Menu

cine ad

Disney Buying Fox Is About More Than X-Men

Disney Buying Fox Is About More Than X-Men

There was a battle raging on between Disney and Comcast, both of whom were trying to flex enough to purchase Fox. There are many loopholes being jumped through for each company to simply make a proper bid, but this is a rather big deal in many ways for all of consumers and both companies. Many fans are giddy that Disney buying Fox means the X-Men can join the MCU, but, Marvel brand aside, that isn’t what this purchase is entirely about. Now that Disney has finally purchased Fox (unless some miracle happens that denies their bid), what can we look forward to?

Let’s take a look at some of the history/numbers behind just the X-Men rights. The deal originated back in 1993 where Fox only had to pay 2.3 million dollars for the rights to the entire mutant catalogue. Since then, Marvel/Disney have been paid under 100 million dollars in licensing. To us ordinary people this is a lot of money, but when you take in that the bids for Fox are 70+ BILLION dollars, you realize this number is just a tiny fraction.

Obviously the  X-Men have gained momentum over time and is worth WAY more than 2.3 million, but with how much money Disney is tossing at Fox, if the idea was to simply get the X-Men rights back, they’d have no problem asking for just those at a cheaper price. After all, Disney has rights to the X-Men in almost every other regard.

So what’s the deal truly about?

hulu

Hulu

Comcast, Disney and Fox own about 30 percent each of Hulu (Time Warner owns 10 percent) and currently Hulu is one of the strongest competitors on the streaming network with 20 million subscribers. With content that competes with Netflix, this is a great asset to have in the field. Remember that Disney is starting up their own streaming service soon. What better way to launch it than to slowly take over Hulu and transform their network/services into their own Disney infrastructure?

This move could allow them to compete with Netflix quicker, and it’ll be needed considering they are dealing a major blow to Netflix by removing all their content (which I’m sure isn’t making Netflix too thrilled). Buying Netflix probably isn’t an option considering they are worth more than even Comcast, sitting at around $150 billion. With Disney taking the lead they can now look to ways to engineer Hulu into a global leader without three heads poking in to make changes. Currently Hulu is only domestic and is rather lacking in exclusives due to the 3 way leadership being afraid to dive all-in.

It’s very easy to see why this is important to Comcast as well considering “cutting the cord” has been very real lately with Netflix, Hulu, and Amazon Video growing fast, while cable subscriptions continue to decline. Comcast is scared to lose the service since this is where their original content has been going (Disney of course has been selling their content to Netflix), and they have been the only ones really trying to keep it going.

However, with Disney taking over there comes concerns as one company will likely be forced to sell their assets. Comcast (more than likely) cannot take on the $550 million in losses Hulu has made over the past year, and probably doesn’t have the assets available to keep it going. Which would force their hand to sell to Disney. So at the end of the day, Disney buying Fox can devalue Comcasts shares, making it easier for Disney to have full rights to Hulu.

espn logo 060517 getty ftrjpg ylcny37pgmrp153xpshefwv6h

ESPN

It’s been noted for years now that ESPN has been struggling and Disney has been trying to find ways to improve it. While the deal doesn’t include core Fox Sports networks (like FS1, FS2 etc) it does include regional networks that control over 40 major league teams, plus assets in college sports, MLS, and the WNBA. Several sources have looked into the value of this alone being at an estimated $30 Billion dollars, that would put these assets at over HALF the original offer Disney made of $51 billion (and nearly half of their new $71 billion offer). At the end of the day, snagging up those networks from FOX could save ESPN and keep Disney in the sports world. ESPN would gain control of 22 regional networks (YES Network, FS West, etc) and exclusive control of the 44 teams.

ESPN is also trying to start their own branch of digital services, and this only bolsters the line up even more. It also gives them more leverage with cable companies to be part of a more complete package, while enticing customers to pay extra for any package that includes ESPN. Without a doubt all these networks will become ESPN branded rather quickly.

fox

Content Beyond X-Men

While it is fun to think about X-Men joining the MCU (allowing for a complete Marvel Universe), it’s easy to forget all the other things Fox owns. Being one of the biggest entertainment providers in the world, Fox competed with Disney on multiple levels with content.

We are talking both major movie and TV franchises. Disney would take control over The Simpsons, Avatar, Deadpool, Planet of the Apes, Alien, Diary of a Wimpy Kid, Die Hard, Home Alone, Modern Family, Empire, X-Files, Buffy: The Vampire Slayer, 24…. The list honestly seems endless, especially when you drop into the backlog.

Similar to ESPN, Disney also gets a chance to bolster their ABC network and sub networks with this content. They get rights to FX, FXX, and FXM and all of these will undoubtedly be merged or rebranded with ABC. They get a chance to utilize all this content to become a bigger player in the network battle.

sky logo b90e8c9

Sky

Another asset that is commonly overlooked by us in the States, is that Sky is a big part of this deal too. Fox had went to war with Comcast earlier to buy rights to Sky, and won. The cable giant is a big deal for world wide rights as it is a distributor platform for European countries. Sky also has rights over major assets like Premier League and other content, similar to Fox and Comcast here in the States (as stated above with Fox Sports). Disney could utilize this platform to grow their content.

Recent rights purchases put their numbers in the $15-20 Billion dollar range, which means if you combine this with the sports portion you would see that all other assets were really secondary.

So yes, Disney buying Fox is an exciting move for Marvel fans, but no that isn’t why this deal is happening. Disney is trying to become a stronger distributor of content, and all the content provided in this deal really makes it a strong investment for Disney. They not only get access to distribution, they strengthen all areas of their company in almost every way. Meanwhile controlling stake in Hulu provides them with some future proof planning.