A media and entertainment colossus

: the acquisition of 21st Century Fox by The Walt Disney Company

Abstract

The acquisition of 21st Century Fox by The Walt Disney Company was one of the largest in the past years and was subject to a fierce bidding war between Disney and Comcast. Ultimately, Disney won the bidding but the rationale was unclear. It was found that the rising strength of over-the-top content service providers like Netflix are threatening the traditional business of media companies like Disney. Cinema admissions are decreasing and people are turning their backs on Television in the favor of online streaming. Disney tries to mitigate the threat of transforming streamers by entering the direct-to-consumer market with its own service, Disney+. Shortly after the management approved the new strategy, the opportunity of Fox came across and Disney evaluated the transaction with a new perspective. It understood that it could leverage Fox’s brands to strengthen the competitiveness of Disney+, while simultaneously cross monetize the brands within its ecosystem. In addition, Disney’s market power in the traditional business enhances, due to the consolidated market share in the Film and TV segment, giving the company control over vital elements in the value chain. Furthermore, evidence was found that Disney was valuing Fox higher than the market, which provides arguments that it assumes a booming business or expects high monetization capabilities of Fox’s assets. Therefore, the transaction supports Disney’s entry into a new market and strengthens the current market position. Both complement the main goal, the growth of The Walt Disney Company.

Date of Award	24 Jun 2019
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Patrick Gottfried Behr (Supervisor)