media business is king,” Schiffer said. “And if you are Fox, there is very little for you to buy. The Murdoch sons are savvy business people, and they ultimately will do what makes the most sense.”
This possible partnership will show promise to both sides. Fox hasn’t had the greatest year in the box office. The X-Men franchise still draws large crowds; however, merging with Disney allows to reunite the X-Men with other characters in the Marvel universe. Unfortunately, other Fox summer blockbusters haven’t delivered this year either. “War of The Planet Of The Apes” and “Alien: Covenant” performed worse than their previous installments. Next, the studio has “Murder On The Orient Express” and “The Post” arriving in theaters.
On Disney’s part, they have had trouble competing with other hit TV shows. ABC is reportedly in fourth place in ratings, behind NBC, CBS, and Fox.
With digital media becoming more desirable over cable, a Fox and Disney merge sounds like a great outcome. CNBC later on Monday stated that there are no current talks as of now, even with all of the positive facts laid out. As time passes, we will see what plays out in the end.