Disney’s absorption of Fox may have been a bad deal, as per a new report. Disney announced that they would acquire 21st Century Fox in late 2017, ultimately finalizing the deal in 2019. The Fox deal cost Disney $71 billion at the time. This rocked the film industry at the time, given that Fox was previously a dominant studio. After absorbing Fox, Disney now had the rights over a plethora of additional blockbusters, including James Cameron’s smash hit Avatar: The Way of Water.
Now, a new report reveals that Disney’s absorption of Fox may not have been such a positive step for the media giant after all. According to The Wrap, the original intention of Disney’s purchase of Fox was to elevate Disney’s hold in blockbuster content made for adult audiences, such as the revived Planet of the Apes trilogy. This did not pan out, for viewers ended up electing streaming platforms over theatrical releases soon into 2019 and 2020, especially as the pandemic hit.
This was a particular challenge for Fox films that were expected to make big, for in 2019, 21st Century Fox and Fox Searchlight comprised only $1.6 billion of Disney’s overall $12.6 billion profit. To date, Disney is still in $45 billion of debt from their Fox deal. The Wrap also claims that this has led to Disney essentially “burying” Fox. That is, Disney’s Fox deal has resulted in the platform essentially ignoring the majority of Fox content, instead pouring its energy into only those blockbuster Fox picks.
What This Means for Disney
When CEO Bob Iger closed the deal back in 2019, he surely did not expect Disney to make its $71 billion investment back immediately. Those returns take time. As The Wrap lays out, however, Disney’s progress toward a profit in the Fox deal has been slow. Films like Avatar: The Way of Water, which has grossed over $2 billion at the box office, help elevate the chances of Fox’s success, but ultimately eat away at the $45 billion in debt slowly, if Disney is to continue to neglect to invest in Fox the same way that they do other absorbing franchises. The Wrap also referenced Free Guy which, despite boasting an impressive over $331 million, did very little to chip away at Disney’s Fox debt.
Ultimately, Disney’s Fox deal will probably not jeopardize the platform in any long-term sense. In the last two decades or so, Disney has rapidly expanded. Disney has absorbed other major studios, including Pixar, Lucasfilm, and Marvel. The Marvel deal has been particularly successful for Disney, as the Marvel Cinematic Universe (MCU) films have been raking in box office revenue for over a decade. With so much of its energy poured into those MCU films, however, Disney could neglect Fox more in the process. This could create a self-perpetuating cycle, where the Fox loss gets worse as Disney focuses their attention away from them.
Upcoming 20th Century Studios (Formerly Fox) Films for Disney
Disney does have some huge Fox films coming down the pike, however. Avatar: The Way of Water’s success likely confirms a spot for Avatar 3, Avatar 4, and Avatar 5, which will likely see similar box office success. Fox, now 20th Century Studios, upcoming work also includes the Taika Waititi film Next Goal Wins, and Gareth Edwards’ (Rogue One) True Love. The success of films like these could make or break the legacy of Disney’s Fox deal.
Source: The Wrap