Disney/21st Century Fox

Definition

The Disney acquisition of 21st Century Fox was a major merger in the entertainment industry, completed in March 2019, where The Walt Disney Company acquired 21st Century Fox's film and television studios, cable entertainment networks, and international assets for $71.3 billion. This acquisition represents a significant consolidation within the media landscape, enhancing Disney's content library and expanding its global reach.

5 Must Know Facts For Your Next Test

1. Disney's acquisition of 21st Century Fox included popular franchises such as X-Men, Avatar, and The Simpsons, significantly bolstering Disney's portfolio.
2. The deal aimed to strengthen Disney's position against rising competition from streaming services like Netflix and Amazon Prime Video.
3. After the acquisition, Disney launched its own streaming service, Disney+, which features content from both Disney and the newly acquired Fox properties.
4. The merger faced scrutiny from regulators due to concerns about market competition but was ultimately approved after modifications.
5. This acquisition was part of a larger trend of consolidation in the media industry, with companies seeking to pool resources and create comprehensive entertainment offerings.

Review Questions

• How did the Disney/21st Century Fox merger impact the competitive landscape of the entertainment industry?
  • The merger between Disney and 21st Century Fox significantly reshaped the entertainment industry by consolidating some of the most valuable assets under one roof. This allowed Disney to expand its content library with franchises that had previously belonged to Fox, thereby increasing its market share and competitive edge against rivals like Netflix and Amazon. The merger not only provided Disney with more content for its streaming service but also set a precedent for further consolidation in the media landscape as companies aimed to compete effectively in an evolving market.
• Evaluate the regulatory challenges faced during the Disney/21st Century Fox merger and their implications for future media mergers.
  • The Disney/21st Century Fox merger encountered regulatory challenges primarily concerning antitrust issues and market competition. Regulators expressed concerns that the consolidation could lead to reduced competition in the media landscape. To address these concerns, Disney agreed to divest certain assets before approval was granted. This scrutiny highlights a growing trend in which future media mergers may face rigorous examination, prompting companies to carefully consider compliance with antitrust laws as they pursue similar consolidation strategies.
• Synthesize how the acquisition of 21st Century Fox by Disney reflects broader trends in corporate strategy within the media industry.
  • The acquisition of 21st Century Fox by Disney reflects broader trends in corporate strategy characterized by aggressive consolidation within the media industry. Companies are increasingly recognizing the need to expand their content offerings and scale to compete in a rapidly evolving digital environment marked by streaming services. This merger exemplifies how traditional media companies are adapting to changing consumer preferences by acquiring established franchises and libraries to enhance their market presence. Such strategies illustrate an overarching goal of creating diversified entertainment ecosystems capable of meeting consumer demands across various platforms.

Related terms

Merger: A merger is a business strategy where two companies combine to form a new entity, often to enhance competitiveness or operational efficiencies.

Content Library: A content library refers to the collection of intellectual property rights that a media company owns, including films, television shows, and characters.

Streaming Wars: The 'Streaming Wars' is a term used to describe the competitive landscape among various streaming services as they vie for subscribers and market share in digital content distribution.