Looming Disney takeover casts pall over 21st Century Fox
Makers of edgy, award-winning films and TV shows fear for future under cost-cutting new owner
If the results of this week’s Golden Globe awards are a guide, then 21st Century Fox is on a creative hot streak.
The media company’s Hollywood studio won several awards for Martin McDonagh’s acclaimed film Three Billboards Outside Ebbing, Missouri, including best actress for Frances McDormand. Guillermo del Toro won best director for The Shape of Water which, like Three Billboards, was produced by Fox’s Searchlight label. The winning run extended to television, where Ewan McGregor won best actor in a mini-series for his work in Fargo, which is produced by Fox’s FX channel.
In all, Fox productions won seven Golden Globes on a night that is likely to be a welcome distraction from the unease that has settled over the company since Rupert Murdoch announced the $66bn sale of Fox’s entertainment assets to Walt Disney last month.
Disney expects the deal, which could take up to 18 months to be cleared by regulators, to generate $2bn of savings. While a large chunk of this sum is expected to come from the elimination of duplicative back-office functions, there are fears at Fox that the creative executives responsible for identifying the best material and talent could also be in the line of fire.
Some of these executives will go to Disney, making the switch from the Fox studio lot in Los Angeles’ Century City to Disney’s headquarters in Burbank. But others are likely to be less fortunate. Like Fox, Disney owns a film and television studio and employs people in marketing, content distribution and finance. It will not need to operate two parallel organisations that do the same thing and not everyone will be welcomed by the new owner.
The unease at Fox extends to the big differences in how the two companies approach film and television production. One of Bob Iger’s early moves at Disney in his 12 years as chief executive was to cut the number of films it produced, reorienting its output around family movies. He focused on core brands, such as Pixar, and added Marvel superhero films and a new generation of Star Wars movies from Lucasfilm.
Each of the three brands — alongside Disney’s revitalised animation division, which has scored in recent years with hits such as Frozen — have large, ready-made audiences. The result has been a series of years when Disney has led its peers and broken box-office records.
How will Fox’s movie output and edgy, adult-centred films fit into this template? Its studio makes franchises such as the X-Men series, which is based on Marvel characters and which would fit well with the interconnecting films that make up Disney’s Marvel superhero “universe”. The new Avatar films that James Cameron is producing for Fox will also appeal to Disney: the company is already producing attractions based on the movies for its theme parks. But Fox’s other, more adult-focused output would not initially appear to lend itself to the Disney model.
A solution may lie in the streaming services that Disney is working towards launching. Netflix is now making dozens of movies a year such as Bright, starring Will Smith, which it released through its global streaming service rather than in movie theatres. Given that Disney plans to launch its own streaming service in 2019, it will need original movies and television series to drive interest and subscriptions. Movies produced by Fox would ensure greater diversity in the content Disney can offer.
Hollywood is already buzzing about which Fox executives will make the switch to Disney when the takeover is complete. Dana Walden, chief executive of the Fox Television Group, is apparently being eyed by Disney: she is known at Fox as “the Ryan whisperer” for her close relationship with Ryan Murphy, the prolific producer behind hit Fox shows such as The People v OJ Simpson and Glee. John Landgraf, chief executive of Fox’s FX Networks, is another candidate to shift over, as is Peter Rice, the president of 21st Century Fox and a longtime Murdoch lieutenant.
Ultimately, Mr Iger and his Disney colleagues running the integration of the two companies will decide. Two companies will become one, money will be saved and egos will be dented.
Until then, it must be business as usual for Fox’s movie and television studio. Success at the Globes is unlikely to do much for employees anxious about integration with Disney. As regulators begin to scrutinise the proposed deal, they are in for a long wait.