Fox Deal and 'Star Wars' Cap Disney's Blockbuster Year
Walt Disney expects to end this year basking in the (lightsaber) glow of the likely box-office blockbuster Star Wars: The Last Jedi—which opens in movie theaters on Friday, Dec. 15—not to mention a massive, just-announced acquisition of the bulk of 21st Century Fox’s assets.
The company’s 2017 felt at times like one long build-up to what is the latest update in the Star Wars saga. But the year was also another 12 months of Disney trying to cope with declining TV ad revenue, fielding questions about CEO succession planning, and most recently, unsuccessfully quieting rumors of a an acquisition that would reshape the media landscape.
The following is Fortune’s guide to the biggest Disney-related news of 2017:
A Megadeal for the Holidays
What a way to end the year. While the rest of us were busy pre-ordering The Last Jedi tickets, Disney was putting the final touches on a deal to acquire most of rival 21st Century Fox’s assets. On Thursday, Disney and Fox officially announced an all-stock deal worth $52.4 billion (plus, another $13.7 billion in assumed debt) that includes, most notably, the 20th Century Fox movie and TV studios, along with cable networks like FX, National Geographic, and various regional sports networks. The deal also gives Disney majority control of the streaming service Hulu and, if Fox’s planned takeover of Sky TV goes through, then Disney would also get control of that European pay-TV giant.
Due to FCC regulations, Disney would not be able to acquire Fox’s broadcast network (it already owns ABC), and the deal is also likely to exclude the Fox News cable network, among other assets. (And, even then, there’s no guarantee that federal regulators will approve the deal after suing to block AT&T-Time Warner.) But, make no mistake, this is a transaction that could drastically alter the media and entertainment landscape while handing Disney control of an even greater library of movies, TV shows, and live sporting events that will feature heavily in the media giant’s plans to force its way into the streaming services market and the increasingly crowded competition for digital viewers (more on that below).
Iger Extended His Stay (Again and Again)
In March, Walt Disney’s board announced that chairman and CEO Bob Iger would remain in those roles through at least July 2019. The news marked the latest contract extension for Iger, and not the last, as Disney said on Thursday that Iger will remain at the helm of the company through 2021 as a result of the Fox acquisition. The reasons for delaying Iger’s retirement party (and putting his possible political aspirations on hold)? First, Disney has not had much luck identifying a successor for a man who took the company’s reins in 2005 and has helped produce record earnings for the “Mouse House.” But, now, the company is likely planning to lean on Iger’s experience for a steady hand to complete the deal with Fox and merge the two companies’ massive wealth of assets, as well as to guide Disney as it pushes deeper into the streaming media market. (Interestingly, the same huge transaction that is keeping Iger around could also usher in his ready-made heir apparent, in Fox’s James Murdoch.)
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ESPN Continued to Struggle
An ongoing storyline for Disney this year was that the company’s earnings continued to suffer because of disappointing ad revenue from its television unit, namely sports media giant ESPN. ESPN continues to suffer from the cord-cutting trend, losing more than 12 million subscribers in recent years, and expensive TV rights contracts that have required cost-cutting at the network. ESPN announced layoffs for roughly 100 employees, including on-air talent, earlier this year before cutting another 150 jobs just last month.
Betting on Streaming
In August, Disney said it would pay $1.58 billion to take over majority ownership of BamTech, the successful streaming video arm of Major League Baseball. The move signaled a streaming-focused future for the entertainment giant, as Disney also announced plans to roll out two standalone subscription streaming services over the next two years. The first, called ESPN Plus, is planned for the spring of 2018 with an offering of more than 10,000 live streaming sports events each year. The other service will roll out in 2019 and it will aim to compete with rival services like Netflix and Amazon by offering access to film and television titles from Disney’s vast entertainment portfolio. Without a doubt, Disney is moving forward with the Fox acquisition with both of those streaming services in mind. Fox’s assets, including vast movie and TV rights (think Marvel’s X-Men, The Simpsons, Avatar, and more) as well as extremely valuable regional sports networks, give Disney that much more content to add to what is already a treasure trove of entertainment and sports programming.
Shanghai Disney Celebrates, Star Wars Resort Awaits
Disneyland Shanghai, the massive $5.5 billion resort that opened last year, celebrated its one-year anniversary in June, with Iger announcing that the resort saw more than 11 million visitors in its first year of operation. (That’s more than some Disney parks, though the Magic Kingdom in Florida brings in more than 20 million annually.) Meanwhile, Disney also firmed up plans for its Star Wars-themed areas, called “Star Wars: Galaxy’s Edge,” at Walt Disney World Resort and Disneyland in 2019.
A Tough (Box-Office) Act to Follow
In 2016, Disney set a new record as the first Hollywood studio to ever top $7 billion in global box office receipts in a single calendar year, including four films released in the year that went on to gross more than $1 billion each. Coming off that success, Disney kicked off 2017 on a strong note, with Rogue One: A Star Wars Story still racking up ticket sales through the New Year. Then, in March, the Beauty and the Beast live-action adaptation turned out to be a blockbuster and became the year’s highest-grossing film domestically (though, Star Wars: The Last Jedi should soon change that). Add in Marvel’s Thor: Ragnarok and Guardians of the Galaxy Vol. 2 and, even before the latest Star Wars film, Disney had three of the six biggest domestic releases of 2017, according to Box Office Mojo, even if the studio’s yearly box office haul couldn’t match its record-setting run a year earlier.
Of course, all eyes remain on mid-December’s release of The Last Jedi, which will try to top the box-office records that The Force Awakens set in 2015. Meanwhile, Disney also made news in 2017 by announcing a whole new Star Wars trilogy (to kick off sometime after 2019), as well as a live-action television show based on the movie franchise.
CORRECTION: This article has been corrected to show the name of the planned Star Wars-themed areas at Walt Disney World Resort and Disneyland, which is “Star Wars: Galaxy’s Edge.”