21st Century Fox has been in talks to sell most of its company to Disney, according to a report by CNBC. The discussions are said to have centered around Fox shedding its film and TV divisions, networks like FX and National Geographic, and the company’s stakes in international networks like Star TV and Sky.
Fox is said to be primarily interested in selling its entertainment divisions in order to focus on what the company’s management is said to view as its most profitable areas; selling the costly film and TV divisions to Disney would let Fox better focus on its successful news and sports programming. As such, Fox isn’t said to be interested in selling the Fox broadcast network, Fox Sports, and the Fox News and Fox Business brands. (Incidentally, Disney also legally can’t own the Fox network because it already owns ABC, and would probably run into antitrust issues with ESPN if it somehow could convince 21st Century Fox to sell Fox Sports.)
For now, it seems that talks haven’t progressed very far, with The Wall Street Journal adding on to CNBC’s report by noting that the companies are no longer actively discussing the deal.
There’s obviously a lot to say about the intellectual property that Disney would gain out of a Fox acquisition. Comics fans would no doubt be pleased to see franchises like the X-Men and Fantastic Four back under the stewardship of Marvel Studios, and perhaps even integrated into the Marvel Cinematic Universe. And owning the rights to Avatar would certainly mean Disney’s new Pandora park makes a lot more sense. But if such a deal actually went through, it would have massive ramifications for the overall film industry that go far beyond whether or not Wolverine shows up in the next Avengers movie.
Disney is already far and away the biggest player in the film industry. Last year, the studio took the top five slots at the worldwide box office, shattering records with total grosses of over $7.2 billion. Acquiring Fox would give Disney even more of an edge, resulting in what could be an almost unstoppable entertainment juggernaut. The purchase would also given Disney access to Fox’s massive back catalog of popular films and TV shows, which Polygon’s Julia Alexander points out would be a huge bolster to Disney’s upcoming exclusive streaming service.
It’s the sort of move that could lead to even more consolidation in what’s an already fairly commoditized industry, where even major studios like Warner Bros. and Universal are just small parts of the massive portfolios of parent companies like Time Warner and Comcast.
In the face of the kind of pressure that a combined Disney / Fox could present — along with the associated lock-down on major franchises that Disney would command — it’s easy to see a world in which fighting that kind of battle isn’t worth it for some of these larger corporations. This is especially true in the case of companies like Sony, for example, that have entertainment arms that have been struggling to post profits in recent years. One of the only bright spots for the company? Spider-Man: Homecoming, which the studio made in concert with Disney-owned Marvel.
For these “smaller” studios like Fox and Sony, it may soon be the case that if you can’t beat Disney, the only choice left is to join them. Literally.