Disney announced on Thursday its intentions to buy numerous assets from 21st Century Fox, but that doesn’t mean it’s definitely happening.
After numerous rumors, Disney and 21st Century Fox made their deal official on Thursday morning. Listening into the investor’s call shortly after the announcement, Disney execs stated they expected it to close within 12 to 18 months. A deal of this size has to go with regulatory approval, and that very well could bring the whole thing to an end.
While fans have been excited by the prospect of the X-Men and Fantastic Four coming to the Marvel Cinematic Universe, there is a lot more at stake here. Although Disney said that it likes to let companies continue to run as they are, this would concentrate around 40 percent of box office revenues under one umbrella. It will also technically reduce the number of major studios from six to five, potentially shrinking the number of outlets that projects can be sold to.
The Writers Guild of America West union announced Thursday morning its intention to campaign against the merger. “In the relentless drive to eliminate competition, big business has an insatiable appetite for consolidation,” the union said in a statement. “Disney and Fox have spent decades profiting from the oligopolistic control that the six major media conglomerates have exercised over the entertainment industry, often at the expense of the creators who power their television and film operations. Now, this proposed merger of direct competitors will make matters even worse by substantially increasing the market power of a combined Disney-Fox corporation. The antitrust concerns raised by this deal are obvious and significant. The Writers Guild of America West strongly opposes this merger and will work to ensure our nation’s antitrust laws are enforced.”
Of course, one has to assume that two companies of this size had a veritable legion of lawyers go over every aspect of this deal to see how it would hold up against regulatory backlash from the Federal Trade Commission. There were also parts of 21st Century Fox that Disney didn’t touch for this very reason such as the television network.
Should the deal not move forward, Disney has agreed to a $2.5 billion breakup fee to be paid to 21st Century Fox. For a deal valued at $52.4 billion it’s a pittance, but it still would be a check no company would enjoy writing.
So while there is excitement in the air over what this deal could mean to the film industry, there is still a long road to go down to make it a reality. Don’t go considering Fox a Disney property quite yet.