Mickey Mouse and Deadpool



Mickey Mouse and Deadpool are now officially employees of the same company. Less than a year ago, shareholders from Disney and Fox agreed for Disney to buy 21st Century Fox. This Wednesday, on March 20th, Disney officially acquired 21st Century Fox.  The deal cost Disney $71.3 billion, the largest film merger yet. An important distinction is that 21st Century Fox is NOT Fox Corp. Fox split into two companies, with Fox Corp retaining the TV channels and sports programming. Think of 21st Century Fox as the entertainment side and Fox Corp as the "real-life" media side. It's a bit of a simplification, but for the purpose of this post will help keep things straight.

Media Control 

In 2018, Disney had a market share of over 26% and 20th Century Fox had a market share of 9.1%. Comcast attempted to buy Fox for $66 billion, but Disney was intent on purchasing, so Comcast's bid only drove the price higher. Both companies were in the top 5 largest media firms. As of this week, Disney now controls 35% of the movie market. 

Prior to Disney's purchase, Disney had already owned Lucasfilm, Marvel Studios, and Pixar. Similar to the article we read about Google, Disney is stopping competition. However, unlike Google, Disney is buying them, rather than destroying them. In 2017, Disney already made almost $1 billion more than its next biggest rival.

One concern other than the monopoly Disney would hold over entertainment, is the variety of content. Because Disney is spending so much money on their productions, this merger could mean the death of mid-budget movies. Disney spends tens to hundreds of millions on their movies; without Fox giving "lower" (middle) budget movies a platform, the only content produced will be these massive productions. 

Employees

In the weeks following the merger, The Hollywood Reporter estimates that around 4,000 jobs will be lost, with analyst Rich Greenfield of BTIG estimating up to 10,000 in the long term.


Notable Losses for Fox


  • Chris Aronson: Fox's film president of domestic distribution 
  • Andrew Cripps: Fox's manager for international distribution
  • Fox 2000 
    • produced The Hate U Give, Hidden Figures, and Love, Simon



Notable Gains for Disney


  • Daredevil
  • X-Men
  • Fox’s TV production company 
    • owns The Simpsons
  • Majority of Hulu




Sources
https://www.ign.com/articles/2019/03/21/fox-layoffs-begin-following-disney-merger-4000-jobs-expected-to-be-cut
https://www.vox.com/culture/2019/3/20/18273477/disney-fox-merger-deal-details-marvel-x-men
https://www.theatlantic.com/entertainment/archive/2019/03/disney-fox-merger-and-future-hollywood/585481/
https://www.theatlantic.com/entertainment/archive/2017/11/the-chilling-implications-of-a-disney-fox-merger/545135/


This visual shows the control of six major media networks in 2018, prior to the Disney/Fox merger. Now, there are only five major players. (via http://fortune.com/longform/media-company-ownership-consolidation/)

Comments

  1. AnonymousMarch 28, 2019 at 8:41 AM

    Thank you so much for sharing this with us! Your post reminds me of all Marvel characters that are controlled by different companies. As a Marvel fan, I know that characters like Spider-man, the Hulk, Venom, etc. are not totally controlled by Disney which owns the film rights to most of Marvel's characters. I think for the future of Disney, they may need to take control over all film rights to the characters. Just think about how huge and successful the Marvel Cinematic Universe has become, Disney takes the ownership would hugely benefit the company's revenue.

    Source: https://www.digitalspy.com/movies/a870469/marvel-rights-characters-disney/

    ReplyDelete
  2. AnonymousMarch 28, 2019 at 12:34 PM

    This is a really interesting topic that we interact with in our daily lives but I think most of us, myself included, don't think about the fact that Disney, for example, controls majority of the industry by owning other companies. In the article we read we learned about how impactful this is because people aren't aware that Disney owns ESPN and may therefore be confused as to why ESPN is showing ads for Disney, but knowing Disney owns ESPN, it makes complete sense.

    ReplyDelete
  3. AnonymousMarch 29, 2019 at 8:22 AM

    Very interesting post! This is a similar idea to the article we read in class about Disney and Universal Studios. However, you mentioned that Disney holds a monopoly over entertainment, but I think Disney is one company out of a few in an oligopoly situation. An oligopoly market is one in which only a few companies hold majority share. As such, it is clear that with a few major companies holding power in the entertainment industry, it is an oligopoly situation. An oligopoly situation is interesting to think about because firms can either work together or not, either collusion or competition. Do you think that Disney and others are helping or hurting each other, collusion or competition?
    Source: https://opentextbc.ca/principlesofeconomics/chapter/10-2-oligopoly/

    ReplyDelete
  4. AnonymousMarch 30, 2019 at 6:24 PM

    This was a really interesting post! I also wonder what Disney's control over such a large portion of the movie market has on the kinds of content they are able to produce. Perhaps it is silly, but Disney in name alone is associated with child friendly content. We think of Disneyland, Disney Princesses and Mickey Mouse. But especially with the merge with Fox, could Disney potentially decide to pull back on more explicit content?

    ReplyDelete
  5. AnonymousMarch 31, 2019 at 7:45 PM

    Interesting post. It's a really complicated market to understand and was really interesting to take a look at being a consumer who watches a-lot of these channels. Disney is finding ways in making them the lone firm in the entertainment industry by buying out other firms in the market. Taking ownership has benefited Disney making them one of the richest industries.
    https://www.titlemax.com/discovery-center/money-finance/companies-disney-owns-worldwide/

    ReplyDelete

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