An empire grows. Another shrinks.
In a separate ballroom at the Hilton Hotel in Midtown Manhattan on Friday morning, shareholders in Walt Disney Company and 21st Century Fox met a $ 71.3 billion purchase plan that gives Disney the majority of Rupert Murdoch's media event, significantly changing the entertainment landscape.
Regulators in more than a dozen countries still need to give their approval. But the shareholders' voices gave rise to a six-month corporate competition, led across two continents of Disney and Comcast, for supremacy in the fast-moving media industry. Mr. Murdoch's faith represented a one-in-one-time opportunity to get bulk as a counterattack against the tech giants who have been aggressively moved into Hollywood.
Someone in Hollywood sees the acquisition as a sad end of an era. Disney acknowledges that the future of television and film shows is online and this move can turn a wave of mergers into the film industry, which has not seen significant consolidation since 1935, when the 20th Century Pictures and Fox Film merged to form the 20th Century Fox
Disney's chief executive Robert A. Iger has fired the legacy of this agreement, and in order to control Fox, he had to turn off an aggressive game of Comcast. Mr. Iger and Mr. Murdoch originally agreed on a deal in December. After months of maneuvering, Comcast, the Philadelphia-based cable giant, peaked Disney's original bid in June, but Mr. Iger almost came back with a much higher offer like mixed money and shares. Mr. Murdoch and the Fox Board accepted quickly.
Comcast called it shortly after, and its CEO Brian L. Roberts offered an olive branch of varieties by releasing a statement to congratulate the two companies. Comcast, however, plans to compete in a separate deal against Disney for control of the European TV broadcaster Sky.
As Silicon Valley behemoths like Netflix, Amazon, Apple and Facebook have pushed into the entertainment world and attracted the larger audience, old-guard media companies have responded by trying to secure as much gold-plated content as they can. And Disney, for one, will soon unveil a Netflix-style streaming service to deliver its shows and movies straight to viewers.
"One of the most exciting aspects of our Fox acquisition is that it will allow us to accelerate our direct to consumer strategy," said Mr. Iger when he announced the deal in December. "We believe that creating a direct-to Consumers are crucial to the future of our media companies, and this is our highest priority. "
They Are not The Only One Month Before Disney Closed On Fox, AT & T bought Time Warner, which includes HBO and Warner Bros. film and television studios. CBS and Viacom have come across as if they should combine. Comcast will probably make a game for something else as well as trying to win Sky in Europe. Other studios and networks like Discovery, Sony Entertainment, AMC and Lionsgate are looking for opportunities. Verizon, Dish and Charter can also explore possible mergers.
"Everyone has determined that the future holds both content and distribution," said Craig Moffett, a prolonged media analyst.
At the Disney meeting voted , shareholders clean about one element. Disney's final offer consisted of equally large cash and shares – $ 35.7 billion in cash, 343 million shares – and Disney investors had to approve the issue of these shares. The meeting lasted for nine minutes. Disney said that voters control 68 percent of outstanding shares, which are voted by proxy before the meeting. Of these, 99 percent voted to approve. (There was a one-sided voice for disagreement. When Alan N. Braverman, Secretary General of Disney, opened the word for shareholder commentary, a man raised and muttered: "I think we pay too much.")
Despite the importance of the deal and The dramatic way it played out for many months did not take Mr. Iger and Mr. Murdoch into the shareholders' votes. Mr. Iger was on a previously planned overseas trip, and Mr. Murdoch also decided to hold a commitment in California. Mr. Murdoch's sons, James Murdoch, Fox's CEO and Lachlan, Fox's CEO, also disappeared.
The Fox action meeting took place in a much smaller ballroom at the underground level, with less than 60 people present. The meeting lasted less than 10 minutes. But in the end, a long-standing shareholder, Philip Berman, stood on the microphone and said, "Rupert dream is complete."
The agreement ends with Murdoch's government over an entertainment period he used for six decades. He will become a significant minority shareholder in Disney and will continue to run his remaining businesses, such as Fox News, Fox Broadcasting, FS1 cable and newspapers such as The Wall Street Journal, The New York Post and The Sun in the UK.
"I would like to thank all our leaders and colleagues for their huge contribution to building 21st Century Fox in recent decades," Murdoch said in a statement after the vote.
Lachlan, his eldest son, will be CEO of Murdoch's family's remaining television business, collectively called New Fox. James will not join Disney and will leave his father's company. His plans remain unclear, even though he stands to make more than $ 1 billion in the Disney deal.
Disney must wait for regulatory approval before continuing with the integration plans for 21st Century Fox plans that include significant redundancies. The agreement received surprisingly fast approval from US regulators, but foreign governments must still sign.
Analysts expect Disney to remove these barriers early in 2019.
US antitrust regulators approved the merger on condition that Disney, which already owns ESPN, sells all Fox's 22 regional sports networks, which include channels like Yankees' YES -network. Guggenheim Securities has estimated the value of the chain of around $ 22 billion.
But finding a buyer willing to pay top dollar can be difficult. The regional sports networks are valuable because viewers see games live, which appeals to advertisers. On the back side, the channels already have the command of sky-high fees from cable dealers, which limits future growth.
"While on paper, the assets should be attractive, lack of bidders can run a relatively lower valuation," analyst Doug Creutz. at Cowen and Company, wrote in a July 19 report.
Disney has had some recent setbacks with its existing businesses. Walt Disney Studios released rare vulnerabilities, released two major budget errors – "A Wrinkle in Time" and "Solo: A Star Wars Story" – and forced out his prolonged animation chief John Lasseter after the staff complained about inappropriate workplace behavior. ABC in May suffered from the breakdown of "Roseanne", the biggest hit; Shonda Rhimes, ABC's biggest hit maker, decamped for Netflix.
Disney is expected to replace Ben Sherwood, who heads the Disney ABC Television Group. Fox has a strong list of candidates, including Peter Rice, President of the 21st Century Fox. Mr. Rice is much seen in Hollywood as a possible successor to Mr. Iger. Dana Walden, a CEO of Fox Television Group, can also join the Magic Kingdom. (Mr. Sherwood can have another perch in Disney.)
Mr. Iger said in a statement after the meetings that he was looking forward to "welcoming 21st Century Fox's amazing talent to Disney and eventually integrating our businesses to provide consumers around the world with more appealing content and entertainment options."
The 21st Century Fox Acquisition is Disney's largest and surpasses its acquisition of Capital Cities / ABC in 1995 for $ 19 billion or about $ 31 billion in today's money. The deal, which brought ESPN into the Disney board, drove Disney for two decades. But cable operations are now in decline and Mr. Iger is aiming to relocate Disney as a streaming giant who can compete with titans like Apple and Amazon. Mr. Iger believes that the Fox assets will overload that plan.
However, there is no guarantee that he will withdraw from the glorious task of integrating Fox, which has a drastically different corporate culture.
And the clock is ticking: After retiring several times, Mr. Iger is scheduled to leave at the end of 2021.