And then there were five…

Since the 1940s, Hollywood has been dominated by the “Big Six” studios. Warner Bros., Paramount Pictures, Columbia Pictures, Universal Pictures, Walt Disney Pictures and 20th Century Fox. As of 12:02 am East Coast Time, that number has been reduced to five as The Walt Disney Company completed its acquisition of 20th Century Fox.

In some ways, this is a return to the “Golden Age of Hollywood” when, during the late 1920s to mid-1940s, the “Big Five” lead the industry, controlling every aspect of film production from the studios, the exclusive contracts with actors and even their own respective theater chains. After the breakup of the studio system by the government, Fox was one of the three, along with Warner Bros. and Paramount, to survive into the modern era as an independent studio.

But, as the entertainment industry continues to be disrupted by advances in technology, the media companies are jostling for position in the Streaming Wars which, while already underway, will only get more intense beginning this year. Warner Bros. was acquired by AT&T last year and Viacom will likely merge with its corporate sister, CBS in 2020 following the ouster of the latter’s CEO, Les Moonves in September.

What did Disney Get?

In an effort to bolster the offerings on its upcoming Disney+ streaming service, which launches late this year, Disney made the deal to gain the massive amounts of content in the form of over 80 years of Fox’ movie and television library. Beyond that, the Mouse also takes over the various live action and animated production companies, National Geographic Partners and much more. The company has a seven-year lease on the studio property in Los Angeles, with the remainder of Fox, now known as New Fox operating from New York.

Disney’s Chairman and CEO, Robert Iger described the acquisition:

“This is an extraordinary and historic moment for us—one that will create significant long-term value for our company and our shareholders. Combining Disney’s and 21st Century Fox’s wealth of creative content and proven talent creates the preeminent global entertainment company, well positioned to lead in an incredibly dynamic and transformative era.”

Fandom is Big Business

While most corporate mergers stay comfortably on the business pages, the Krypton Radio and other fan sites have covered the Disney-Fox merger since it was announced in November of 2017. Disney regained full control of Star Wars Episode IV: A New Hope along with the X-Men and Fantastic Four which Marvel had licensed before becoming its own studio. In addition to Fox’ library of past productions, Disney also gets the rights to Fox’ ongoing SciFi franchises such as Avatar and Planet of the Apes.

It is reasonable to expect that, in addition to the Star Wars live-action series, fans can expect to see spin-offs from other properties. Hulu, now 60% owned by Disney, announced four interlinked animated series including Howard the Duck in February. And, there are persistent rumors that Jessica Jones, Luke Cage and the other Marvel series formerly streaming on Netflix will be revived in the near future.

Where Do They Go from Here?

While a fourth installment in the Apes franchise was hinted in 2016 without any apparent follow-up, the first of four(!) Avatar sequels, Avatar: The Way of Water will hit screens December 17, 2020 with the third installment, Avatar: The Seed Bearer the following year on December 18.

On the Marvel side of the house, things are more complicated. There are currently two X-Men movies in production, Dark Phoenix and The New Mutants. Dark Phoenix will likely be the last X-Men cinematic release for the foreseeable future after it debuts June 7 of this year.

The New Mutants, helmed by Josh Boone, has been “troubled” since early in its production with the decision for it to be a horror flick being reversed – and then reversed again. The new scheduled release date is August 2, pending extensive reshoots. Industry insiders report that any theatrical release will depend on the reaction by Disney execs after seeing the completed product. If it ultimately is pulled from the theatrical lineup that it may be sent directly to Hulu instead. In any case no future X-Men titles have been greenlit. It will fall to Marvel Studios head Kevin Feige to decide when and if to integrate the characters into the MCU. When they return to the big screen, it will be with a blank slate.

The one clear bright spot is Deadpool. Ryan Reynolds, who plays the Merc with the Mouth, has been continually posting supportive (if not always in good taste) missives regarding the merger. And, while it couldn’t be said that those made a difference, it is confirmed that Reynold’s fourth wall breaking assassin will be continuing at Disney.

Risks and Rewards

Exactly how the R-Rated Deadpool integrates into the Disney brand remains to be seen. The Disney+ streaming service will be family friendly with no content stronger than PG-13. That likely leaves Hulu as the outlet of choice for his first two movies as well as any others in the same vein. Indeed the aforementioned Howard the Duck and its companion series will be doing their Adult Swim-style antics on Hulu as well.

But, 20th Century Fox was a studio known for taking big gambles and reaping huge rewards as a result. They famously backed George Lucas with his first Star Wars movie. In a similar vein Titanic and Avatar were anything but guaranteed successes when Fox picked them up, but the two movies went on to be the first and second top grossing films of their time.

Fox Searchlight Films has been the studio’s home for independent films, including the Academy Award winning The Shape of Water. The difference in corporate cultures between Disney and Fox are fairly wide with the latter being much looser than that of its new corporate parent – but, Disney has shown that it recognizes successful formulas in its previous acquisitions of Marvel, Pixar and Lucasfilm. It is thought that having an outlet that repeatedly produces Oscar-favorites is sufficient incentive to leave certain teams alone during the inevitable job cuts that follow such mergers.

Sports Spinoff

Disney doesn’t get to keep everything, however.

To receive the approval of the Department of Justice, Disney had to agree to sell off the 22 regional sports networks (Fox Sports West, Fox Sports North, et cetera.) Keeping them with the company’s ESPN network and the ABC television affiliates would be unfair competition in local sports coverage. The Yankees bought out the portion of the YES network that they didn’t already own, the part that covers Yankees baseball and Brooklyn Nets games. Fox itself declined to buy back the channels, retaining only its FS1 and FS2 channels.

It is unclear whether any one entity will buy the remaining channels as a group – something which would provide a return of nearly a third of the $71.3B that Disney paid for Fox – or, whether they’ll be sold off piecemeal. Collectively, the Fox Sports Regional channels were huge money makers delivering up to eight times their operating costs. The complication for any would-be buyer is that they will lack the clout enjoyed by Fox (or Disney) in compelling cable operators to carry them.

And on the Small Screen…

For its broadcast and streaming efforts, Disney now fields an impressive stable of show-runners (producers) for various series productions. With the acquisition of Fox, Disney launched Disney Television Studios. This massive operation encompasses ABC Studios, ABC Signature – which focuses on cable and streaming content, 20th Century Fox TV and Fox 21 TV studios.

Among the dozens of hit-makers, Seth MacFarlane has generated millions for Fox with his sci-fi Trek-alike series The Orville, now in its second season, along with his animated seriesFamily Guy and American Dad. MacFarlane has long been critical of Fox owner Rupert Murdoch, but his success has allowed him free reign. His contract expires later this year. It remains to be seen if Disney is willing to take a hands-off approach with a talent who’s brand is centered upon snark, but financial success has a way of smoothing a lot of bumps.

Loren Bouchard of Bob’s Burgers renewed his contract a year ago. His show will return next season along with Family Guy and The Simpsons which collectively generated billions for 20th Century Fox TV.

As they say in showbiz, “Stay tuned!”

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