Friday, December 15, 2017

Disney's Acquisition of Fox Expected to Drastically Change the Entertainment Industry

Most companies in this day and age are subsidiaries of other companies and there is a relatively small number of parent corporations that own the majority of the other corporations. Disney Inc. is one of those parent companies, and their business decisions over the past couple of decades have made them one of the largest and most powerful corporations in the world. According to an article by the staff of the L.A. Times, Disney's most recent move is to acquire 21st Century Fox, a deal that could completely reshape the entertainment industry.

Most of Disney's sprawling growth has happened since Robert Iger was named CEO in 2005. However, even before Iger, Disney Inc. had begun to acquire competitors and build an entertainment empire. In 1996, Disney made a move that first brought Iger to the company: they purchased Capital Cities/ABC and thereby gained ESPN as well (which was a subsidiary of Capital Cities) for $19 billion. Iger was president of Capital Cities at the time, and the acquisition introduced him to the executive arena of the Disney entertainment powerhouse.

Then, in 2006, after Iger was made CEO, Disney made its second main power move, this time to address a decline in its animation department. After several animated films that flopped in the box office, Disney spent $7.4 billion to acquire Pixar Animation Studios in a stock deal, which allowed them to retain John Lasseter and Ed Catmull, the geniuses behind Pixar hits like "Finding Nemo" and "Toy Story." The acquisition has since paid off many times, as the Disney-Pixar animation team has arguably become the best in the world.

The action film franchises were next on Disney's road to supremacy. In 2009, Disney purchased Marvel Films for $4 billion, and in 2012, they acquired Lucasfilm (and the Star Wars franchise) for another $4 billion. Since then, Disney has made dozens of movies set in the Marvel cinematic universe and has just released another movie set in the Star Wars universe, and will soon be opening a Star Wars Land at Disneyland. Additionally, by owning those two companies, Disney has put itself in a position to rival streaming sites like Hulu or Netflix by limiting the spread of their movies on competing streaming platforms. Then, by acquiring a controlling stake in BamTech (a streaming video company) in 2017, Disney has assured itself a competitive advantage in the online streaming market, both for sports (ESPN) and TV shows/movies.

Disney's latest move to purchase 21st Century Fox could be its most important decision in making sure it remains the most powerful entertainment company in the world. It's possible that government regulators will stop the $52.4 billion deal on anti-trust arguments, but if the purchase goes through, Disney will be able to add several existing shows (The Simpsons, Family Guy, etc) to its video streaming service, will gain a majority stake in streaming competitor Hulu, and will gain control of another studio, as well as Fox's television channels, including FX and National Geographic. Disney will be more powerful than any other company could hope to be, and that is likely to affect Hollywood in unpredictable ways,

Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on FacebookTwitterLinkedIn, and Google+.

No comments:

Post a Comment