What Exactly Would Happen if Disney Buys Fox?

Talks have reportedly resumed between the two companies about a potential sale.

Disney Buying Fox
Disney is back in the hunt for Fox. FREDERICK M. BROWN/AFP/Getty Images

In early November, it was reported that Disney was looking to purchase important film and TV assets from Fox, though talks were said to have stalled. Now, however, we may be getting closer to a massive sale that would shake up the entire entertainment media industry.

Both the Wall Street Journal and the New York Times reported over the weekend that talks between Disney and 20th Century FOX (FOXA) have resumed. The deal would reportedly see Disney acquire Fox’s TV and film studios, in addition to Fox’s stake in U.K. TV provider Sky and a handful of domestic cable properties. The Murdochs’ Fox TV network, as well as Fox News and Fox Sports, would not be included in the sale, per the reports.

Why does this matter to entertainment consumers? Glad you asked.

Many have speculated that a key motivating factor for Disney in this deal is the upcoming launch of their new streaming services in 2019, with one offering sports content from ESPN, and the other being built on television and film properties from the Mouse House. Disney is even developing a live action Star Wars TV show to help with the latter’s launch. CEO Bob Iger has said previously that the cost of Disney’s streaming platform will be less than Netflix (NFLX) because it will start off with a considerably smaller library of content.

However, an acquisition of major Fox properties would help Disney build out its menu of offerings immediately, putting the service in a better position to compete with fellow streamers such as Netflix, Amazon (AMZN) and Hulu. As more and more companies like Apple (AAPL) and Facebook (META) throw their hats into the streaming ring, content ownership becomes more and more important. IP titles are the name of the game, folks.

Another major development that would result from this deal is the collection of superhero rights. Fox holds the rights for the X-Men and Fantastic Four, while Marvel Studios (of Marvel Cinematic Universe fame) is housed cozily under Disney. Such a deal would allow for the X-Men and other popular characters to be folded into the MCU, which fans have been clamoring for ever since Sony and Marvel agreed to share Spider-Man.

At the same time, there are potential downsides to such a deal. If a sale were to go through, it would lower the amount of major film studios from six to five. Outside of the hard-to-duplicate success of mini major outfits such as A24 and Blumhouse Productions, it’s awfully hard to get movies made for wide audiences without the infrastructure and resources of a big studio.

The homogenization of content is also a major concern. Disney has never released an R-rated film under its main label and it’s hard to see the powers that be over there ever greenlighting a Deadpool or a Logan moving forward. In fact, 20th Century Fox has moved to more adult-skewing film franchises recently (Kingsman, The Predator) as a necessary counterpoint to Disney’s family-friendly content to carve out its own niche in the marketplace. Putting so many titles under one roof runs the risk of distilling the final product or at least making them all look the same. Either way, it’s not an ideal scenario in terms of variety.

There are also legal hurdles to consider. The Justice Department recently moved to sue AT&T to block its acquisition of Time Warner, arguing that the deal would give the former far too much power in terms of distribution and content. Who’s to say the same won’t be applied to a potential Disney-Fox deal?

There are positives and negatives to a potential sale involving these two conglomerates that need to be weighed by the consumers it will effect.

What Exactly Would Happen if Disney Buys Fox?