What Did Disney Buy From Fox?
Back in August, when Disney (NYSE: DIS) announced that it would cut ties with Netflix and launch its own streaming business to compete in digital content, etc… Wall Street crushed it.
After all, it was exactly what Disney needed to do.
At the time, August 25th, Disney’s dividend was about 1.7%. The P/E ratio was about 16. The stock had listed sideways for about 3 years, in a price band from $90-120.
Meanwhile, in the prior year, 2016, Disney was the first studio to take in more than $7 billion at the box office globally with is proprietary content.
Rogue One, Captain America: Civil War, Finding Dory and The Jungle Book, generated record business for Disney showing off the strength of each of its assets, Lucasfilm, Marvel, Pixar and Disney, respectively.
Now Disney has more awesome content. Indeed, its titles are unparalleled when viewed through the lens of a purely streaming, digital entertainment future.
What Did Disney Own Prior to Fox acquisition?
Look at the entertainment assets Disney now controls, both before and after the Fox acquisition. Before the Fox acquisition, Disney’s assets included:
- Disney’s Entertainment (From Cinderella to Mickey Mouse, etc.)
- ABC (A&E Television, Fusion Media Network, Lifetime, etc.)
- ESPN (ESPN.com, ESPN Plus, ESPN Radio, etc.)
- Lucasfilm (Star Wars, Indiana Jones, etc.)
- Marvel Entertainment (Spider-Man, X-Men, Wolverine, Deadpool, Captain America, and more than 5,000 additional comic book characters, etc.)
- Pixar (The Incredibles, Monsters Inc., Finding Nemo, etc.)
- Hulu (30% stake)
- Walt Disney Parks & Resorts
What Does Disney Own Now After Acquiring Fox?
- 20th Century Fox (film, cable entertainment networks and international TV businesses)
- Classics including: the original Star Wars, Miracle on 34th Street, Alien, Titanic, Avatar, The Grapes of Wrath, Planet of the Apes, The Sound of Music, etc.)
- Fox Television Studio (The Simpsons, Empire, etc.)
- FX, National Geographic, Fox Searchlight
- Modern Family, Homeland, This is Us, etc.
- Hulu (60% majority stake – from 30% prior to acquisition)
- The Handmaid’s Tale, etc.
- 22 Regional Sports Cable Networks
- YES Network (Yankees games)
- Star India TV
- Sky Plc. (UK)
What Did Fox Keep in the Disney Acquisition?
Disney did not buy the Fox News Channel, Fox Sports or the Fox Business Network.
Disney’s Coming Digital Streaming Options
All signs point to pervasive digital content streaming merged with augmented reality and virtual reality. These innovations are cutting edge now, but will become commonplace in the next few years. As a result, the lines between fantasy and reality, and passive entertainment and fully immersive entertainment will be blurred considerably.
Forget Amazon. Forget Netflix. Forget Apple.
Disney has the best content lineup of any company in the world now. With Fox, the company did exactly what it needed to do to get the job done.
In the coming year, Disney will roll out a series of streaming offerings that will offer exclusive access to Disney’s characters, Marvel, Lucasfilm, Pixar, etc.
Streaming Sports Needs Fixing
As someone who recently became a cord cutter (killing my Comcast cable subscription and moving to a 100% Internet connection for streaming, etc.) I can say the only problem I have now is not being able to watch life NFL games on tv. I tried getting a digital antenna for my TV, but I can’t get a single channel where I am for free.
Disney could combine ESPN with Fox’s other sports offerings, such as YES Network, to provide better offerings for local sports fans.
The Ultimate End Game
Fast forward 10 years… What will the media and Silicon Valley tech giant landscape look like?
Given what we know about where digital content is going t begs the question… Will Apple buy Disney?
Given that Apple generates about $70,000 of earnings per minute… Apple is about the only company that could. For cash.