Movies

Disney Would Take Over the Box Office if Fox Deal Goes Through

There aren’t too many hurdles left for Disney’s acquisition of 21st Century Fox. With the deal […]

There aren’t too many hurdles left for Disney‘s acquisition of 21st Century Fox. With the deal recently receiving anti-trust clearance from the United States Department of Justice, Disney may soon have control over not just Fox’s assets, but the domestic box office, too.

According to a new report from CNN, a Disney/Fox merger would see Disney dominate 40 percent of the box office in 2018 alone, a level of dominance that financial analysts say would make Disney the “Walmart of Hollywood” with impacts not just in terms of money coming in, but on influence and leverage in every corner of the industry, including with theater chains and streaming.

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“They’ll have so much share that it will seem to give them leverage up and down the supply chain,” Barton Crockett, senior analyst at FBR Capital Markets said. “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.”

Crockett explained that that kind of leverage has perks for Disney, giving the company more negotiating power over theaters for what percentage of ticket sales receipts the company gets to keep, but it’s also that kind of leverage that has some concerned about competition. Other studios, including Universal, Warner Bros., Paramount, Sony-Columbia, Lionsgate, Netflix, and Amazon all could be impacted by that leverage should the Disney/Fox deal go through.

However, it’s not just box office receipts that Disney would have leverage over. A combined Disney/Fox could potentially have control over the entire movie release calendar because of the power of its blockbuster franchise, such as Star Wars, the Marvel Cinematic Universe, X-Men, and Avatar. Disney could, in theory, use their position to stake out whatever release windows they wanted — especially prime ones — and leave whatever was left for other studios. The deal would also give Disney a prestige edge when it comes to smaller, but critically acclaimed films as well. The deal with Fox would also give Disney Fox Searchlight, which would see Disney potentially enter a segment of the market they’ve previously had limited success with.

It will be interesting to see how things shake out, but for now the Disney/Fox deal does still have a few roadblocks to get past before it’s all said and done. Last week, a Fox shareholder filed a lawsuit to halt the deal, claiming that filings with the Securities and Exchange Commission either omits or completely represents the future financial projections in the deal. It also takes issue with the lack of projections of Hulu’s future earnings and some concerns with debt as well.

What do you think about the idea of Disney potentially have a 40 percent box office dominance after the Fox deal? Let us know in comments below.