Disney Ramps Up Direct-to-Consumer Stockpile With Fox Deal

Mouse grabs hot studio, film franchises, regional sports networks and FX in the pact

Disney’s deal for Fox is primarily about giving the House of Mouse more content to send directly to consumers as it steps up its plan to launch a couple streaming products.

Disney plans to premiere an ESPN-branded streaming service in 2018, which will be bolstered by the regional sports networks it gets from Fox, and a Disney-branded platform, built around TV series and films, in 2019. That is seen as a direct competitor for Netflix. On-demand streaming is, presumably, the future of television consumption. That is, if it’s not the present.

ESPN has lost 1.4 million cable subscribers this year, says the NY Times, representing tens of millions of dollars in revenue.

The Fox studio produces NBC’s This Is Us, ABC’s Modern Family, Fox’s own The Simpsons and Showtime’s Homeland, among many other popular shows.

ABC Studios, meanwhile, lost its star producer, Shonda Rhimes, who is shifting to Netflix. Its shows include Black-ish, Marvel’s Jessica Jones and Grey’s Anatomy.

According to the NY Times, “Disney hopes that the Fox television juggernaut can supercharge its ambitions by producing original series for the services and providing access to a catalog of older offerings. Fox would also contribute its stake in Hulu, the streaming service that shows ABC content and original programming like The Handmaid’s Tale, giving Disney a majority share.”

Hulu is owned by Comcast, at 30%, the same stake that Disney and Fox had prior to their deal. Time Warner got on board with a 10% stake last year.

In the movie realm, Disney, which owns Lucasfilm, Marvel Entertainment and Pixar, picks up the Avatar franchise, Ice Age and Planet of the Apes, among others. The deal means the number of prime Hollywood film studios goes from six to five.

Disney also gets FX in the acquisition, home to Fargo, American Horror Story, Snowfall and other edgy series, as well as National Geographic.

The pact, which awaits approval, is valued at $66 billion.

Twenty-First Century Fox announced a new “Fox” that includes Fox News Channel, Fox Business Network, Fox Broadcasting Company, Fox Sports, Fox Television Stations Group and sports cable networks FS1, FS2, Fox Deportes and Big Ten Network (BTN). It will also include the company’s studio lot in Los Angeles and an equity investment in Roku.

Disney said that Bob Iger, chairman and chief executive, will continue running the company through 2021.

The Disney-Fox deal will “radically transform Hollywood into a land of fewer giants,” says the LA Times.