Disney acquires most of 21st Century Fox’s businesses

Reportedly, Walt Disney Co. has agreed to buy most of the Rupert Murdoch’s 21st Century Fox Inc. for about $52.4 billion in stock on Thursday. This deal is sure to reshape the present face of entertainment industry globally.

 

  • It will launch Disney, which is currently a small player known for kids’ channels and Hollywood film distribution, as India’s largest media and entertainment broadcaster with over $1.3 billion of additional revenue in India.
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  • The deal doesn’t include Fox News, the broadcast network or local stations, or the studio’s 50-plus acre lot in Los Angeles
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  • Disney has agreed to pay a $2.5 billion breakup fee to Fox in case the deal gets blocked by federal regulators.
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  • During an interview on ABC’s Good Morning America, Bob Iger, Disney CEO  said that the deal will give Disney a “much larger international footprint” and enable it to “use cutting-edge technology and we know how important that is in this world.”
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  • According to those privies to the talks, the entire business of Star India, including entertainment and sports channels and the digital channel Hotstar, will be transferred to Disney as part of the deal.
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  • Disney would also get Star’s stake in DTH platform Tata Sky in India.
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  • Currently, Disney operates about 8 channels in India namely, Disney Channel, Disney Junior and Hungama TV, Bindaas and film channels UTV Action and UTV Movies, amongst others.
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  • Raj Nayak, a chief operating officer of rival network Viacom18 said, “This is the mother of all media and entertainment deals and will overnight make Disney the number one network in the country. Both Star and Disney will complement each other with missing portfolios in each other’s offerings, The combined entity can bring many synergies to the table and leverage advertising, distribution, licensing and over-the-top (OTT) revenues besides saving costs on some fronts. The merger will make Disney a formidable powerhouse in the region.”
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  • Raj Nayak, who is currently serving as the COO of the rival network had also been associated with Star and Disney in the past. He is also the one who had consulted with Walt Disney for its entry strategy into India.
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  • One of the Disney India Executives also commented on this deal being in favour of them, saying “Star is already mammoth in India. It’s (the deal) a good package for Disney with Hollywood and Bollywood both playing a big part in the combined studio format. Disney will get access to Fox’s massive library of good franchise films. Additionally, Disney will now have a presence in sports, which it didn’t till now”
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