Thousands of layoffs seen after Disney acquires Fox

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Thousands of layoffs seen after Disney acquires Fox

Disney and 21st Century Fox entered into a consent decree with the U.S. Department of Justice previous year under which Disney will divest 21st Century Fox's Regional Sports Networks. Twenty-First Century Fox Inc has a 12 month low of $38.00 and a 12 month high of $41.95.

So, Disney now owns Fox's film and TV studio, both the FX networks, National Geographic, Indian TV giant Star India, and about 60% ownership of the streaming service Hulu. But with the movie and television studios coming under control of Disney, numerous broadcast networks from Fox are remaining their own entity, including the national network FOX.

Earlier on Tuesday, 21st Century Fox completed the separation of assets that are moving to Disney and those that will comprise the foundation of Fox Corporation, which began trading on the Nasdaq as a standalone entity on Tuesday morning.

The deal additionally makes Disney the proprietor of Tata Sky and Endemol Shine Group.

The newly spun-off media company, which will house assets including Fox News Channel and Fox Broadcast Network, is expected to bring in around $10 billion in annual revenue.

Disney also acquires Fox's 30 percent stake in Hulu, giving it majority control.

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Less safe is the Fox-made X-Men chapter New Mutants, helmed by Josh Boone, which, though still now working towards an August release date, is being described as "troubled", according to THR.

To win the blessing of regulators, Disney agreed to sell 22 Fox regional sports networks in the U.S., its half of the A&E channels in Europe and Fox's sports network in Brazil. The new assets should strengthen Disney's position as a content behemoth, especially as it launches Disney+ later this year, its own streaming competitor to Netflix.

It's perhaps unsurprising, considering that the two movies released by Fox so far, Deadpool and Deadpool 2, made $783 million and $785 million respectively, but Disney boss Bob Iger keen to make more R-rated Deadpool sequels. Of course, whether Disney will eventually phase out Fox properties that do not fit with their particularly family-friendly image remains to be seen.

MoffettNathanson analyst Michael Nathanson said Disney will likely see expanded operating income impact in 2020 due to the loss of licensing revenue as the company redirects its big films to Disney+. In addition, Disney will also gain full distribution rights to the original 1977 Star Wars film, just months before the franchise will release its latest entry, the J.J. Abrams-helmed Star Wars: Episode IX.

Wall Street analysts Barron's have cited Netflix's commitment to overseas markets as a key driver of its longevity.

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