Walt Disney Company To Buy Much Of 21st Century Fox

Dec 14, 2017
Originally published on December 14, 2017 9:45 pm
Copyright 2017 NPR. To see more, visit http://www.npr.org/.

ROBERT SIEGEL, HOST:

The Walt Disney Company said this morning it had struck a deal to acquire most of 21st Century Fox controlled by the Murdoch family. The deal includes Fox's television and movie studios, regional sports networks and satellite TV properties. The takeover will not include Fox News. NPR's David Folkenflik now brings us the backstory, a deal driven by fear of the digital future, succession questions and Murdoch's desire to cash out at the top.

DAVID FOLKENFLIK, BYLINE: Under the same roof you'd see a company whose defining figure is Mickey Mouse...

UNIDENTIFIED ACTOR: (As Mickey Mouse) Oh, I'm so excited.

FOLKENFLIK: ...With Fox's Homer Simpson...

(SOUNDBITE OF TV SHOW, "THE SIMPSONS")

DAN CASTELLANETA: (As Homer Simpson, burping).

FOLKENFLIK: ...And Fox's "Star Wars" with, well, the rest of the "Star Wars" franchise held by Disney's Lucasfilms (ph)...

(SOUNDBITE OF JOHN WILLIAMS' "STAR WARS THEME")

FOLKENFLIK: ...As Disney girds for a battle royal with new combatants. Think Netflix and Amazon and soon Apple for content, Google and Facebook for ads. Robert Iger is Disney's chairman and CEO. He spoke on "Good Morning America," the popular news program for Disney's ABC network.

(SOUNDBITE OF TV SHOW, "GOOD MORNING AMERICA")

ROBERT IGER: Well, I think it's pretty clear today that consumers want access to entertainment, one that is high quality. But two, they want access pretty much anywhere, anytime, anyhow.

FOLKENFLIK: It's such a big transaction that it's likely to face some serious scrutiny from regulators. The Justice Department filed a legal challenge to the AT&T acquisition of Time Warner which involves the consolidation of fewer direct competitors. Yet Iger was sunny about his chances.

(SOUNDBITE OF TV SHOW, "GOOD MORNING AMERICA")

IGER: This should be viewed as a positive combination from a consumer perspective. And because of that, we think the regulators will - we hope the regulators will look at it kindly.

FOLKENFLIK: Disney would add heft to its own planned streaming services, one in entertainment, the other in sports. And it's getting a controlling stake in the streaming service Hulu. From Fox's end, this deal was driven by three things - first, fear. Rupert Murdoch feared that 21st Century Fox was too small to compete in the age of digital on-demand consumption of TV and movies, an amazing statement when you consider the company is worth more than $60 billion.

(SOUNDBITE OF ARCHIVED RECORDING)

RUPERT MURDOCH: We're seeing that with the emergence of new companies, Silicon Valley is now needing to spend tens and tens of billions on entertainment programming. So it makes sense to bulk up the entertainment side so that we've got a company that can go direct to consumer in a sort of big way.

FOLKENFLIK: That's Rupert Murdoch himself. Like Iger, he was interviewed by one of his own anchors - in his case, Maria Bartiromo of the Fox Business Network. Murdoch is selling his entertainment and satellite properties that have for long stretches underwritten the news operations through which he often wields great political influence. Murdoch and his sons have now fixed on a plan for what is to be called the new Fox based on news, sports and an emphasis of live programming for Fox's broadcast TV network and its two dozen local stations. The second reason is opportunity. With drops in subscribers for cable TV and patrons of conventional movie houses, the Murdochs concluded their assets were at their peak.

And third, it would likely resolve those dynastic struggles. At Fox, the struggle has been between two adult Murdoch sons. Lachlan Murdoch is the company's co-chairman. James Murdoch is its CEO. They're brothers separated by just two years, friends and fierce corporate competitors. This could resolve the question of who would succeed their father. Lachlan would stay at Fox, and James may get a role at Disney. Iger has been without a clear successor there. He announced he would extend his Disney tenure through 2021.

(SOUNDBITE OF TV SHOW, "GOOD MORNING AMERICA")

IGER: James and I will be talking over the next number of months, and he and I will be discussing whether there's a role for him or not at our company.

FOLKENFLIK: At the age of 87, Rupert Murdoch appears to be tidying up his accounts. He still holds onto his news and sports enterprises along with his newspapers in the U.S., the U.K. and Australia under the sister company News Corp. Yet the sale represents an incredible U-turn. Murdoch's story has been one of almost ceaseless expansion over six and a half decades with major holdings on five continents. On a big day, the mouse roared, and Fox beat a retreat. David Folkenflik, NPR News.

(SOUNDBITE OF GEORGE FIELDS' "EPHEMERAL") Transcript provided by NPR, Copyright NPR.