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Disney’s Buy: What Happens to 21st Century Fox’s Leadership, Fox Searchlight, and ‘X-Men’?

Assessing some of the film implications for the just-announced merger between the two studios.

HANDOUT EDITORIAL USE ONLY/NO SALESMandatory Credit: Photo by THE WALT DISNEY COMPANY HANDOUT/EPA-EFE/REX/Shutterstock (9292355a)Bob Iger and Rupert MurdochWalt Disney Co. to buy 21st Century Fox, --, --- - 14 Dec 2017A undated handout photo made available by Walt Disney Co. showing Walt Disney chief executive Bob Iger (L) and Fox owner Rupert Murdoch at an undisclosed location. Walt Disney Co. announced 14 December 2017 it will purchase 21st Century Fox's businesses containing Sky Television of which Fox owns 39 per cent and entertainment activities of 20th Century Fox film studios in a deal valued at 52.4 billion USD in stock, and the total transaction being valued at some 66.1 billion USD. A new company will be set-up consisting of remaining assets of Fox that include Fox News and Sports. Disney says it will also assume some 13.7 billion USD of net debt of 21st Century Fox.

Bob Iger and Rupert Murdoch

HANDOUT/EPA-EFE/REX/Shutterstock

Now that Disney is purchasing 21st Century Fox, here’s what we know: $52.4 billion will change hands, the six-studio system will now be five, and Disney will have a serious arsenal for the 2019 launch of its over-the-top streaming services. Presuming that Disney convinces the Federal Communications Commission and the Department of Justice that the union won’t violate existing antitrust laws, here’s a look at some of the merger’s biggest questions.

What Becomes of Fox’s Leadership?

The Disney/Fox merger comes on the same day that Disney/Lucasfilm’s “Star Wars: The Last Jedi” hits multiplexes. Who from the Fox motion picture side will go to Disney (vice-chairman Emma Watts?) and who will be free to look for a new job (Fox chairman Stacey Snider?). Disney is happy with studio steward Alan Horn and his team.

With Snider’s ex-Universal president Scott Stuber running movies at Netflix, many are wondering how those recent meetings at Amazon Studios went for respected executive Snider, who took over running the Fox studio a year ago.

Newscorp execs Rupert, Lachlan and James Murdoch sent an email to Fox employees last Thursday: “While we can’t comment on market speculation, we do want to address the impact we know this is having on all of you. Uncertainty always breeds unease. In every way, our focus is on our businesses and on the welfare of all our colleagues.”

News Corp. Exeuctive Chairman Rupert Murdoch, center, and his sons, Lachlan, left, and James Murdoch attend the 2014 Television Academy Hall of Fame in Beverly Hills, Calif. Roger Ailes' successor at Fox News faces a delicate task in changing the culture of a news organization forever identified with one man, and push it forward for a new generation without alienating an audience that has made it a tremendously lucrative business. Ailes, who Rupert Murdoch hired to invent Fox News two decades ago, resigned under pressure, amid accusations of sexual harassmentFox Ailes Successor, Beverly Hills, USA

Lachlan Murdoch, Rupert Murdoch, and James Murdoch in 2014

Ste/Invision/AP/REX/Shutterstock

Someone as experienced as Snider, having run DreamWorks (which had a checkered track record at Disney), Universal and TriStar, can take her pick of studio jobs. Amazon Studios could be a prime landing spot for Fox execs: Amazon lost its founding executive Roy Price to sexual harassment accusations, and is keen to be competitive with rival Netflix — but under film execs Jason Ropell, Ted Hope, and Bob Berney, it’s sequestered in the specialty film business. In the 2018 Oscar race, summer comedy hit “The Big Sick” earned two SAG nominations while their in-house slate has underperformed — and scandal-hounded auteur Woody Allen’s “Wonder Wheel” is among its weakest performers. — Anne Thompson

Stacey SniderHFPA Grants Banquet, Arrivals, Los Angeles, USA - 02 Aug 2017

21st Century Fox Chairman Stacey Snider

Matt Baron/REX/Shutterstock

What Is The Fate of Fox Searchlight?

Fox’s indie arm has been a respected player in the independent film market for over 20 years, with a legacy that encompasses “The Full Monty,” “Napoleon Dynamite,” and “12 Years a Slave.” It remains a major awards-season player with Guillermo del Toro’s “The Shape of Water” and “Three Billboards Outside Ebbing, Missouri.” Co-presidents Nancy Utley and Steve Giulia are some of the most respected indie executives in the business, and the Searchlight library is filled with beloved modern classics.

“Slumdog Millionaire”

But does Disney have an appetite for this small-scale world? Its only outing in this space was its 1993 acquisition of Miramax, and over 12 years it garnered attention with everything from “Pulp Fiction” to “Clerks” to “Heavenly Creatures,” — but it didn’t often see profits. When Disney separated from the Weinstein brothers in 2005, there was no shortage of acrimony on both sides. Since then, Disney has placed its focus squarely on its silos, making the biggest of big bets with Marvel, Pixar, and Star Wars.

Fox Searchlight is a first-class specialty label, but it’s hard to imagine the home of Mickey Mouse making room for quirky low-budget prestige movies unless it sees some real business opportunities. And, it might have one in its new OTT streaming service, which will need a constant flow of fresh content in order to compete with Netflix. However, that could change the nature of Fox Searchlight: If it existed primarily to feed the service with premieres, that would push out of its role as one of the premier specialty theatrical players, and into the Netflix model that favors playing most Sundance buys as strictly small-screen. — Eric Kohn

What Is The Value of a Consolidated Marvel Universe?

In 2009, Disney paid $4 billion for Marvel Entertainment. But the buy didn’t give them ownership over all Marvel entities. Fox held existing licensing agreements for “X-Men” and “Fantastic Four,” Sony Pictures releases all things “Spider-Man,” and Universal has a theme park agreement. When Fox released its last “Fantastic Four” film in Summer 2015, it earned  just $56 million domestic of its $120 million budget, wiping out hopes for a sequel.

Thus, Iger & Co. are gunning for “X-Men,” the multi-billion franchise that launched in 2000. By this time next year, audiences will have inhaled 13 such films: Eight with “X-Men” in the title (half of which were directed by Bryan Singer, who was recently axed from another Fox production, “Bohemian Rhapsody”), plus features starring the likes of Deadpool and Wolverine (who will need to be recast for future onscreen appearances — Hugh Jackman hung up his claws after “Logan” this March).

"X-Men: Apocalypse"

“X-Men: Apocalypse”

Many Marvel comic fans are excited at the prospect of having Marvel Studios oversee “X-Men” movies, which historically found an uneven reception. And it means no longer having to deal with the weird narrative gaps forced by licensing deals, as Fox-licensed characters were usually excluded (an exception was Quicksilver, played by Aaron Taylor-Johnson, who was allowed to appear in “Captain America: The Winter Soldier” and “Avengers: Age of Ultron”). Understandably, Marvel devotees want characters who they know inhabit the same world to also inhabit the same movies. —Jenna Marotta

What About Animation? 

Fox only had a few days left as the distributor of DreamWorks Animation: Comcast-owned NBC Universal forked over $3.8 billion for DreamWorks Animation in April 2016. The final Fox-released DreamWorks picture was May’s “Captain Underpants: The First Epic Movie;” “How to Train Your Dragon 3,” will come out in early 2018 via Universal, as will all of DreamWorks’ subsequent films.

Fox still oversees Blue Sky Studios, makers of the “Ice Age” franchise and the current hit “Ferdinand;” that should fit nicely into the Disney arsenal. This September, Fox also signed a co-production and development deal with Locksmith Animation. The first Fox-Locksmith release, “Ron’s Gone Wrong,” is still nearly three years away… and will now feature a familiar castle in the opening titles. —JM

Eric Kohn contributed to this report.

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