What's going on?

Walt Disney agreed to buy a $66 billion chunk of 21st Century Fox on Thursday in a deal that catapults forward Disney�s plan to focus on streaming and confront Netflix head on. Hakuna Matata!

What does this mean?

Disney is buying Fox�s film and television studio (producer of The Simpsons and Family Guy), its US and international cable TV businesses, Fox Sports Regional Networks and Fox�s stake in streaming service Hulu. The rest of Fox�s business, like Fox News, will be put into a new, separate company.


The deal allows Disney to massively beef up its content offering, and to offer that content directly to consumers via its own streaming service (and probably via Hulu, in which Disney now has a majority stake). Also, Disney could use the significant sports content it’s buying as fuel for Bamtech, the sports streaming company of which Disney is also majority owner.

Why should I care?

For markets: Investors can feel the love tonight.

Disney�s shares are up about 10% since news of the deal first leaked, suggesting its investors like the rationale. Traditional media players like Disney need huge scale if they want to fight like Gaston Netflix and Amazon (part of Fox�s motivation to sell was likely so that it wasn�t left as an undersized player in the industry). Disney can now use revenue generated by Fox�s shows to help fund the development of its own streaming service and, crucially, to populate that service with supercalifragilistic content people want to watch.


The bigger picture: Competition regulators have their hands full.

AT&T�s acquisition of Time Warner is already heading to the courts as the Department of Justice says it will unduly harm competition in the media sector. Disney�s proposed acquisition of Fox will get scrutinized in several countries. Of particular interest in the US will be Disney�s acquisitions of Fox�s regional sports networks which, when combined with Disney-owned ESPN, might give the new company too much sway over televised sport.