Disney Acquires 21st Century Fox for $52.4 Billion

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Disney Acquires 21st Century Fox for $52.4 Billion

Tara Mercene, Staff Reporter

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After many rumors, it has been confirmed that Disney has bought 21st Century Fox assets, except for Fox News and Fox Network, for $52.4 billion. The company has made the biggest deal in the entertainment industry and is expected to receive $2 billion in savings due to the merger.

According to Variety, the deal gave Disney access to Fox’s 30% stake in Hulu, shares Endemol Shine Group, the Star India satellite service, and a 39% interest in Sky, a Euro satellite broadcaster. The merger has given Disney large control over multiple TV programming channels like the National Geographic channels and FX Networks outlets, which will give it more benefits from series under 21st Century Fox. The Disney chairman-CEO, Bob Iger, expects the deal to “substantially expand our international reach, allowing us to offer world-class storytelling and innovative distribution platforms to more consumers in key markets around the world.”

Besides the entertainment industry, consumers will also receive a profound impact on the merger. Fans have the possibility to see interactions between X-Men, Spider-Man, and the Avengers, and Fox Animation Studios’ Anastasia has the possibility to become Disney’s new princess. According to brand analyst, Jonathan Cohen, Disney will be able to “target fans of these genres at an even greater scale.”

There are many pros and cons to be seen with the merger and senior, Anna Resek, believes that because of Disney’s family friendly agenda it may conflict with the opposing agenda of Fox’s. “Fox and Disney offer consumers different kinds of films so they offer a variety of choices. A merger could hurt the diversity of the marketplace, like what if you start seeing Bambi in an X-Men movie?”

The company is also expected to release a streaming service in 2019, which will compete with Netflix. The company plans to remove their work off Netflix in order to create premium content under one roof, according to Forbes. However, this could be a negative impact for consumers since it could result in fewer choices and higher prices for the content.

Ms. Feinstein, who teaches Economics, has also stated that, “Any time two large companies merge, it means a loss of choice for consumers.” Since our economy relies on competition and for consumer interest on choices, a merge like Disney and Fox “removes one more choice from the economy, leaving consumers with one less choice to make. This puts the decision making power in the hands of the companies, not the consumers. Generally, this leads to an increase in price for consumers, as they lose one more option, and companies have one less competitor to compete with.”

Feinstein has also stated that there could be good side effects to the merger since it could be cheaper for a single large company to exist in the market if regulated properly for consumers, but she is not sure that this will be the case for Fox and Disney. “This merger seems to remove a choice of information output for consumers, without a decrease in the price of that output.”

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Disney Acquires 21st Century Fox for $52.4 Billion