Disney Will Pay $2.5 Billion If Fox Deal is Blocked

Fox Properties and Disney

Should the Fox/Disney deal be blocked, Disney would have to pay a $2.5 billion breakup fee. The biggest media merger in years finally became a reality this week, when the Walt Disney Company agreed to purchase much of the film and TV assets of 21st Century Fox for $52.4 billion. While many observers of the movie world are approaching the deal in terms of what it means for future X-Men/MCU crossovers, the effects are much bigger than that, from the combination of two of studios that go back to the beginning of Hollywood, to the changing of hands of a staggering amount of major intellectual properties to the change in the composition of the ownership of Hulu to what it means for Disney’s streaming service plans.

The deal, which leaves Fox News, sports assets, and the Fox studio lot itself in the hands of the Murdoch family, is expected to take 18 months to close, as it is subject to regulatory approval by governments in the U.S. and abroad, including the European Union. So what happens if the Disney/Fox deal doesn’t gain that approval? This is written into the deal.

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Disney has agreed to pay a $2.5 billion breakup fee to Fox, in the event that the merger is blocked by government regulators, Variety reported Thursday. The two sides have also each agreed to pay the other $1.52 billion in the event one side pulls out of the merger voluntarily, for any reason other than a forced regulatory block.

Why would the deal be blocked? The Justice Department occasionally blocks major corporate mergers for antitrust reasons, while political pressure is often brought to bear against such deals. In a similar situation, the department sued to prevent the pending merger in which AT&T was to acquire Time Warner. Media consolidation is an issue of much concern for many, and the Disney/Fox deal certainly would lead to the consolidation of many things.

Among the properties included in the transaction are the rights to X-Men, Fantastic Four, and James Cameron's burgeoning Avatar franchise (among several others), so there's certainly a lot at play here. It will be interesting to see what becomes of the deal, but fans will likely have to wait a while before it's officially closed. This means those dreams of The Avengers crossing paths with the X-Men won't be happening anytime soon, but you can bet Kevin Feige and company have big plans in store for when the time comes.

MORE: Disney Should Reboot the X-Men For the MCU

Source: Variety

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