70 years ago, United States v. Paramount Pictures, Inc. (also known as the Hollywood Anti-trust case of 1948) divorced studios from movie theatres. It led to the shuttering of Hollywood titan RKO Pictures and was arguably the most seismic shift in Hollywood history – until now. Disney is officially on track to acquire 21st Century Fox from Fox Broadcasting Corporation for a total of $52.4 billion, in a deal that feels as big as the Paramount case precisely because it’ll have the opposite effect.
Apologies if you’re here for X-Men/Marvel crossover news, but that’s small potatoes in the face of what just happened.
First, the good news. The 53-acre 20th Century Fox LA studio lot will remain under Rupert Murdoch and whatever becomes of Fox. Those are names you don’t normally associate with “good news,” but the most prominent speculation surrounding this merger has been just how many jobs will be lost. Jobs will still be lost, of course. That was inevitable, but the studio facilities remaining open for the time being (we don’t know for how long, though they’ll presumably be leased out to other shows) means several thousand jobs will remain intact, at least for a little while.
On the more worrisome side, Disney now owns 20th Century Fox, Fox TV, National Geographic, FX, India’s Star TV, a controlling stake in Hulu, a 39% stake in Europe’s Sky TV, and the ability for ESPN to use Fox’s regional sports networks as a promotional platform. What’s more, Murdoch won’t be holding on to the Fox News networks as previously speculated. Those will be all spun off into a new company under Fox’s shareholders. And yeah, this means Disney owns stuff like the X-Men, the Fantastic Four and The Simpsons, but more concerning, it now owns the Avatar franchise, which makes its potential market share both domestically and abroad gargantuan. With Disney already cornering movie theatres into demands over how and when to run The Last Jedi, this doesn’t exactly bode well for exhibitors (or for smaller films, which will probably suffer under some sort of tiered ticket pricing structure in the near future).
If you were about to take solace in the fact that Rupert Murdoch no longer has a stake in all these media assets, guess again. Murdoch and his Large Adult Sons James and Lachlan (Fox’s CEO and co-executive chairman, respectively) are now key shareholders of Disney stock, with Fox shareholders getting a sweet 25% ownership of Disney in the process, 5% going to the Murdoch family trust and the Murdochs remaining in control of what’s left of Fox.
Bob Iger is also going to remain Disney chairman and CEO through 2021, so good for him. As for everyone in the American film industry (and adjacent industries) who will find themselves bearing the financial brunt of this consolidation, our condolences. To those of you want to see the X-Men kicking it with the Avengers: congrats, I guess.