July 15, 2018

Disney Will Control 40% of the Box Office If It Buys Fox, Becoming the ‘Walmart of Hollywood’

Disney spent a whopping $71.3 billion to acquire most of 21st Century Fox, and by most accounts the Mouse House getting a lot of bang for its buck: “Avatar,” “Deadpool,” and the “X-Men” franchise are all part of the deal. If the acquisition ultimately goes through, according to CNN’s number-crunchers, Disney will control a full 40 percent of the box office.

That’s good news for fans who want to see Wolverine in a Marvel movie, but not everyone is celebrating.

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

Some of Disney’s most profitable properties are acquisitions: It bought Lucasfilm for $2.2 billion in 2012 and Pixar for an all-stock deal of $7.4 billion in 2006.

“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 adds, saying it would make Disney the “Walmart of Hollywood.”

“If a major studio suddenly disappears, that’s a huge concern for theater owners,” Jeff Bock  a senior box-office analyst at Exhibitor Relations, says. Fox stockholders will vote on whether or not to approve that happening on July 27.

Source: IndieWire film