Fox-Disney Talks Back On The Table, Could Be Decided By Years End

It's been about a month since word got out that Twentieth Century Fox wanted to cash out of the movie industry all of the sudden, and that they'd be interested in selling a ton of assets to further emphasize their focus on news and sports coverage on television and online. Disney was immediately seen as the prospective buyer of the Twenty-First Century Fox division, with Sony Pictures, Comcast (the parent company of Universal Pictures), and Verizon later joining in on the discussions or otherwise expressing interest. Now, it looks like Disney is back to being the front-runner to buy a number of Fox's assets - and a deal might be decided upon within the month.







The Latest Updates On The Disney-Fox Deal



Firstly, I'd like to talk about some details discussed in a conversation between two Deadline correspondents, where Mike Fleming Jr. told Peter Bart that he heard how the Disney-Fox deal might just happen:

Why are we hearing a lot more about a potential Disney acquisition of Fox than we did ahead of their acquisitions of Marvel or Lucasfilm, back in 2009 and 2012 respectively? The key factor likely has to do with the fact that Twentieth Century Fox is still operating on full cylinders as a competitor to Disney as opposed to merely being a brand with some attractive intellectual properties attached to the company name. Fox is part of a larger business - Rupert Murdoch's News Corp - and as such, getting a rumor out there that they're potentially selling something is a good way for them to test the waters for long-term interest in continuing discussions and give a crucial boost to the value of their stocks in the short-term. Granted, those kinds of rumors could have looked swell for Marvel and Lucasfilm investors ahead of either of Disney's two big acquisitions, but those deals were seen as sure things by both Joe Quesada and George Lucas respectively at the time they were being negotiated. Conversely, Fox is still evaluating their options here.



Now, new details just surfaced this weekend, courtesy of The Wall Street Journal. Their report corroborates the discussion a t Deadline by stating that yes, talks are still ongoing. Disney's obviously still interested, but Comcast is as well; no word on either Sony or Verizon, though. Up to $48.5B worth of assets are up for sale, with the biggest chunk of that - $15B - being dedicated to Fox's television assets that they're willing to part ways with. For frame of reference, Fox's asking price for everything they're selling is more than triple of the $16B it cost for Disney to buy out Pixar, Marvel, and Lucasfilm combined!



With that in mind, it seems as if the $48.5B in assets are fated to be sold to several different parties instead of exclusively to Disney. One of the key reasons that the initial talks fell through before recently resuming - as these sorts of discussions are prone to do - is that Fox and Disney could not agree on a price. While Comcast is still in the game, it's been suggested that they're primarily interested in Fox's television assets as opposed to buying the company out completely - meaning that, with Sony and Verizon having limited interest at best, Disney is the best bet to make off with a significant portion of Fox's movie franchises. As it stands, Murdoch and his heirs are expected to come to a decision by the end of this year - so we'll probably have a good idea of whether or not Fox is going to sell big portions of the company sometime in the near future. There's a chance the deal could fall through entirely, but for now, let's talk about why it's on the table to begin with.





Why The Deal Is Being Discussed







So now that we've talked about where things are at with Fox and Disney, now would probably be a good time to discuss why things are headed in this direction to begin with. There are a few reasons that Fox is now mulling over an exit from cinematic show business, but I think a major factor in this is the state of the box office right now. Theater attendance for this year has generally been down compared to 2015 and 2016, which isn't necessarily the end of the world, but a clear sign that companies need to adjust their game plans going forward as movies get more expensive. Movies that would typically be reliable hits for studios have suddenly started to underperform or even flop. Right now, the world of the box office is dominated by three of the biggest studios - Disney, Universal, and Warner Bros. - and everyone else (Fox, Sony, Paramount, and the numerous mini-majors and smaller studios beneath them) just lives in it.



Sony and Paramount have definitely seen better days. To borrow a pair of analogies that one of my colleagues have used, Sony is still in the gutter after a humiliating hack revealed a number of secrets about the company while there's a clear brain-drain of creators and a lack of sustainable IPs outside of Spider-Man - which, even then, they don't completely own. Meanwhile, Paramount is in such a terrible state that they have to essentially take the 'up' elevator just to get to Hell, as almost every movie they've made in the past few years has flopped. Fox, in the meantime, is just in an 'okay' position relative to the other studios - but it seems as if 'okay' just isn't good enough for them right now, as Fox was apparently hoping to be on a level closer to Disney or Universal, and they're not in a position to grow that way as a company. So the plan seems to be that they'll go about downsizing in order to focus on TV and online media related to news and sports, but not before planning to make a massive fortune from selling a ton of their entertainment assets in movies and television.







If you're wondering whether or not this means that Twentieth Century Fox ceases to exist as a brand, then don't - the studio itself will continue to exist under new management. The 'Fox' part will probably be dropped and replaced with something else, since, a long time ago, the company used to just be called 'Twentieth Century Pictures'. (I'll spend the rest of the article referring to Disney's hypothetical Fox label as Twentieth Century.) In Disney's case, it'd just become a new label for them, much like Marvel Studios and Lucasfilm are for them. I personally am of the belief that they should use this Twentieth Century label to serve as their new Miramax for the purpose of selling R-rated or otherwise family-unfriendly movies while retaining their squeaky-clean image for their Disney brand itself. This would also allow them to keep certain IP like Aliens and Predator around without having to go for the dreaded PG-13 rating for either franchise again (God knows how well that went for AVP: Alien Vs. Predator).



As I said in my previous piece on this subject, this development means very little for Star Wars itself when all is said and done (so no, you still won't be getting those remasters of the unaltered Original Trilogy as much as you want it - you'll have to pry them from George Lucas's cold, dead hands). There's a small chance that we could hear the Twentieth Century fanfare play in front of some of the older movies upon their eventual re-release, or it could play in front of some of the newer movies if they really, really wanted it to - but I wouldn't hold my breath there. On the plus side, Disney will be able to have a field day with making new box sets based on all of the franchise's movies, which is something that they would have run into trouble with previously given that the rights to A New Hope are at Fox forever. The other five pre-Disney movies (not counting The Clone Wars movie, the two Ewok-focused TV movies, and the Holiday Special That Shall Not Be Named) are all set to revert to Disney in May 2020 without this deal in place, but no self-respecting comprehensive box set would lack the movie that started everything.







If anything, this development is way more important for the Marvel end of things, which is technically Disney's more profitable brand from an international standpoint. It would finally lead to the creation of a fully-unified Marvel Cinematic Universe, complete with the X-Men and the Fantastic Four fighting alongside the Avengers, the Hulk (film rights co-owned by Universal), and Spider-Man (film rights co-owned by Sony, who I imagine will likely drop some of their Spider-Man Villain Universe plans - THAT NOBODY ASKED FOR - in exchange for a cut of all this). It would also mean that we can finally get a great Fantastic Four movie that doesn't have the words The Incredibles in the title. I'd suspect that Disney will let Twentieth Century complete X-Force and round out their intended Deadpool trilogy under that banner, but it might mean that production on certain X-Men spin-offs like Channing Tatum's Gambit and James Franco's Multiple Man (are you bloody serious, Fox?!) could be discontinued in order to pave the way for a full and complete X-Men reboot into the MCU.





Should The Deal Go Through, Things Might Not Be So Simple For Fox & Disney



Inner fanboy excitement concerning Marvel aside, if this deal happens, it does raise a number of questions about Hollywood itself. After all, Time Warner and AT&T have recently run into a few legal and arguably political snags with their big planned merger (although I think that deal will go eventually through, one way or another). While Disney gaining Twentieth Century as a new label sounds good on paper for a lot of us who like Disney's franchises, things are not so cut-and-dry for people working outside of their system. As Fleming alluded to in the Deadline piece, Hollywood insiders have concerns about what this means for their industry, as it - along with the Time Warner and AT&T merger - would suggest a possible monopolization of the business.



Any sane businessperson would have these kinds of fears. Considering that movie theaters are struggling, one of the Big Six movie studios suddenly calling it quits to become a sub-division of another of the Big Six could be deeply concerning for distributors. It's not hard to imagine why - if fewer major releases hit each year, then there is less diversity in terms of content for audiences to choose from and a possible erosion in theater attendance. Disney also has a reputation for being somewhat risk-averse with their franchises on a creative level in recent years and has spent fewer and fewer resources toward developing original IP and non-franchise movies, which are both big reasons why Twentieth Century becoming another cog in their corporate machine is something that would be problematic for artists looking to make a mark.







I do think that this deal is bound to happen - Fox is making it clear that they have an endgame in mind, and it's not one that involves entertainment. Meanwhile, Disney CEO Bob Iger has been known for aggressively pushing to acquire new companies in the Disney media empire, and this would be a great corporate conquest that could happen under his name before he retires from the company a few years from now (assuming, of course, that he doesn't extend his contract again). To me, it sounds like a matter of haggling on the part of two different studios as they talk about what resources should be sold and how much they should be sold for.



One more big update on this situation has hit since I started typing this editorial, and it suggests that Disney is the company that Fox is most interested in selling several of the major assets to (with Comcast looking to be the second-largest recipient of content). The reason being, ironically enough, is the opposite of what my heading's hypothesis - there are fewer legal hurdles involved for a Disney buyout, presumably because Disney isn't a telephone service/internet provider on top of being a content producer. All in all, these are very encouraging signs for Disney and more evidence that they'll reign at the box office in the years to come should this purchase come to pass.





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