Disney acquiring Fox means big, scary things for film and TV

Disney acquiring Fox means big, scary things for film and TV

Here are five reasons the deal is terrifying — and only one of them is increased media consolidation.

It’s official: Disney has acquired the film and television arms of 21st Century Fox for $52.4 billion.

Assuming regulators allow the deal to go through (it’s expected to take at least a year to close), Disney will own the rights to everything from the Avatar movies to FX’s The Americans. Fox, meanwhile, maintains the rights to Fox News, the Fox broadcast network, Fox Sports 1, and the gigantic Fox studio lot in Los Angeles. One of the six core studios that make up Hollywood has effectively been gobbled up by another, the biggest deal of its kind in decades (probably since the 1955 dissolution of RKO, since by the time MGM finally disappeared, it had been ailing for decades, unlike Fox). Variety marks it as the second-biggest merger ever after AOL-Time Warner.

Much casual interest in the sale has been driven by the fact that Disney will now own the film rights to the Marvel comics characters associated with the X-Men and Fantastic Four, which Marvel sold off to Fox long before either was a Disney subsidiary. (Marvel still doesn’t entirely own film rights to the Hulk — solo Hulk movies have to be produced with Universal, which is probably part of why there haven’t been any recently.) But Disney also now owns the rights to a bunch of other well-known cultural properties, including The Simpsons, the Alien franchise, and Alvin and the Chipmunks.

Considering that Disney has proved so capable at turning beloved cultural properties into blandly effective hit-producing machines, there are a handful of reasons to be at least cautiously anticipatory about what it might do with all of its new toys.

But for the most part, this deal is a little terrifying. There are myriad reasons, but here are five that are most distressing to me — and only one of them is the incredibly troubling march of further media consolidation!

1) It’s entirely possible the Fox TV network will slowly wither away

One of the assets Disney couldn’t buy from Fox was its broadcast network of the same name, home to everything from The Simpsons to New Girl to The X-Files. The network launched in 1986 and was largely seen as a folly, but by the mid-’90s, it was a mainstay in most American homes, breaking the hegemony of the big three networks, ABC, CBS, and NBC.

Federal Communications Commission regulations state that no one company can own more than one broadcast network, and Disney already owns ABC. This would be fine if Rupert Murdoch and News Corp were simply going to keep running the Fox network as it’s been run until now. But in 2017, there are essentially only two ways to make money as a broadcast network: make it a home for programming already owned by the network’s sister studio (meaning ABC airs mostly programming made by ABC Studios or other Disney sister companies), or make it a home for ridiculously cheap programming (meaning reality shows and news). So it seems unlikely they’ll stay the course, even though early reporting suggests Fox TV will exist much as is for now (though scripted product is expected to decline).

Fox, in essence, can’t pursue option one. If the deal goes through, all of Fox Television’s other assets — including its studio and attached cable networks, of which FX is the most prominent — will belong to Disney. And while there are a few programs on the network that are money-printing machines and will thus continue for at least a little while (The Simpsons and Family Guy chief among them), and a few other programs that it’s in Disney’s best interests to keep going (like the Marvel co-production The Gifted), there’s no reason for the Fox TV network to keep airing almost everything on its lineup if it won’t be collecting revenue from those shows via other means, like international sales or streaming sales. (Broadcast networks make almost all of their money from selling advertising space, a shrinking market in an era of ratings diminishment; essentially every other revenue stream is funneled toward the studios that produce TV shows.)

Now, there are ways that Fox could largely continue as-is. Disney could cut it a huge deal to carry many of those old Fox shows cheaply, figuring that they’re worth more to Disney as part of a huge streaming library and, thus, worth losing a lot of money on for a while. It’s also theoretically possible that Fox could sell off its TV network to another major studio that produces its own TV but doesn’t have a natural home for all of it (in essence, Sony or Warner Bros.). It could even become a glorified CW, should a studio like Sony team up with another player to share the cost of the network. (The CW is a joint venture between CBS and Warner Bros.)

But consider this: One of the key reasons to invest in the Fox network is that it holds NFL rights to broadcast NFC games, as well as the Super Bowl every third year. While NFL ratings have slipped, they’re still by far the biggest game in town, and if Fox really is refocusing on news and sports, letting NFL rights slip away wouldn’t make a lot of sense. And when you further consider that Fox has a longstanding relationship with (and share of) the reality TV producer Endemol Shine, it seems all the more likely that the network will continue to exist but mostly become a clearinghouse for reality programming, sports, and news content. This evolution, barring a sale to a different studio, seems inevitable. The network will still be Fox, but essentially a halfhearted version of itself.

Disney announces it has reached a deal to acquire 21st Century Fox, as predicted by a Simpsons episode that first aired on November 8, 1998. pic.twitter.com/kzloJQHeM8

— Darren Rovell (@darrenrovell) December 14, 2017

2) Hulu will almost certainly become a Disney property

The Handmaid’s Tale

One of the things keeping Hulu from truly taking on Netflix and Amazon for streaming network superiority has been its strange ownership situation, in which it is owned in part by Fox, Disney, NBCUniversal (an investor in Vox Media), and Warner Bros. When Fox sells its 30 percent share of Hulu to Disney in this deal, Disney will become the majority shareholder in Hulu. It remains to be seen if NBC will sell off its 30 percent stake, or Warner Bros. its 10 percent stake, but I think such a deal is likely.

Disney has been looking for a streaming platform with which it can strike back at Netflix. It made noise about creating its own platform, but just buying Hulu outright makes a certain sense. Hulu, after all, is already built and simply needs to go international. (Currently, Hulu is only available in the US.) And considering that Disney will now control the considerable TV library of Fox — as well as the smaller but still impressive Disney TV library — it will have a substantially advantageous position to turn Hulu into the Netflix competitor. (Disney is still said to be looking at building streaming platforms for sports programming, and then for its Marvel and Star Wars properties, but it’s also easy to imagine these proposed services becoming pricey Hulu add-ons.)

There are a handful of exciting things about this from the point of view of TV fans, like the idea of better integration between Hulu and FX, for instance. But one of the things that’s made Hulu work is its unstable ownership situation, which has essentially given the service access to almost all of the good TV, with packages that allow you to include even more TV networks to your Hulu bundle as add-ons. That’s led to a neither-fish-nor-fowl problem here and there for Hulu, but it’s also led to a massive library of TV shows, as well as the first drama series Emmy for a streaming service with The Handmaid’s Tale. It would be a shame to see that turned into another arm of the Disney monolith.

3) Wherever Rupert Murdoch ends up, he’ll have $52 billion more to play around with

The real wild card in this deal is what happens to Rupert Murdoch. He and his family now own 5 percent of Disney and will hold seats on the company’s board of directors. But Murdoch, by most accounts, has always preferred the worlds of news and sports to the world of movies and scripted TV.

The important thing is this: Murdoch has long wanted to take Fox News international, previously via a furtive, aborted attempt to port the model to the UK. The jury’s out on whether he can actually accomplish this (the network may simply be too wedded to the US Republican Party in the eyes of overseas viewers), but it’s not as if socially conservative, jingoistic nationalism can’t gain a foothold in other countries. One hitch in this is that Fox sold off many of its international TV assets in the Disney deal. Yet if any media platform can figure out a way to make that work, Fox News seems as likely as anybody else.

Couple that with the Fox broadcast network’s need for cheap programming (which would likely include news programming) and Fox Sports 1’s inability to get out of the shadow of Disney-owned ESPN, and you have what amounts to a company that exists largely to keep the Fox News business humming along. (News Corp, of course, still owns a number of print publications, including the New York Post and the Wall Street Journal.)

Of my five points, this is by far the most speculative. To be sure, it’s unlikely this will happen overnight, and it might take as long as a decade or two. But the successful future of the Murdoch empire is now tied largely to the successful expansion of Fox News. And the most likely path to chart leads out of the US and overseas.

4) 20th Century Fox and Fox Searchlight at least tried making films for adults. They now belong to a company only interested in making blockbusters.

Tom Hanks as Ben Bradlee and Meryl Streep as Kay Graham in The Post
Niko Tavernise/Twentieth Century Fox

The Post is one of several Oscar-friendly films Fox released this year.

This is, in comparison to most of these other points, ultimately a somewhat minor concern. But it’s true that Disney doesn’t make many movies per year, and those movies are almost always aimed at the blockbuster audience — which is to say families and young men in their early 20s and late teens. Disney is, in a real way, in the blockbuster business, making lots of Marvel, Star Wars, and animated films while rarely straining for much more.

Consider, for instance, that the studio is pumping a lot of money into an Oscar campaign for its Beauty and the Beast live-action remake because it … doesn’t have much else (though the strong reviews for the latest Star Wars film may give it another competitor). In contrast, Fox has many of the year’s most Oscar-friendly films, with two released under its Fox Searchlight banner, The Shape of Water and Three Billboards Outside Ebbing, Missouri, and one from Fox proper, The Post, combining for 19 Golden Globe nominations just this week. Add in scattered nominations for the studio’s Battle of the Sexes, The Greatest Showman, and Ferdinand and Fox’s total rises to 27 nominations in total.

This isn’t a one-off, either. Fox Searchlight is fairly consistently in the Oscar hunt, and 20th Century Fox might not win awards as consistently, but it still continues to produce films aimed at adult audiences, like the surprise success Murder on the Orient Express or the less successful The Mountain Between Us.

Fox certainly tries to play the blockbuster game, but most of its major franchises, from X-Men to Planet of the Apes, have seen stronger box office returns in the past. While it might be worth it to Disney to get the X-Men and Fantastic Four back in the Marvel fold, Fox itself doesn’t bring a ton of great franchise assets to the table (though the Avatar sequels, slated to begin arriving in 2021, are a huge wild card in this equation). And though Oscars may not be incredibly important to Disney, it’s not as if the company wouldn’t like to win a Best Picture trophy someday (remarkably, a Disney film has never won Best Picture, though the former Disney subsidiary Miramax won a couple of times), which Fox Searchlight might help with. Indeed, Disney’s early messaging around Fox Searchlight has been largely positive, and it’s expected the division will continue as it has, for the most part.

But in order to not trip up antitrust regulators, it’s most likely Fox itself will have to reduce overall output. (It released 16 movies in 2016 and 13 in 2017.) So will Disney allow Fox to continue making movies aimed at a wide variety of audiences, some hitting and some flopping? Or will it push Fox into the same box as its other subsidiary studios, like Marvel and Pixar, responsible for a certain number of films per year, all of which are expected to set certain box office benchmarks? If that’s the case, then film fans will have lost something.

5) Yeah, media consolidation is bad, and it’s only getting worse with this deal

The quick and obvious take on the Disney-Fox deal is that media consolidation, already bad, is only getting worse. It’s been ages and ages since a major Hollywood studio just … disappeared, and now one that seemed pretty healthy from all evidence has been consumed by a bigger corporation. The big fish are eating each other, and soon there may only be one left.

The standard rebuttal to this concern is that tech companies can come in and “disrupt” the entertainment industry and media and shake things up to create room for new voices. And maybe this will happen! Certainly Netflix has become a Hollywood heavyweight in record time (even if it still struggles to draw interest to its films).

But for the most part, tech companies have built really great aggregators of content that comes from elsewhere. Outside of Netflix’s TV division, there aren’t any real roaring successes out of the tech industry — and you can’t create great art, or even popular art, simply by throwing money at it, something Hollywood knows all too well.

But if Fox is now part of Disney, then it’s hard to imagine that we’re not heading toward a universe where essentially all of the major media providers in the world are owned by three or maybe four companies. And while the most obvious issues with that stem from how media consumers are able to get news that takes on corporate interests, there are a host of others that range from the political to the artistic.

Suffice to say that having one less major studio isn’t a great sign for the health of the American entertainment industry, for the future prospects of film lovers, and for anybody who read the David Mitchell novel Cloud Atlas and recoiled a bit when learning that his futuristic, dystopian society where humans are literal corporate cattle described movies as “Disneys.”