Acquisition of 21st Century Fox by Disney

## History

### Early information (November 2017–April 2018)

On November 6, 2017, CNBC reported The Walt Disney Company was negotiating a deal with Rupert Murdoch to acquire 21st Century Fox's filmed entertainment, cable entertainment, and direct broadcast satellite divisions, including 20th Century Fox, FX Networks, and National Geographic Partners. The deal would reportedly exclude the Fox Broadcasting Company, 20th Century Fox's studio lot, Fox Television Stations, Fox News Group, and Fox Sports, which would be spun off into a new independent company run by the Murdoch family. According to Disney's CEO Bob Iger, the idea of purchasing Fox's assets came after Disney acquired majority control of the streaming company BAMTech with anticipation to develop its own streaming service (which would eventually be called Disney+, launched in November 2019). Disney was less interested in Fox's production capacities and more keen to acquire Fox's own film and television libraries to help expand the streaming service's library.

The deal would also include film rights to certain franchises owned by Fox, such as X-Men and Fantastic Four, the distribution rights to *Star Wars: Episode IV – A New Hope* (which were not owned by Marvel Studios and Lucasfilm respectively when Disney acquired the two companies). Talks had stalled for the day without a deal being finalized, but it was reported on November 10 that the prospected deal had yet to be fully abandoned.

On November 16, it was reported that Comcast (parent company of NBCUniversal), Verizon Communications, and Sony (parent company of Columbia Pictures) had also joined Disney in a bidding war for 21st Century Fox. During a recent shareholders meeting, 21st Century Fox Co-Chairman Lachlan Murdoch said Fox was not in the category of "sub-scale" companies that were "finding it difficult to leverage their positions in new and emerging video platforms", but was instead a company that had "the required scale to continue to both execute on our aggressive growth strategy and deliver significant increased returns to shareholders".

Because Disney owns the American Broadcasting Company (ABC), Comcast owns the National Broadcasting Company (NBC), and 21st Century Fox owned the Fox Broadcasting Company, a full acquisition of Fox by Disney or Comcast would have been illegal under the Federal Communications Commission (FCC)'s rules prohibiting a merger between any of two of the four major broadcast networks.

On November 28, while mentioning a rumor that the rumored negotiations between Disney and Fox were progressing at a rapid pace, Mike Fleming Jr. of *Deadline Hollywood* commented, "given how Disney made the Marvel and Lucasfilm deals under the cone of silence, if this happens we'll probably only know it when it's announced. It is certainly being talked about today."

Rumors of a nearing deal continued on December 5, with additional reports suggesting the FSN regional sports networks would be included in the sale (assets that would likely be aligned with Disney's ESPNdivision).

On December 11, Comcast announced it was dropping its bid on the Fox assets. On December 14, Disney and Fox confirmed a $52.4 billion deal to merge the two companies, pending approval from the United States Department of Justice Antitrust Division.

In February, CNBC reported that, despite the Disney–Fox deal, Comcast might take action to outbid Disney's $52.4 billion offer, if the AT&T–Time Warner merger went through. Despite this, Fox President Peter Rice stated he was content with the Disney offer and that the Fox assets were "a great fit for Disney."

Early in March, the non-profit group Protect Democracy Project Inc. filed a lawsuit against the United States Department of Justice (DOJ) on the hopes to seek any records of communications between the two groups over Disney's pending acquisition of Fox. The lawsuit also sought "any related antitrust enforcement efforts by the DOJ, to find out whether the president or his administration is improperly interfering with the independence of the DOJ out of favoritism for a political ally." Donald Trump congratulated Murdoch for the Disney–Fox deal while attacking AT&T's acquisition of Time Warner, particularly over the ownership of CNN, which he frequently criticized due to alleged bias.

On April 12, 2018, Rice revealed the acquisition was expected to close by summer 2019. Beginning in March 2018, a strategic reorganization of the Disney conglomerate saw the creation of two business segments, Disney Parks, Experiences and Products and Walt Disney Direct-to-Consumer & International. Parks & Consumer Products was primarily a merger of Parks & Resorts and Consumer Products & Interactive Media, while Direct-to-Consumer & International took over for Disney International and global sales, distribution, and streaming units from Disney–ABC Television Group, Studio Entertainment, and Disney Digital Network. Given that Iger described it as "strategically positioning our businesses for the future", *The New York Times* considered the reorganization done in expectation of the 21st Century Fox purchase.

### Bidding war between Disney and Comcast (May–July 2018)

On May 7, 2018, it was reported that Comcast spoke to investment banks about topping Disney's offer to acquire Fox. Shortly afterwards, Bob Iger stated he was willing to drop Sky plc from the deal to ensure the Fox acquisition.

Several Fox investors said they would be open to terminate the company's agreement with Disney if Comcast followed through on its plan to launch a rival all-cash bid for $60 billion. Murdoch's family trust controlled 39% of Fox due to shares it held with special voting rights. However, under the company's by-law, those special rights did not apply to a vote on the Disney/Fox deal when the Murdoch trust only controlled 17% of the vote, making it easier for other shareholders to defeat him, which was expected as early as next month. Later that month, it was confirmed that Lachlan Murdoch, rather than James Murdoch, would take charge of the New Fox company.

The following week, Comcast publicly announced it was looking into making an all-cash counter-offer for the Fox assets that Disney proposed to acquire. Shortly after, it was reported that Disney was looking into making its own all-cash counter-offer for Fox assets if Comcast went through with their offer.

The next day, Disney and Fox announced they had set their shareholder vote meetings for July 10, although both said Fox's meeting could be postponed if Comcast came through with their offer.

On June 12, AT&T was given approval by District Judge Richard J. Leon to acquire Time Warner, easing concerns Comcast had regarding whether government regulators would block their bid for Fox. Consequently, the next day, Comcast mounted a bid of $65 billion for the 21st Century Fox assets that were set to be acquired by Disney.

On June 18, it was reported that Disney will add to its already existing $52 billion claim to contest Comcast's proposed counter-offer for the Fox assets.

On June 20, Disney and Fox announced they had amended their previous merger agreement, upping Disney's offer to $71.3 billion (a 10% premium over Comcast's $65 billion offer), while also offering shareholders the option of receiving cash instead of stock. On June 21, Murdoch said in response to Disney's higher offer: "We are extremely proud of the businesses we have built at 21st Century Fox, and firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace at a dynamic time for our industry." That still does not prevent other companies from making a bid, as the deal was needed to be voted on by shareholders.

Iger explained the reasoning behind the bid: "Direct-to-consumer distribution has actually become an even more compelling proposition in the six months since we announced the deal. There has just been not only a tremendous amount of development in that space, but clearly the consumer is voting—loudly."

On June 27, the United States Department of Justice gave antitrust approval to Disney under the condition of selling Fox's 22 regional sports channels within 90 days of closing, to which the company has agreed. The next day, Disney and Fox boards scheduled July 27, 2018 as the day shareholders vote on Fox's properties being sold to Disney.

On July 9, a Fox shareholder filed a lawsuit to stop the acquisition from Disney citing the absence of financial projections for Hulu. On the same day, CNBC reported Comcast was looking for companies that could take over Fox's Regional Sports Networks. The shareholder claimed that would've made Comcast's antitrust problems regarding the takeover of Fox assets easier as Comcast was preparing to make a new all cash counter-offer before July 27, 2018.

On July 12, the Department of Justice filed a notice of appeal with the D.C. Circuit to reverse the District Court's approval for AT&T acquisition of Time Warner (now WarnerMedia). Analysts said the chances of the DOJ win are small, but would be the "final nail in the coffin for Comcast's Fox chase. This is a clear gift to Disney." On the next day, CEO of AT&T Randall L. Stephenson gave an interview with CNBC, about Comcast's bid for Fox: "It probably can't help it. You're in a situation where two entities are bidding for an asset, and this kind of action can obviously influence the outcome of those actions."

On July 13, Disney received the support of the Institutional Shareholder Services and Glass Lewis, the two most prominent proxy adviser firms in the world. Fox shareholders were recommended by the advisers as means to provide for Disney's future.

On July 16, CNBC reported Comcast was unlikely to continue its bidding war with Disney to acquire Fox. Instead, Comcast is likely to continue pursuing 61% stake of Sky.

On July 19, Comcast officially announced it was dropping its bid on the Fox assets in order to focus on its bid for Sky. The CEO of Comcast, Brian L. Roberts, said "I'd like to congratulate Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company."

### Road to completion (July 2018–March 2019)

On July 25, 2018, TCI Fund Management, the second largest shareholder of 21st Century Fox, indicated it voted to approve the Disney–Fox deal. On July 27, Disney and Fox shareholders approved the merger between the two companies.

There were reports on August 9 that Viacom CEO Bob Bakish wants to license its TV ad targeting tech to the entire industry, starting with Fox. On August 12, the Competition Commission of India approved the Disney–Fox deal.

On September 17, the European Commission scheduled a merger review for October 19, which was later postponed to November 6.

On October 5, Disney announced the commencement of exchange offers and consent solicitations for 21st Century Fox.

On October 10, it was reported that the new, post-merger organizational structure of "New Fox" would be implemented by January 1, 2019, ahead of the closure of the Disney sale (which is still expected to occur during the first half of 2019).

On October 15, Disney offered a list of concessions to the European Commission, which extended the review deadline to November 6. The European Commission on November 6, 2018 cleared the sale, pursuant to the divestment of certain factual television networks in Europe owned by the Disney/Hearst joint venture A&E Networks, including Blaze, Crime & Investigation, History, H2, and Lifetime. Disney will continue to be a 50 percent owner of A&E everywhere outside of the European Economic Area.

On November 19, China's regulators approved the Disney–Fox deal, without any conditions. After obtaining approval from Chinese regulators, Disney said it still needed to obtain regulatory approval from several other regulators, though the approvals from the United States, European Union, and China were considered the most important hurdles to clear.

On December 3, Brazil's Administrative Council for Economic Defense (CADE) said the deal would concentrate the market of cable sports channels. CADE recommended remedial measures.

By December 14, the merger was subjected to regulation in Mexico, where Disney/Fox would account for 27.8% of content distribution across all genres. Disney would own 73% of all sports channels in Mexico. On January 31, Mexico's Federal Commission of Economic Competition (COFECE) approved the Disney–Fox deal after Disney agreed to sell its stake in Walt Disney Studios Sony Pictures Releasing de México, a Mexican film distributor, to Sony Pictures Entertainment Motion Picture Group.

On January 7, 2019, the registration statement for "New Fox", under the name Fox Corporation, was filed with the U.S. Securities and Exchange Commission.

On January 11, it was reported that the deal is expected to close by either February or March 2019. However, on January 30, in a SEC filing by Disney, it was reported that the deal is expected to close by June 2019.

Bob Iger met with Brazil's antitrust regulator CADE on February 12, 2019 to discuss the Disney–Fox deal. However, a decision on the deal still could not be reached. However, on February 20, Bloomberg said CADE will make its ruling on the Disney–Fox deal on February 27, 2019. On February 21, Bloomberg reported Disney will divest Fox Sports in Brazil and Mexico to get approval in these countries. The two countries are among the last major hurdles for the Disney–Fox deal. On February 27, Brazil's antitrust agency CADE approved the merger with conditions requiring Disney to divest Fox Sports Brazil among other measures. The regulator said it coordinated with regulators in Mexico and Chile in evaluating the transaction. Brazil's approval clears one of the final hurdles, allowing the deal to be completed in March.

On March 4, The Walt Disney Company tweaked Robert Iger's compensation package he would receive upon closing the Disney–Fox deal, removing $13.5 million in potential salary and incentive awards available for the chief executive after the company closes its acquisition of 21st Century Fox Inc. assets.

Mexico's telecom regulator, Federal Telecommunications Institute (IFT), approved the deal on March 11, 2019 under the condition that Disney and Fox agree to sell Fox Sports in the country within six months. They also had to keep the National Geographic brand separate from its A&E channels. This cleared the last major holdout on the deal. On March 12, 2019 Disney announced it was set to close the Fox deal on March 20.

Fox Corporation officially became a standalone, publicly traded company, separate from 21st Century Fox, on March 19, 2019 making Fox Corporation the owner of the assets that were not acquired by Disney. The announcement also included appointment of the board of directors. Also on March 19, 21st Century Fox officially completed distribution of new Fox shares ahead of the completion of the Disney deal.The deal was officially completed on March 20, 2019.

### At acquisition (October 2018–March 2019)

Disney announced on October 8, 2018, 21st Century Fox's top television executives would join the company, including Peter Rice, Gary Knell, John Landgraf, and Dana Walden. Rice will serve as Chairman of Walt Disney Television and Co-Chair of Disney Media Networks, succeeding Ben Sherwood while Walden is to be named Chairman of Disney Television Studios and ABC Entertainment. Disney announced on March 5, 2019 Craig Hunegs would lead the combined TV operations at Disney Television Studios once the Disney–Fox deal closes. Hunegs will be president of the subsidiary, with oversight of all operations, including ABC Studios, ABC Signature, 20th Century Fox Television and Fox 21 TV studios. He'll report to Dana Walden, chairman of Fox Television Group who will be chairman of Disney Television Studios and ABC Entertainment.

On October 18, 2018, Disney announced a new organizational structure for the Walt Disney Studios and the individual unit heads who would join the company except for Fox's filmed entertainment CEO Stacey Snider, including Emma Watts, Fox 2000 President of Production Elizabeth Gabler, Fox Searchlight Pictures Chairmen Nancy Utley and Stephen Gilula. Watts who currently serves as Vice Chairman and President of production at 20th Century Fox will continue in that post. All Fox film production units would report to Walt Disney Studios Chairman Alan Horn except for Fox Family and 20th Century Fox Animation reporting to Watts and Horn. By March 22, 2019, Fox Family only reports to Watts while Fox Animation reporting only to Horn.

On December 13, 2018, Disney announced a new organizational structure for its international operations and the individuals who would join the company, including Jan Koeoppen and Uday Shankar. Shankar who currently serves as Chairman and President Fox Networks Group Asia and Star India will lead Disney's Asian operations and will become the new Chairman of Disney India.

### Post-acquisition (March 2019–present)

It was reported on March 21, 2019 that Disney would shut down the Fox 2000 Pictures studio in 2020, following the release of *The Woman in the Window*. On the same day it was reported that up to 4,000 people would lose their jobs as Disney commenced layoffs following the merger. The top executives given two to six months notice of being laid off include 20th Century Fox film president of domestic distribution Chris Aronson, president of worldwide marketing Pamela Levine, co-president of marketing Kevin Campbell, chief content officer Tony Sella, international distribution president Andrew Cripps, executive vice president of corporate communications Dan Berger, executive vice president of legal affairs and executive vice president of Fox Stage productions Bob Cohen and executive vice president of publicity Heather Phillips, 20th Television president Greg Meidel and Fox Consumer Products boss Jim Fielding. The layoffs from Fox's Film Division continued from March, May, June, July and more recently in August 2019. As of July 31, 2019, the layoff totaled 250 with the lay off of several dozen employees in the production and visual effects departments with key Fox executives in this group were executive VP of feature production Fred Baron, executive VP of physical production Dana Belcastro, executive VP of post-production Fred Chandler and visual effects John Kilkenny.

Debmar-Mercury announced on April 3 that it would end its national ad sales partnership with 20th Television, and that they will transfer their national ad sales for their first-run and off-network shows by the company to CBS Television Distribution Media Sales. Disney's ESPN unit acquired on April 10 a package of rights to the Big 12 Conference in college athletics that had previously been held by Fox. On April 15, 2019, Hulu acquired AT&T's 9.5% stake in Hulu for $1.43 billion, with Disney and NBCUniversal co-owning the share.

Disney announced on April 24, 2019 that it had canceled a number of upcoming Fox films such as *Mouse Guard*, *News of the World* (whose rights were then picked up by Universal Pictures), and an adaptation of Angie Thomas' *On the Come Up* (whose rights were then moved to Paramount Players), and that some projects, such as *The King's Man*, *Fear Street*, and Steven Spielberg's remake of *West Side Story*, were still in production. On May 7, Disney announced a revised release schedule for several Disney and Fox films. Among the changes, several films (*Artemis Fowl*, *Ad Astra*, *Spies in Disguise*, *The New Mutants*, and *Call of the Wild*), were moved to later release dates. All the Fox Marvel films previously scheduled for release after 2019 were removed from the schedule. *Avatar 2* was rescheduled from 2020 to a 2021 Christmas release, after which *Avatar* sequels will be released every other Christmas holiday release, alternating with *Star Wars* sequels through 2027.

On April 25, 2019, Shannon Ryan, who was previously Fox Television chief marketing officer, was made president of marketing for ABC Entertainment and Disney Television Studios, she will report directly to Karey Burke, president of ABC Entertainment, and Craig Hunegs, president of Disney Television Studios.

Sinclair Broadcast Group agreed on April 26, 2019 to acquire Fox Sports Networks (excluding YES Network, being sold separately to Yankee Global Enterprises) from Disney for $10 billion. On May 14, 2019, Disney announced it had assumed control of Hulu as part of a put/call agreement with Comcast and its 33% stake in the service. Comcast will continue to license NBCUniversal content and live carriage of NBCUniversal channels until late 2024 and their stake in Hulu could be sold to Disney as early as January of that year. In addition, both companies will fund Hulu's purchase of AT&T's 9.5% stake in Hulu.

Following the acquisition, Disney reorganized its television division to align various operations. On June 10, 2019, Disney announced that both Disney Television Studios and FX Entertainment would share the same casting division. On July 31, 2019, Disney reorganized Hulu's reporting structure, placing Hulu's Scripted Originals team under Walt Disney Television. Under the new structure, Hulu's SVP of Original Scripted Content would report directly to the chairman of Disney Television Studios and ABC Entertainment.

Fox Stage Productions on July 3, 2019 was moved into Disney Theatrical Group as Buena Vista Theatrical division with all top executives leaving at that time. On August 1, 2019, Disney announced that the Fox Research Library will be folded into the Walt Disney Archives and Disney Imagineering Archives by January 2020.

On August 7, 2019, Disney announced that they would overhaul Fox film projects in development except *Avatar*, *Planet of the Apes* and *Kingsman* sequels due to *Dark Phoenix* causing a third-quarter loss. A new reduced slate of about 10 films per year fully overseen by Disney will now be the main focus, with 20th Century Fox making half of the movies for Hulu and Disney+. Fox properties such as *Home Alone*, *Night at the Museum*, and *Diary of a Wimpy Kid* have been assigned for Disney+ release and assigned to Fox Family.

On August 9, 2019, the *Los Angeles Times* reported that Disney would be pulling all Fox film library titles out of all theater chains and moving them onto either Hulu or Disney+. Little Theatre, a local theater chain in Rochester, New York, was forced to cancel their August 5 screening of *Fight Club* after Disney notified the theater that it was not allowed to screen the film in the future.

On August 22, 2019, Sinclair completed its acquisition of Fox Sports Networks from Disney. Seven days later, the Yankees/Sinclair/Amazon consortium also completed the acquisition of the 80% share of YES Network from Disney on August 29, 2019 with the Yankees owning 65%, Sinclair owning 20% and Amazon owning the remaining 15%.

On September 10, 2019, Disney announced their plans to sell the video game division of FoxNext, preferring to license its properties for video games rather than develop them.

On October 22, 2019, the Banijay Group announced its intent to acquire Endemol Shine Group from Disney and Apollo Global Management for $2.2 billion. Disney and Apollo agreed to sell Endemol to Banijay on October 26, 2019, pending antitrust approval from regulators. On July 3, 2020, Banijay completed its purchase of Endemol Shine.

On October 24, *Vulture* reported that Disney was limiting theatrical exhibitions of Fox's older films, with several theaters and film programmers reporting that Fox's back catalogue was no longer available to them.

In January 2020, Disney began to rebrand Fox's studios to remove references to "Fox" from their names, with 20th Century Fox being renamed "20th Century Studios", and Fox Searchlight Pictures being renamed "Searchlight Pictures".

On January 22, 2020, Disney announced it had sold off a majority of FoxNext's assets, including FoxNext Games Los Angeles, Cold Iron Studios, Aftershock development studios and FoxNext's original IP's, to mobile game developer Scopely. On January 24, 2020, Disney announced they would shutter Fogbank Entertainment.

On January 31, 2020, Disney eliminated the role of Hulu CEO, as part of fully integrating Hulu with Disney's business model. Under the new structure, top Hulu executives would report directly to DTCI and Walt Disney Television leads.

On March 17, 2020 *The Wall Street Journal* reported that Disney is looking to sell TrueX due to lack of investment after being label a noncore asset.

On May 6, 2020 Brazil's antitrust agency CADE approved the merger between Fox Sports Brazil and ESPN Brasil. with conditions requiring Disney to keep Fox Sports Brazil until January 1, 2022, when the channel's operations are expected to be absorbed into ESPN. In the meantime, ESPN and Fox Sports will share the rights to broadcasting sporting events.

On August 10, 2020, Disney announced a reorganization and rebranding of its television studios, with 20th Century Fox Television being subsumed by 20th Television, and Fox 21 Television Studios being rebranded as Touchstone Television (reviving a name dropped in 2007 by what then became ABC Studios — which itself was renamed ABC Signature).

On September 28, 2020, Disney announced that it had sold TrueX to Gimbal, Inc.