When Disney announced it was essentially buying the production assets of Fox, the deal was already an insane amount of money, $52 billion in stock and Disney taking $14 billion in debt off Fox’s hands for a total cost of $66 billion, roughly 1,100,000 teacher’s salaries. Then Comcast crashed the party with a $65 billion all-cash bid. So Disney is upping its bid.
According to CNN, Disney’s new deal is both worth more, at $71 billion, and has a wrinkle that might make life harder for Comcast: Fox stockholders can either take Disney stock for their Fox shares, or just cash out completely. It’s not a one-to-one split: Roughly every four Fox shares would get you one Disney share. But, hey, Disney’s riding high.
This makes life hard for Comcast, which is already borrowing extravagantly and would become one of the most indebted companies in the world if it bought Fox. But for Disney, there’s the question of how they’ll ever make this money back.
The Disney/Fox deal doesn’t quite make sense from a production perspective. Fox is the home of Deadpool, The Simpsons, and Family Guy; it’s not like they can open Quagmire’s Cove in Disneyland. And Disney is buying Fox’s movie and TV divisions, but the whole reason Fox is considering the sale is the movie division is struggling, and the only way owning a television production arm makes sense, these days, is if you’ve got broadcast and cable networks to put your shows on, which Disney already does. That’s why you keep seeing “ABC Studios” credited on Marvel’s Netflix shows. And this was before Fox’s showrunners started walking away from the company over Fox News’ coverage of the current family separation crisis at the border.
Sure, you can argue Disney’s made good deals before, and they have. But picking up Lucasfilm and Marvel for $4 billion each, and which fit into Disney’s approach to entertainment and which have already paid for themselves just at the box office, is one thing. Buying back Deadpool and the X-Men and getting Aliens and the Predator thrown in along with it for $71 billion is something else, and Disney may want to think hard about what it’s really getting for the money.