Disney closes $71 billion deal with Fox for X-Men, Deadpool and The Simpsons

Disney could persuade viewers to sign up and pay for yet another streaming service with the addition of Marvel’s X-Men and Deadpool under its corporate roof. (AP)
Updated 20 March 2019
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Disney closes $71 billion deal with Fox for X-Men, Deadpool and The Simpsons

  • With Fox acquisition, Disney adds Marvel’s X-Men and Deadpool in its pool
  • Disney needs compelling TV shows and movies to persuade viewers to sign up and pay for yet another streaming service

Disney has closed its $71 billion acquisition of Fox’s entertainment business, putting “Cinderella,” “The Simpsons,” “Star Wars” and “Dr. Strange” under one corporate roof.
The deal is likely to shake up the media landscape. Among other things, it paves the way for Disney to launch its streaming service, Disney Plus, due out later this year. It will also likely lead to layoffs in the thousands, thanks to duplication in Fox and Disney film-production staff.
By buying the studios behind “The Simpsons” and X-Men, Disney aims to better compete with technology companies such as Amazon and Netflix for viewers’ attention — and dollars.
Disney needs compelling TV shows and movies to persuade viewers to sign up and pay for yet another streaming service. It already has classic Disney cartoons, “Star Wars,” Pixar, the Muppets and some of the Marvel characters. With Fox, Disney could add Marvel’s X-Men and Deadpool, along with programs shown on such Fox channels as FX Networks and National Geographic. Fox’s productions also include “The Americans,” “This Is Us” and “Modern Family.”
The deal helps Disney further control TV shows and movies from start to finish — from creating the programs to distributing them though television channels, movie theaters, streaming services and other ways people watch entertainment. Disney would get valuable data on customers and their entertainment-viewing habits, which it can then use to sell advertising.
Disney CEO Bob Iger said in an earnings call in February that Disney Plus and other direct-to-consumer businesses are Disney’s “No. 1 priority.”
Cable and telecom companies have been buying the companies that make TV shows and movies to compete in a changing media landscape. Although Internet providers like AT&T and Comcast directly control their customers’ access to the Internet in a way that Amazon, YouTube and Netflix do not, they still face threats as those streaming services gain in popularity.
AT&T bought Time Warner last year for $81 billion and has already launched its own streaming service, Watch TV, with Time Warner channels such as TBS and TNT, among other networks, for $15 a month.
In addition to boosting the Disney streaming service, expected to debut next year, the deal paves the way for Marvel’s X-Men and the Avengers to reunite in future movies. Though Disney owns Marvel Studios, some characters including the X-Men had already been licensed to Fox.
Disney also gets a controlling stake in the existing streaming service Hulu, which it plans to keep operating as a home for more general programming. Family-friendly shows and movies will head to Disney Plus.
No pricing has been disclosed for Disney Plus. The streaming service will feature five categories of material: Disney, Pixar, Marvel, Star Wars and National Geographic. Disney charges $5 a month for ESPN Plus, a service that offers programming distinct from the ESPN cable channel.
Meanwhile, Fox Corp. — the parts of 21st Century Fox that are not part of the deal, including Fox News, Fox Sports and Fox Broadcasting — started trading on the Nasdaq under the “FOX” and “FOXA” tickers on Tuesday.


Boeing abandons 2019 outlook after 737 MAX aircraft groundings

Updated 24 April 2019
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Boeing abandons 2019 outlook after 737 MAX aircraft groundings

  • Boeing’s core earnings fell to $1.99 billion, or $3.16 per share
  • The planemaker said it faced $1 billion in increased costs in the first-quarter ended March 31

Boeing missed sharply-lowered Wall Street estimates for revenue and cashflow in the first quarter and suspended its 2019 outlook, as the world’s largest planemaker continued to suffer from the grounding of its 737 MAX jets.

The company said it faced $1 billion in increased costs in the first-quarter ended March 31, related to the 737 aircraft as it halted deliveries of the grounded planes to customers around the globe.

The company also said it was halting share buybacks.

The fallout of a second deadly crash within months in March has seen Boeing cut production of the jets to 42 aircraft per month, down from 52, and its operating cash flow in the first quarter was around $350 million lower than a year earlier.

Boeing is also spending on developing a fix for an anti-stall software known by the acronym MCAS, which has been a common link in the separate chains of events leading to the two crashes within a span of five months.

The company said it would be issuing a new forecast in the future when it has more clarity around the issues surrounding the 737 MAX.

First-quarter operating cash flow declined to $2.79 billion, from $3.14 billion, missing the Wall Street’s average estimate of $2.82 billion.

Revenue fell 2 percent to $22.92 billion, below analysts’ average estimate of $22.98 billion.

Excluding certain items, Boeing said its core earnings fell to $3.16 per share, in the quarter from $3.64 per share, a year earlier. Analysts had expected Boeing to earn $3.16 per share.