TMC
02-20-2023, 05:47 AM
https://www.yahoo.com/news/7-000-job-cuts-disney-150017368.html?.tsrc=fp_deeplink
Will history judge Walt Disney Co.'s $71.3-billion purchase of 21st Century Fox a success?
Or will the 2019 acquisition turn out to be Disney Chief Executive Bob Iger's biggest blunder?
Activist investor Nelson Peltz's excoriation of Iger's decision to load up on content for the streaming wars by buying Rupert Murdoch's TV and movie studios and other entertainment assets has touched off a spirited debate.
Peltz, through his Trian Fund Management, accused Disney executives of exhibiting "poor judgment" by "materially overpaying for the Fox assets." Earlier this month, his firm ended its proxy fight against Disney.
But the hangover from the Fox deal has come into sharp focus this month in light of Iger's dramatic plan to cut costs by $5.5 billion, including eliminating 7,000 jobs. It is among the largest reductions in the history of the storied entertainment company, which cut thousands of jobs following the Fox deal.
Buying Murdoch's studios undoubtedly allowed Disney to scoop up valuable franchises, including television's longest-running scripted show, "The Simpsons," as well as film juggernaut "Avatar," giving Disney a slice of the $2.2 billion in global box office receipts from "Avatar: The Way of Water." Disney also picked up the original "Star Wars" film as well as "X-Men," "Fantastic Four" and "Deadpool," allowing those characters to join Disney's Marvel Cinematic Universe.
The National Geographic and FX cable channels also came with the deal, along with proven TV industry leaders.
All have been instrumental in beefing up Disney's content pipeline.
But some critics on Wall Street argue the acquisition, and integrating the Fox staff and operations into Disney, distracted the Burbank entertainment giant from its core mission of creating high-quality family entertainment.
Cowen & Co. media analyst Doug Creutz was never sold on the Fox deal and now partially blames it for Disney's current troubles, which include managing an even larger portfolio of declining linear cable TV channels and absorbing billion-dollar losses as the company builds not one but four streaming services to compete with Netflix, Amazon Prime Video and others.
In addition to Disney+, Disney operates ESPN+ and Hulu as well as the Disney+ Hotstar streaming service in India.
"Even without Fox, Disney would still be struggling with linear channels and figuring out how to make streaming profitable," said Creutz. "But they'd be in a much better position, financially, without all of this debt sitting on their balance sheet. And they would not have needed as big of a reorganization."
Disney declined to comment for this story.
This story originally appeared in Los Angeles Times (https://www.latimes.com/entertainment-arts/business/story/2023-02-18/disney-fox-purchase-iger-murdoch-analysis).
Will history judge Walt Disney Co.'s $71.3-billion purchase of 21st Century Fox a success?
Or will the 2019 acquisition turn out to be Disney Chief Executive Bob Iger's biggest blunder?
Activist investor Nelson Peltz's excoriation of Iger's decision to load up on content for the streaming wars by buying Rupert Murdoch's TV and movie studios and other entertainment assets has touched off a spirited debate.
Peltz, through his Trian Fund Management, accused Disney executives of exhibiting "poor judgment" by "materially overpaying for the Fox assets." Earlier this month, his firm ended its proxy fight against Disney.
But the hangover from the Fox deal has come into sharp focus this month in light of Iger's dramatic plan to cut costs by $5.5 billion, including eliminating 7,000 jobs. It is among the largest reductions in the history of the storied entertainment company, which cut thousands of jobs following the Fox deal.
Buying Murdoch's studios undoubtedly allowed Disney to scoop up valuable franchises, including television's longest-running scripted show, "The Simpsons," as well as film juggernaut "Avatar," giving Disney a slice of the $2.2 billion in global box office receipts from "Avatar: The Way of Water." Disney also picked up the original "Star Wars" film as well as "X-Men," "Fantastic Four" and "Deadpool," allowing those characters to join Disney's Marvel Cinematic Universe.
The National Geographic and FX cable channels also came with the deal, along with proven TV industry leaders.
All have been instrumental in beefing up Disney's content pipeline.
But some critics on Wall Street argue the acquisition, and integrating the Fox staff and operations into Disney, distracted the Burbank entertainment giant from its core mission of creating high-quality family entertainment.
Cowen & Co. media analyst Doug Creutz was never sold on the Fox deal and now partially blames it for Disney's current troubles, which include managing an even larger portfolio of declining linear cable TV channels and absorbing billion-dollar losses as the company builds not one but four streaming services to compete with Netflix, Amazon Prime Video and others.
In addition to Disney+, Disney operates ESPN+ and Hulu as well as the Disney+ Hotstar streaming service in India.
"Even without Fox, Disney would still be struggling with linear channels and figuring out how to make streaming profitable," said Creutz. "But they'd be in a much better position, financially, without all of this debt sitting on their balance sheet. And they would not have needed as big of a reorganization."
Disney declined to comment for this story.
This story originally appeared in Los Angeles Times (https://www.latimes.com/entertainment-arts/business/story/2023-02-18/disney-fox-purchase-iger-murdoch-analysis).