Walt Disney Pictures has come a long way from making full-length animated features like Snow White and the Seven Dwarfs, Cinderella, and Peter Pan. In the 21st century, the company has reinvented itself with live-action blockbusters like Pirates of the Caribbean, state-of-the-art computer animated films like Cars and Frozen, and adaptations of children’s literary classics like Roald Dahl’s The BFG and Madeleine L’Engle’s A Wrinkle in Time (out in theaters this March). In recent years, Disney has expanded into more lucrative markets like comic book blockbusters (ie. Marvel comics) and, of course, the Star Wars franchise. The latest Star Wars entry, The Last Jedi, hit the $1 billion mark in worldwide box office sales barely three weeks after its US theatrical release. With a plethora of material to work with, and plenty of money coming in, one would think Disney is far passed its tipping point, but that might not be the case at all.
Just before The Last Jedi hit theaters in December, Disney announced it is acquiring Twentieth Century Fox‘s film and television studios from Rupert Murdoch for a mind-blowing $52 billion. That means that, in addition to popular film and TV franchises like Alien and The Simpsons, Disney now also holds the majority of controlling interest in Hulu, outbidding Comcast and Time Warner Cable. Indeed the only portions of Twentieth Century Fox that Disney did not acquire in the landmark deal are the Fox broadcasting properties, Fox News, Fox Sports, and Fox Business channels. The deal would top Disney’s $3.96 billion acquisition of Marvel in 2009. Disney also acquired Pixar Animation in 2006, as well as properties like Industrial Light & Magic, Skywalker Sound, and LucasArts in its deal with George Lucas. All this means that the Disney corporation owns and controls a substantial portion of the cable-broadcasting industry, but will the deal with Murdoch and Fox be approved?
Moves to monopolize companies in the cable-broadcasting industry have been met with harsh criticism in recent years, and rightfully so. AT&T’s bid to purchase Time Warner Cable for $85 billion hit a snag when the Department of Justice filed a lawsuit to stop the merger back in November. A Federal judge is scheduled to preside over the trial in March. Additionally, many are speculating as to whether or not the DOJ will move to expand the “consent decree” Comcast was issued by the FCC following its acquisition of NBCUniversal in 2011, which is set to expire this year. At the time, Comcast released a statement assuring customers they were, and had already planned on making changes to their billing statements, although they did insist the issue was simply clerical and not criminally intentional.
Despite the possibility that Disney’s Fox acquisition is just a good business move and hardly criminally intended, the question remains as to whether or not it’s a legal one. Antitrust laws, which forbid monopolies and ensure fair trade, are regulated by groups like the Federal Trade Commission (FTC), The Federal Communications Commission (FCC), and of course, the DOJ. AT&T faced litigation by the Attorney General in 1974 and was forced to split into seven different companies, five of which have merged back with AT&T, and two which remain top competitors: Verizon and Qwest. If regulators allow the current merger, AT&T will also acquire control of HBO and DirecTV, making it a top contender with Disney, who is also prepping its own streaming service for 2019 to compete with Netflix and Amazon Prime. The bottom line is, we may be seeing cable rate hikes in the near future, so prepare yourselves.