| | | | | SPECIAL EDITION: THE DISNEY DEAL | | | But first, a late-breaking FCC vote... And scroll down for the day's OTHER huge media story, Arthur Sulzberger's retirement... | | FCC votes to repeal "net neutrality" rules | | The FCC voted 3-2 on party lines just after 1pm ET to repeal Obama-era net neutrality protections. The vote "was briefly interrupted due to a security threat," CNN Tech's Seth Fiegerman reports. Here's CNN.com's page full of live updates from DC...
--> NYT News Alert: "Internet providers will have more power over the web, allowing them to favor certain sites..."
--> State attorneys general are vowing to sue... And Dems in Congress are seeking a congressional solution...
--> CNN's Jose Pagliery tweeted right after the vote: "Here comes the wave of press releases. Telecoms tell me the internet is now 'consumer friendly' again. Consumer protection groups tell me the 'free and open internet' is doomed. What a deep and gaping crevasse..." | | Rupert Murdoch on Sky News just now: "This started with Bob Iger, a friend of mine, sitting at my winery one evening having a couple glasses, just talking about our businesses and the industry generally, the forces of disruption that were happening."
Iger followed up by phone a few weeks later, Murdoch said. What began over wine ended with this photo... and a game-changing Thursday morning announcement... | | | The WSJ's midday headline: "Disney to Acquire Fox Assets in Big Bet on Video Streaming." The paper says it "accelerates Disney's broader expansion into video streaming and television." | | Hadas Gold emails: On an investor conference call this morning, Iger joked that normally, on the release day of a huge movie like "Star Wars: the Last Jedi," he'd be focused on promotion. Instead he was talking about a much bigger deal. Weeks of reports and rumors were remarkably accurate: Disney is buying the TV and movie assets of 21st Century Fox, completely changing the entertainment landscape and Rupert Murdoch's legacy.
It's a deal worth $52.4 billion -- larger than all of Disney's past deals combined. If approved by government regulators, brands like the X-Men, National Geographic and "The Simpsons" will all be part of the House of Mouse... | | Via Gold's story:
-- Disney will own Twentieth Century Fox, Fox Searchlight Pictures, Fox 2000, FX Productions and Fox21... Plus FX, National Geographic, Fox Sports Regional Networks, Fox Networks Group International, Star India...
-- Disney will now have 60% of Hulu...
-- Fox thinks its proposed takeover of Sky (under regulatory review in the U.K. right now) will close before the Disney deal closes, so Disney will also own all of Sky...
-- 21st Century Fox will break off the Fox Broadcasting network and owned stations, Fox News, Fox Biz, FS1, FS2 and Big Ten Network into a newly listed company that will be spun off to its shareholders.
-- Murdoch said on Fox Business that "ideally" those properties will recombine with NewsCorp (which they split from in 2013), but that is years away from happening... | | | Gabriel Sherman just tweeted this: "Trump spoke with Murdoch ahead of Disney deal to make sure Murdoch wasn't selling Fox News, person briefed on the call said." No confirmation/denial from Fox yet. Gold called the White House, and heard this from Raj Shah: "The White House is not involved with pending mergers. I'd refer you to the agencies with jurisdiction." | | | THE DAY'S LEAST SURPRISING TIDBIT... | | | His new retirement date: 2021. Brian Lowry emails: The news that Iger has extended his stay at Disney -- again -- doesn't come as a surprise, and will surely be welcomed by its board, which would like to create an animatronic version and keep him forever. And with good reason: With this capping his deals for Pixar, Marvel and Lucasfilm, it seems pretty fair to say that no executive has ever put together a more astounding string of acquisitions, and with a pretty remarkable track record in terms of having them work out thus far, too... | | -- Carl Quintanilla tweeted: "Iger gets $100m in stock awards, and a bump in base pay, as a result of the Fox deal..."
-- CNNMoney's Paul R. La Monica: "Iger is the undisputed king of Hollywood" | | | Hadas Gold emails: 21CF CEO James Murdoch has no immediate role at Disney. Iger said on the investor call that he'll work closely with James while they integrate the businesses... and will discuss a future for him at the company later down the line. (Translation: We're going to date and then see if we can get married.) | | "Welcome to the family, man!" | | | "Simpsons" exec producer Matt Selman shared this illustration on Twitter: | | | The two companies say the deal will take 12 to 18 months to close. With the DOJ suing to block the AT&T-Time Warner deal right now, no one knows how the government will react to this Big Media move. "In some respects," Disney-Fox will pose "MORE antitrust problems" than AT&T-Time Warner does, CNNMoney's David Goldman wrote last week. | | | Here's the bullish view from Fox's C-suite: "The only big similarity here is big media names and changes," a source says... Despite all the AT&T comparisons, "it is a very different deal in every respect. Most folks who don't follow this closely may not be aware of the sheer power and investment of the new entrants and how that is affecting our space. Content creation is occurring in the most competitive environment in its history. So, consolidation has to be viewed the way consumers are experiencing it." In other words: Netflix and Amazon and Apple and other tech giants are getting bigger and bigger... We have to be allowed to keep up... | | | THE IMPACTS OF THIS DEAL: | | Fox will super-charge Disney's forthcoming streaming service | | Frank Pallotta emails: Imagine finding Luke Skywalker, Captain America, Queen Elsa, the X-Men and the Na'vi of Pandora housed all in one streaming service. That's what a Disney service could look like...
Thursday's deal means that Disney's forthcoming streaming product (launching in 2019) will have an even deeper vault of intellectual property. As much as this deal is about the content that Disney is getting, it's also about the content that Netflix is not getting. Read more from Frank here... | | | -- NYT's Brooks Barnes: This deal is "the biggest counterattack yet from a traditional media company against the tech giants that have aggressively moved into the entertainment business..." | | | Recode's Peter Kafka tweeted: "Buying Fox's local sports business *might* be good for Disney/ESPN, but it won't help the ESPN digital service scheduled for March launch." His story explains: "None of the valuable stuff Fox owns can go into ESPN Plus, for the same reason none of the valuable stuff ESPN owns will be in ESPN Plus --- it's all tied up in pay TV deals, and will be for years to come." (Reminder, Fox Sports and FS1 are staying with the Murdochs...) | | The future of Marvel Studios | | Frank Pallotta emails: What will the deal mean for Marvel Studios? Disney's Marvel didn't own the rights to the comic brand's most beloved team of mutants, the X-Men, or its raunchy antihero, Deadpool. Now the studio will.
-- Quoting Iger: "We're also looking forward to expanding the Marvel cinematic universe to include X-Men, Fantastic Four and Deadpool and reuniting all of the Star Wars movies ever made under one roof, which opens new opportunities for that franchise..." | | | More from Frank Pallotta's story: "Pandora - The World of Avatar" opened at Walt Disney World in May. The massive attraction, which reportedly cost in the range of half a billion dollars, expands on the world James Cameron created in his blockbuster. Cameron is planning multiple sequels over the next decade (although the release dates have been in flux). With Disney absorbing Fox's studio, this could allow a seamless synergy between Disney's new land and the new slate of "Avatar" films... | | | Quoting Hadas Gold and Charles Riley's story: "In the announcement, Disney and Fox said '21st Century Fox remains fully committed to completing the current Sky offer and anticipates that, subject to the necessary regulatory consents, the transaction will close by June 30, 2018.' Disney would then assume full ownership of Sky as long as Fox's transaction is completed before Disney's. If the deal doesn't close, then Disney will retain Fox's current 39 percent stake of Sky 'and we imagine they'll make their own bid for the rest of it,' Murdoch said on Fox Business on Thursday..." | | Concerns about the future of the Fox broadcast network | | | This break-up means that "Fox will be the only broadcast network without a studio to supply its scripted shows," LAT's Stephen Battaglio writes. "That has current and former Fox executives and their competitors wondering what the network will look like — and whether it can have long-term viability." Key graf: "Company insiders have been hearing that the broadcast network will become more dependent on sports events, news programs and unscripted reality series," a/k/a, programming that's most likely to be watched LIVE. (Hey, how about HQ Trivia on TV?) | | "The Simpsons" saw this day coming... | | | This screen grab is from the 1998 episode "When You Dish Upon a Star:" | | Could a higher bidder emerge? | | In the NYT's Dealbook newsletter, Andrew Ross Sorkin writes: "Is the Fox-Disney [deal] really done — or is 21st Century Fox now in play? That's the question this morning among media executives and Wall Street bankers. Could a digital company like Amazon, Google or Apple emerge with a higher bid? Or Verizon or Comcast? Or could some of them team up to buy the assets and split them among themselves? For example, Comcast has always wanted Fox's international assets, while any of the digital players would love to own Fox's content business."
Sorkin notes that the deal "has about a $1.5 billion breakup fee if a higher bid were to emerge. If regulators block the deal, Disney would have to pay about $2.5 billion..." | | "New Fox" in a buying mood? | | | What will remain of 21CF, "New Fox," will likely be a buyer of local television stations, especially now that the FCC is loosening its rules. Alex Weprin flagged this Rupert quote: "We will be in the mood to expand and do other things, and we will have the ability..." | | Questions -- and some answers | | -- "Why now?" CNBC's Alex Sherman offers some theories here...
-- Bloomberg's Christopher Palmeri asks: "How will investors value the remaining Fox business? Those holdings are worth $11 to $12 a share, a person familiar with the matter said this week..."
-- What are Netflix execs thinking right now?
-- Disney is not acquiring the actual Fox studio lot. Palmeri asks: "What becomes of that real estate?" | | | WHAT THIS MOMENT MEANS FOR RUPERT... | | Lowry: "A U-turn" for Murdoch's legacy | | | Brian Lowry writes, in a piece about Murdoch's legacy after the deal: "Rupert Murdoch has always run his companies not only with a buccaneering style, but a clear eye on handing to his children the reins of the huge conglomerates he created out of the newspaper that he inherited. ... Now, however, with the decision to sell much of 21st Century Fox to the Walt Disney Co., Murdoch -- who has cut such a wide path through the entertainment industry -- has left his heirs a considerably smaller legacy." Read the whole piece here... | | Folkenflik: "What a retreat" | | | Murdoch biographer David Folkenflik tweeted: "Can't underscore enough what a retreat this is." I loved the lead to his NPR piece: "Ultimately, it was the Mouse that roared -- and the Fox that beat a retreat from the global stage." He calls it a "stunning turn of events for Murdoch, a reversal of decades of alternately calculated and impulsive expansion of a sprawling media empire that started with a single afternoon paper in a forgotten city on the southern coast of his native Australia..." | | Nocera's take: "Rupert is selling at the high" | | | "Are we retreating? Absolutely not. We are pivoting at a pivotal moment," Rupert told investors. Bloomberg View columnist Joe Nocera reacted with this: "Rupert is selling at the high. Five years from now, he is going to look a lot smarter that Iger, saddled with Fox's legacy assets..." | | | This deal is "also a sign that Murdoch's heart is in the news business. He's happy to give up his seat at Oscars to maintain seat at the White House," NYT's Amy Chozick tweeted. Check out her related piece for the NYT -- "Murdoch is Having His King Lear Moment..." | | It's "Last Jedi" opening day... | | | "Star Wars: The Last Jedi" showings begin at 6pm ET... AMC is adding late-night screenings "due to customer demand..." Deadline is forecasting a $424 million-$440 million opening weekend... | | | EVEN MORE BREAKING NEWS... | | Sulzberger handing over the reins to his son | | It's official: Arthur Sulzberger Jr. is handing the reins of The New York Times Company to his son Arthur Gregg Sulzberger.
Sulzberger Jr. will retire at the end of the month, though he will stay on as chairman of the New York Times Company's board of directors. A.G. will take over on January 1, 2018. You'll recall that A.G. was named deputy publisher last year... So this was a matter of "when," not if... Gabriel Sherman broke the news on Twitter about half an hour before the NYT made the announcement. Here's the write-up by Tom Kludt and me... | | | "I wasn't someone who grew up aspiring to become publisher of The New York Times. But having spent the last eight years of my life here and understanding how important the work being done here everyday is, I can't imagine a more fulfilling or rewarding way to spend my days," A.G. Sulzberger told the NYT's Sydney Ember in an interview... Read more here... | | -- Embattled NPR CEO Jarl Mohn will return from medical leave next month. But his fate is "still up in air pending investigation into his handling of Michael Oreskes harassment allegations," Paul Farhi reports... (Twitter)
-- Business Insider is dropping the "Business" from its name, foreshadowing several brand extensions... (WSJ) | | Smiley speaks out after suspension | | | "Talk show host Tavis Smiley says PBS 'overreacted' when it indefinitely suspended his show after an independent investigation uncovered 'multiple, credible allegations' of misconduct by its host," the AP reports. "In a Facebook post, Smiley says he has never harassed anyone and claimed one relationship the network uncovered was consensual..." | | Chloe interviews Steven Spielberg | | | Chloe Melas emails: Steven Spielberg sat down with me to promote his upcoming film "The Post," and the conversation quickly turned to women's rights and the rampant sexual harassment in Hollywood. He said he was "shocked" but not "surprised" by the recent allegations against powerful Hollywood men. But he also said he's never seen change happen more quickly than in the past few weeks and called it a "national reckoning." Watch and read the interview here... | | | We'll be back this evening at our usual time! See you then... | | | Email brian.stelter@turner.com... I appreciate every message. The feedback helps us craft the next day's newsletter! | | | Get Reliable Sources, a comprehensive summary of the most important media news, delivered to your inbox every afternoon. | | | | | |
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