It appears Disney must overcome one more battle before it can claim the spoils of what we now know as Fox. On Wednesday, Comcast submitted a new cash bid for the Fox assets currently up for sale—which include the company’s film and TV studio, its 30-percent stake in Hulu, and cable networks like FX and National Geographic.
Comcast had flirted with the idea of buying these same properties last year, but potential anti-trust issues stymied its effort. Thanks to this week’s successful AT&T-Time Warner merger, those problems may have evaporated.
Disney announced its deal to acquire Fox last December, pending regulatory approval. But Comcast’s bid is higher—which means that the powers that be at Fox are legally required to consider it, even as plans for how Fox would integrate with Disney were just starting to take shape. Some staffers at Fox are reportedly rooting for Disney to win out—both because it seems there will be fewer staff redundancies if Disney buys Fox, and because of Disney’s undeniable box-office power. Others within the company apparently believe that Comcast—particularly its film arm—might be a better fit, since its studios have a greater willingness to put out R-rated movies. Comcast’s bid might inspire other companies to make their own offers for Fox as well, which could complicate things further.
The parts of Fox that are not up for sale—which include Fox News, Fox Business Network, Fox Sports 1 and 2, and the Fox broadcast network—will all spin off into a company that’s been dubbed “New Fox.” The rest, including the company’s 30-percent share in Hulu, will go to whoever successfully purchases it.
As these mega-conglomerates duke it out for control of the media—like Transformers punching each other in the sky, as the rest of us cower below—it’s easy to be stymied by a simple question: “How is this going to affect me?” Glad you asked! We’ll do our best to untangle it all—though when multi-million-dollar corporations are involved, variables are countless and certainties are rare. All any of us can do is make some educated prognostications.
What’s going to happen to Fox?
Fox’s broadcast network, which airs shows like The Simpsons, The Orville, Family Guy, and 9-1-1, will survive no matter who buys the rest of Fox’s assets, as a part of “New Fox.” (If for no other reason, the Fox broadcast network is safe because the F.C.C. prohibits a merger between any of the Big Four broadcast networks. Disney owns ABC, and Comcast owns NBC as part of NBCUniversal.) But depending on how this merger goes, you could see a major shift in its programming.
Fox’s TV studio is part of the package being sold, which means that the new Fox network will no longer have an affiliated studio. Rupert Murdoch has said that the new Fox network will still program some entertainment content—as opposed to only news and sports—but there’s a good chance the new network will favor cheaper programming, particularly reality, rather than scripted series. (Which is fitting, in a way, since reality is the genre that helped Fox forge its reputation as a network back in the 1990s.) Murdoch and other executives have noted that the new Fox could also pick up series from studios unaffiliated with other broadcast networks—studios like MGM, Sony, and Warner Bros. Right now, though, 80 percent of Fox’s programming comes from Fox Studios—which will pose a problem going forward.
Broadcast networks make most of their money from ads, and as broadcast viewership continues to decline, returns on that front will only continue to diminish. That’s why owning a studio is so important; most networks have pushed to own more of their own programming in recent years because that enables them to capitalize not only on ad sales, but also on additional revenue sources like streaming sales, which go to the studio. So while the new Fox could buy up scripted series from other studios, it would only make money off the ads it’s able to sell against them. Making a profit in this way would not be impossible, but it would be tricky—which is why it’s more likely that in the long run, Fox will change its programming balance.
Will I still be able to watch The Simpsons and 9-1-1?
Basically, the series that will survive after the merger will be the ones that continue to bring in money. This means shows like The Simpsons—which actually predicted a future in which Disney buys Fox back in 1998—as well as Family Guy and Bob’s Burgers might be safe, though there’s a good chance they could move to a new home.
Ratings on these series, like most traditional TV shows, have declined over the years. For shows like The Simpsons, re-runs and other brand extensions are where the real money is made—and none of that would be going toward Fox. If Disney chooses to keep The Simpsons running beyond its contract with Fox, which ends at Season 30, it could move the show to ABC or Hulu should the merger go forward. Comcast could do something similar with NBC or Hulu—or, in either case, the series itself could end at Season 30, which is what most fans of the show’s long-gone original iteration would probably prefer.
While ad sales will fund the new Fox network, all the revenue generated by Fox Studios-produced series will go to whatever company winds up owning them after a merger. That new owner will have little sentimental attachment to these series, so their continued survival will likely come down almost entirely to whether or not they can continue to pull their weight. Series like The Gifted, which includes Marvel characters, could also survive, should Disney be the one to make the final purchase.
Alrighty then. So, wait, you said something about Hulu before?
This might actually be one of the biggest takeaways for TV fans. Currently, both Disney and Comcast (through NBCUniversal) own 30 percent shares in Hulu. Fox owns 30 percent as well; Time Warner, which just merged with AT&T, owns the other 10 percent. So if Disney or Comcast acquires Fox, Hulu will, for the first time, have a single majority shareholder. It’s possible that the other companies that own stakes in Hulu could even sell off their shares, granting one company complete control.
This is significant because Hulu is a serious domestic competitor for Netflix in the realm of licensed content. There’s such a wide variety of TV offerings on Hulu in part because so many companies own an equal share in it, so all of them have an equal incentive to stream their shows there. Should one company come to own a larger share, that could change—and the days of finding most of the TV series currently airing on a single Internet home could be over. That said, Hulu could also expand with a different selection of series; should Disney make the deal, Bob Iger plans to expand the platform as a hub for mature, prestige-y content—perhaps offering a logical destination for FX chief John Landgraf to lend his legendary programming talents, should he be interested in such a role. An expanded Hulu would not replace Disney’s plan for its own streaming platform, which would house its more youth-oriented blockbusters.
What about movies?
Film rights might be one of the most attractive things about this deal for Disney, which already owns Marvel. Right now, Fox is sitting on several hot comic book properties, including Deadpool, X-Men, and Fantastic Four. Marvel chief Kevin Feige has already said that he’d love to have the X-Men come play in his Marvel Studios sandbox—and given the franchise’s box office mojo, it stands to reason that Disney’s execs like that idea as well.
Apart from its comics properties, Fox also has a pretty impressive library of blockbusters in its inventory, including the Alien, Avatar, and Planet of the Apes franchises. Let’s face it: Avatar was basically Pocahontas with blue people, so Disney would probably love to own it as well. (Hell, there’s already an Avatar Land inside of Disney World, so James Cameron’s opus would fit right in.) Plus, the deal would give Disney ownership of all the Star Wars films, as well as an awards-friendly film arm in Fox Searchlight, which is likely appealing for a company that mostly produces the kinds of blockbusters that tend to get overlooked in the major Oscar categories.
Comcast, like anybody else, can appreciate good blockbuster potential as well—and with Universal’s Dark Universe franchise basically dead in the water, that company’s film arm could probably use an infusion of franchise gas. (Jurassic World and Fast films notwithstanding.) Another fun wrinkle? It’s actually NBCUniversal that owns the theme park rights for The Simpsons, so even if Disney makes this deal, Homer and the family will not be crashing Disney World any time soon.
But no matter what happens, Rupert Murdoch is still going to be filthy rich, right?
Oh, yeah. Filthier and richer than either of us can imagine, my friend.