Disney CEO Reveals The Real Reason They Bought Fox

The Disney Fox deal finally happened, and now 20th Century Fox is officially a part of Walt [...]

By Matthew Aguilar

The Disney Fox deal finally happened, and now 20th Century Fox is officially a part of Walt Disney. There were several reasons the deal made sense for Disney, including getting the rights back to some of their iconic Marvel characters for use in future films, but that isn't why they ultimately paid $71 billion dollars. No, that all came down to one reason and one reason only, and that's Disney+. The new streaming service is a big deal for Disney, and discussions between Disney CEO Bob Iger and Fox's Rupert Murdoch began shortly after Disney purchased BAMTech, a company that specializes in streaming media.

"The opportunity to buy Fox first came up later that year. In fact, just a few months after the board approved us buying the majority share of BAMTech — which was done for one reason, to go into the direct-to-consumer business — Rupert and I sat down and talked about a transaction," Iger told CNBC.

"We would not have done that transaction had we not decided to go in this direction," Iger said, "because — if we hadn't, we would have been looking at that business and through a traditional lens: 'Oh, we're buying TV channels. We're buying more movie-making capability, et cetera. But by the time the acquisition opportunity came up, and we knew we were going in this space, we evaluated what we were buying through this new lens of: 'Wow, what could National Geographic mean to us?'"

"What could it mean having access to [Fox's] library, not to monetize it through traditional means, but to do it through this?" Iger said. "Bam! I mean, the light bulb went off."

Disney is already sitting on a massive amount of IP as it goes to launch Disney+, including its own library of classic animated films, live-action films, and Pixar movies, but will also roll out of the gate with the complete Star Wars collection, all of their Marvel films, and now Fox content, which includes a bevy of other franchises that can find a home on the streaming service. It will also host Disney Channel shows, Disney Channel original movies, and more.

The costs of launching Disney+ are considerable, but Disney feels they can recoup that rather quickly, and part of that is a price point that is appealing to budget-conscious consumers. At $6.99 a month, the value can't be understated, and Disney is only going to add more value after 2019 is finished, as big films like The Lion King, Aladdin, Avengers: Endgame, and Spider-Man: Far From Home are all on deck.

Disney+ launches on November 12th.

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