Why did the Mouse eat the Fox? To get to the other side.

By Elliot Bullman

This week Disney pulled off the most dramatic restructure of the film and TV industry in decades bypurchasing the entertainment assets of 21st Century Foxfor $52.4 billion.

It's fascinating to take a look behind the curtain and assess the business reasons behind headline-making deals like this one. While film fans speculate as to the impact on their favourite franchises, the reality is that these two companies are lookingfar beyond the X-Men and the Fantastic Four.

disney Fox 2

So why were Disney and Fox really interested in these negotiations?

The Disney Perspective

Let's begin with Disney. Disney's fundamental goal is to ensure its new streaming site has as much content as possible. In 2019,the House of Mousewill release a brand new streaming service, one that will contain the entire Disney library including Marvel, Lucasfilm, and Pixar brands. As a result, Disney has already announced that their content will be pulled from Netflix when their current contract expires.

disney Fox

Disney weren’t just interested in Fox's current properties either; their eyes are set on the 21st Century Fox Vault which includes X-Men,Fantastic Four,Avatar,The Simpsons,Silver Surfer,Planet of the Apes,X-Files, theAlienfranchise, FX network and shows on it likeLegion, the character Cable, Deadpool, Logan and The New Mutants.

Now can you imagine a single streaming site containing everything ever made by Disneyand21st Century Fox? This entire library is so vast it will knock even Netflix into second-place.

The Fox Perspective

On Fox's side, the deal is set against an intriguing backdrop. The company owns 39 percent of the UK broadcaster Sky, and has been trying to gain full control, so this deal could transform the British news landscape, not just the Hollywood landscape. As the UK’s Financial Times noted:

disney Fox 4

"There is little doubt that a Fox-Sky merger would create a monster. Despite the spin-off of their newspaper holdings, the Murdoch family still exert common control through substantial stakes in their TV and press ventures, which include the Sun, Times and the Sunday Times titles. Should Fox get control of Sky, they would control the dominant UK news producer across television, radio and print."

According to Sky, both EU and U.S. government regulators will have to approve the bid as well, which could be difficult. Either way, it's Disney's headache now.

disney Fox 3

So, in conclusion, we'll see Disney's digital offering become even more significant than anyone expected, while Fox will be able to focus on increasing their news and sports coverage.

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