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Disney Could Control 40% of Box Office if Fox Deal Goes Through

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After receiving antitrust approval from the U.S. Justice Department, new analysis suggests that Disney could hold as much as 40 percent of the domestic box office should their bid for 21st Century Fox's movie and TV assets go through. The proposed deal is worth more than $71 billion, and would make the company that already owns Pixar, Marvel, and Star Wars even more dominant than it already is.

While Walt Disney Studios has already seen its films take the top three spots of 2018, so far, with Black Panther, Avengers: Infinity War, and Incredibles 2, the addition of Fox’s assets would give the company access to other highly popular franchises like Deadpool, X-Men, Avatar, and Fantastic Four – not to mention the more prestige films of Fox Searchlight, which has won three of the last five Academy Awards for Best Picture. The high-value takeover seems in line with recent moves by Disney, which fully acquired Pixar for $7.4 billion, Lucasfilm for $4 billion, and Marvel Entertainment for $4 billion, all within the past 12 years.

Related: Fox Shareholder Files Lawsuit To Prevent Disney Acquisition

A report from CNNMoney shows that Disney and Fox together would control nearly half of the 2018 domestic box office, but this would probably sink closer to 40% by the end of the year based on remaining releases. For a little perspective, while studios like Universal Pictures, Paramount Pictures, Warner Bros., and Sony Pictures appear to be on a similar playing field, only Warner Bros.’ parent company TimeWarner and NBC/Universal would post double-digit box office shares (16% and 15%, respectively) over a 5-year average in which Disney and Fox are a single company. As recently as 2010, the top of the box office was much more spread out, with 5 studios receiving double-digit market share and Warner Bros. and Paramount topping the charts. However, just last year, Disney and Fox combined would’ve controlled about 35% of the domestic box office.

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If the deal is approved as it currently stands, the impact on the industry would be far-reaching – both economically and creatively. Disney would immediately gain greater leverage of the supply chain, including in ticket receipt negotiations with theaters where it has already shown considerable might. While a studio generally takes somewhere between 40-55% of each ticket sale, Disney took about 65% of sales from theaters for Star Wars: The Last Jedi and required the film play for at least four weeks in the theater’s main auditorium. (For comparison, Disney took 64% of ticket revenue and required two weeks of top placement for Star Wars: The Force Awakens.) Creatively, taking control of Fox Searchlight would allow Disney to continue churning out blockbuster sequels and superhero films with its main properties while gaining access to a well-oiled production and distribution arm that has a knack for critical and award success, with past triumphs including 12 Years a Slave, Birdman, The Shape of Water, and Three Billboards Outside Ebbing, Missouri, among many others.

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The full impact of this merger will hinge upon Disney’s production intentions. Will the number of movies released each year shrink once a major studio has technically disappeared? Possibly, but it could also lead to smaller studios teaming up or becoming more creative in the way they utilize production budgets - something that has happened in the past - which could lead the industry in an interesting direction. It will also be important to note the streaming aspect, as a Disney-Fox merger could potentially be a way for Disney to take on giants like Netflix and Amazon with a reduced financial risk. In either case, the movie landscape will never be the same.

More: Netflix Estimated To Spend $12-13 Billion In 2018 - More Than Any Film Studio

Source: CNNMoney

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