Disney Closes On Fox, Iger Will Cut Jobs

Walt Disney Co. completed its $71 billion acquisition of 21st Century Fox Inc.’s entertainments assets, and now must get to the task of squeezing out promised cost savings, an effort that will lead to thousands of firings in the film and TV business, according to Bloomberg.

With the deal, Disney takes over a portfolio that includes the 104-year-old 20th Century Fox studio, the FX and National Geographic cable networks, and an additional 30 percent of Hulu, the online video service. To make the deal work financially and support the company’s costly efforts to compete with Netflix Inc., Chief Executive Officer Bob Iger has promised $2 billion in cost savings, a commitment that all but assures epic job cuts.

The deal is one of the most dramatic in the current wave of entertainment-industry mergers, shrinking the number of major Hollywood studios to five from six and putting the irreverent Homer Simpson and “Family Guy” in the same stable of cartoon characters as Mickey Mouse and Donald Duck.

Underscoring the looming human cost, Disney is taking on 15,400 Fox employees, while the smaller new Fox Corp. will keep about 7,000. Last August, executives at Burbank, California-based Disney said they’ll achieve their targeted savings over two years, with the U.S. operations bearing the brunt early on. The Hollywood Reporter said last month that 4,000 jobs will be lost.

Already the largest entertainment company in the world, Disney emerges with more clout to negotiate everything from the fees it gets from cable TV operators to the share of ticket revenue at movie theaters. The sale represents the end of an era for Rupert Murdoch, the 88-year-old media mogul who steered the Fox studio for nearly four decades.

At its heart, the merger marks a huge bet that Iger can establish a direct connection to consumers, sell them multiple monthly subscriptions to watch Disney programs and upend the traditional model in which network owners collect fees for their content from pay-TV operators.

Iger has said he plans to continue to operate 20th Century Fox, Fox Searchlight and other film labels, many of which release the kind of R-rated films that Disney previously stayed away from.

The Fox deal, which was first officially announced in December 2017, led to a bidding war with Comcast Corp. Disney warded off its rival suitor, but had to pay about about 36 percent more for Fox under new terms announced last June. Comcast, meanwhile, won Fox’s stake in the Sky Plc and ultimately took over satellite TV service in Europe.

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.