It’s been rumored that there were talks between Disney and Fox about combining the two entertainment giants into one massive studio entity. The deal could potentially bring the Fantastic Four and X-Men into the Marvel Cinematic Universe, make Pandora – The World of Avatar a legitimate Disney IP, and finally give us re-issues of the original unaltered Star Wars trilogy. And that’s in addition to decades worth of movies and TV released under the Fox brand.
Shortly after the news broke, it was said that the talks were effectively dead and the deal was off the table.
But according to Mark Hughes at Forbes, the talks are still active and a deal is very likely.
So, what makes this deal a good idea for both sides, and why do I think a deal is still likely despite the fact the studios supposedly stopped negotiating? Let’s look at the basic facts, and what they tell us about the necessity of an eventual deal for both Disney and Fox.
Fox doesn’t feel they can achieve the scale necessary for longterm competitiveness in the global digital age, against so many better-positioned competitors who enjoy multiple key advantages. Instead, the studio wants to streamline their company into a news and sports enterprise, so they need to sell the film and TV divisions.
Basically, it’s strength in numbers. The digital age sees many traditional studios taking a massive hit in revenue (as evidenced by this year’s lackluster box office) and upstarts like Netflix, Hulu and Amazon generating more and more original television content.
Disney is practically betting the farm on their new streaming service, and adding Fox content to the mix could prove to be very lucrative for them. It would also block Fox content from appearing on rival Netflix.
Fox, on the other hand, might be looking to cut their losses on their film division to focus on news and sports broadcasting.
There have been boycotts and other movements applying pressure to various advertisers on several Fox programs, as well. Putting more money and resources into improving the position of their news division, creating new expanded programming and new avenues for outreach, and restructuring the leadership is not just a longterm goal, it’s becoming an immediate necessity. Doing so organically within the context of a fully developed plan for a streamlined, news-and-sports media company requires moving ahead with negotiations and getting a deal in place to sell off the other divisions and assets.
According to Hughes, the deal makes entirely too much sense for both parties, and we could see a return to the negotiating table very soon.