LOS ANGELES — Disney is buying a huge chunk of 21st Century Fox in a deal that promises to reshape the media industry and help the entertainment giant fend off digital rivals such as Netflix.
The $52.4 billion deal will combine two of the biggest players in Hollywood.
The sale represents a remarkable turn in the career of octogenarian mogul Rupert Murdoch, who is cashing out after building a major media empire. For its part, Disney is adding even more prime entertainment assets to an already swollen portfolio as it battles upstart streaming services that have undercut the traditional cable subscription model.
In addition to 21st Century Fox’s movie studio and regional sports networks, Disney is buying cable channels FX and National Geographic. Disney will also get Fox’s stakes in Hulu and European pay-TV provider Sky.
Prior to the deal closing, 21st Century Fox will separate the Fox broadcasting network, Fox News Channel, Fox Business Network, and some national sports networks into a new company that will be spun off to its shareholders.
Disney, which counts ESPN among its crown jewels, has suffered as consumers switch off their TVs and spend more hours watching streaming services such as Netflix that are distributed directly to consumers.
The deal allows Disney to expand its content, especially for streaming services. In addition to a majority stake in Hulu that it will have once the deal closes, Disney is preparing to launch two separate streaming services, one for sports and another focusing on entertainment. And it is pulling its content from Netflix in preparation for the launch. Adding Fox’s television and movie studios and the content they own means adding to the stable of must-watch content it can offer directly to consumers — and that streaming competitors can not.
There are also important international assets involved. Fox is in the midst of a lengthy regulatory review in the United Kingdom to take over the rest of the satellite broadcaster Sky it does not already own. In the announcement, Disney and Fox said “21st Century Fox remains fully committed to completing the current Sky offer and anticipates that, subject to the necessary regulatory consents, the transaction will close by June 30, 2018.” Disney would then assume full ownership of Sky as long as Fox’s transaction is completed before Disney’s.
The deal will needs to undergo regulatory review and will likely take at least a year to close. The Justice…