It could be a year or more until Disney's acquisition of Fox is finalized, but the deal is already having an impact on Fox operations. While Marvel fans may be delighted by the prospect of finally seeing The Avengers team up with the X-Men and/or the Fantastic Four on the big screen, the real-world implications of the buyout aren't exactly light-hearted fun. Fox is expected to be significantly downsized, and between the two studios there are thousands of job losses expected. Moreover, with Fox's future currently uncertain, it's becoming difficult to make plans for future movies without knowing how (or if) they will ultimately fit into Disney's plans.
All told, the process of Disney acquiring Fox - including both movies and certain portions of Fox's television operations - will take at least a year and a half. The planned deal was first announced at the end of 2017, and then had to await approval from the Department of Justice, which it received in June 2018. Currently, The Walt Disney Company is still awaiting similar approvals from foreign regulatory bodies before it can start hashing out the final details of the $71.3 billion acquisition, which probably won't wrap up until next summer. Amid all of this, Fox has had to carry on operations as it marches towards an uncertain future - and that uncertain future has already had an impact on the company.
It's Difficult For Fox To Buy New Films
According to The Wall Street Journal, the uncertainty over 20th Century Fox's future is leaving Fox out of the loop when it comes to acquiring certain new projects. The Dwayne Johnson-led action comedy Red Notice was shopped to studios earlier this year, ultimately landing at Legendary Pictures, but reportedly the team avoided pitching the movie to Fox. One sales agent explained, "People are making an effort to include [Fox] out of respect, but it's not anyone's first choice because you don't know what the studio is going to be."
Curently, 20th Century Fox is one of the "Big Six" studios in Hollywood, and is divided into a number of different branches, including Fox Searchlight (which produces lower-budgeted and prestige pictures with Oscars potential, like The Shape of Water and Jackie) and Fox 2000 (the unit behind Paper Towns and Love, Simon). The Wall Street Journal highlights those last two as divisions that are likely to survive the buyout, and Disney CEO Bob Iger has specifically promised to keep Searchlight as it is, telling shareholders in March:
“We have every intention, once the acquisition is approved, to maintain the business of Fox Searchlight. We think they’re in the business of making high quality films, recognised often by the Academy and all the Oscars that they’ve won. And we think there’s ample opportunity for us as a company to continue to support those efforts.”
However, the fate of 20th Century Fox itself is less certain. While Searchlight has its own successful niche, there's an element of redundancy to having an entirely separate studio under the Disney umbrella making the kind of four-quadrant tentpole movies that Disney is already known for. Fox's new parent company could well decide to simply fold 20th Century Fox's assets into its own collection and dissolve the studio, so producers are understandably reluctant to pitch movies to a studio that may not even exist this time next year.
Fox Employees Are Already Leaving For New Jobs
Whether 20th Century Fox continues to exist after the deal or not, one thing is certain: there will be layoffs, potentially numbering in the thousands. In a guest column for The Hollywood Reporter, one LA-based Fox employee described a "palpable fear" at the company following the announcement of Disney's acquisition plans in November last year. "We had no definitive information, only gossip and innuendo," writes THR's source. "We were told to stay the course, conduct ourselves professionally and proceed as if it was business as usual."
However, by the start of 2018, many Fox employees were already looking for new jobs, rather than waiting to compete against everyone else after the inevitable mass layoffs. The columnist notes that many are making the move to Netflix ("This has been easy pickings for them"), a direct competitor of Hulu, one of the assets that Disney will have majority ownership of after the deal (Fox owns a 30% stake in Hulu). Hulu itself will likely undergo a radical change after the acquisition, since Disney has been making plans to launch its own streaming service. Hulu could ultimately be used a launching pad for Disney's service, or simply folded into it, which also creates uncertainty for Hulu's current employees.
One major company acquiring another rarely happens without casualties. After Disney acquired Lucasfilm in 2012, dozens of employees were laid off from Lucasfilm and LucasArts, creating a ripple effect that led to layoffs at Industrial Light and Magic as well. It's going to be a rough year for Fox, and we can only hope that those employees who are departing are able to land on their feet.