Disney could emerge as "Wallmart of Hollywood" and control 40% of US box-office if it buys Fox
Disney is well on its way towards almost monopolistic control over the domestic box-office. After months of speculations and projections, it emerged that the Mouse House is pouring in a whopping $71.3 billion into the megadeal to acquire most of 21st Century Fox. If the deal goes through, it is being anticipated that the studios could add other big-names including Deadpool, X-Men, and Avatar to its existing roster of franchises.
While from a general movie goer's perspective, the merger is exciting, there are some serious implications as well if and when the deal is actually finalized. Market analysts predict that following the acquisition, Disney — which already has major stakes in the domestic market share — would go on to control nearly 40% of the US box-office, which is a considerable portion as compared to the shares of the other studios like Time Warner, NBC/Universal, Sony, Paramount and so on.
"They'll have so much share, that it will seem to give them leverage up and down the supply chain," said Barton Crockett, senior analyst at FBR Capital Markets, according to CNN. "It's what happens in a world where one studio, mainly Disney, is having outsized success in doubling down on its investments, and most of the other studios seem to be on their heels a bit when it comes to making movies."
Explaining the impact of the headline-grabbing merger Crockett added that following a successful deal, Disney could emerge as the "Walmart of Hollywood." Such a domination of the market share could translate into certain perks for the Walt Disney Studio as well - for instance, an upper hand with negotiating ticket revenue shares.
"If they continue to grow their share of domestic box office, it's hard to escape the conclusion that they'd have leverage over time to get an even higher share of movie receipts," Crockett explained. Representatives from Disney have not commented on the estimated figures mentioned in the CNN article.
While the merger seems solid as of now, rumors about the acquisition have been doing the rounds even as early as late 2017, causing many in the entertainment industry to raise concerns over the implications. In fact, 'Logan' director James Mangold was one of the firsts to voice his curiosity about the acquisition.
“If they’re actually changing their mandate, if what they’re supposed to do alters, that would be sad to me because it just means less movies,” the director had said. “I just hope what we end up with is going to be a positive in terms of movies.”
The director associated with the X-Men franchise was also concerned about Disney's family-friendly movies, which meant a lack of a spot for R-rated ones.
“The real thing that happens when you make a movie rated R, behind the scenes, is that the studio has to adjust to the reality that there will be no Happy Meals. There will be no action figures... You can’t kill the characters because they’re worth so much effing money," Mangold added.