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Disney/Fox Deal: How The Battle to Beat Netflix Starts Today, What Happens to the Fox Network, And Other Burning Questions

"It's impossible for me to imagine the Fox Broadcasting Company continuing on," one executive familiar with the company told IndieWire last month.

“This Is Us,” “The X-Files,” “The Simpsons”

20th Century Fox TV

How do 20th producers, including Seth MacFarlane and Ryan Murphy, handle the change?

Ryan Murphy produced his breakthrough series, 1999’s WB drama “Popular,” at Disney’s Touchstone Television (which later became ABC Studios), before he moved on to Warner Bros. TV and then 20th Century Fox TV, where he’s found his greatest success. Now, Murphy may end up back where it all started — and that’s huge for Disney, which recently parted ways with Shonda Rhimes (to Netflix) and has room for another mega-creator.

Other major names with deals at 20th include Seth MacFarlane (who infamously hosted the Oscars for ABC in 2013), whose irreverent series are a bit of a contrast to Disney animation; Lee Daniels (“Empire”), Kurt Sutter (“Sons of Anarchy”), Nahnatchka Khan (“Fresh Off the Boat”), Liz Meriwether (“New Girl”), Steve Levitan (“Modern Family”), Dan Fogelman (“This Is Us”), Chris Lloyd (“Modern Family”), and Phil Lord and Chris Miller (“The Last Man on Earth”), whom, of course, were let go by Disney’s Lucasfilm from its Han Solo movie.

Those are a lot of high-priced deals to absorb. As both ABC Studios and 20th Century Fox TV deals expire, look to see some streamlining — particularly as it no longer has the Fox network to supply content to. (On the flip side, it will have a new streaming service to program; more on that in a moment.)

Which gems from the 20th Century Fox TV library does Disney want to mine?

The crown jewel of Disney’s 21st Century Fox acquisition is the 20th Century Fox TV studio, which boasts a library of some of the biggest shows of the past few decades: “Modern Family” (which airs on Disney’s ABC), “The X-Files,” and “This Is Us.” And then there’s the animation side, which includes “Family Guy” and arguably the most profitable TV series in history, “The Simpsons.”

Disney has managed to successfully expand the Marvel universe in TV, and is just getting started with “Star Wars.” It’s had a more difficult time doing the same thing with “The Muppets,” which stumbled via a disappointing ABC comedy last season. But nonetheless, this deal is all about Disney bulking up for the Streaming Wars, and the 20th Century Fox TV acquisition gives it a chance to mine several franchises. Fox developed, but never greenlighted, “The Simpsons” spinoffs; that universe is so deep, Disney may find it irresistible. “The X-Files” spun off into additional shows and films in the past; why not an “X-Files” Universe? And of course, Marvel already co-produces the X-Men-adjacent “Legion” (FX) and “The Gifted” (Fox), and this deal simply bridges any gaps there might have still been between the Marvel world and the titles that 20th Century Fox controlled.

20th Century Fox TV’s library also features some of the most critically acclaimed series in TV history, including “M*A*S*H,” “NYPD Blue,” and the MTM library: “The Mary Tyler Moore Show,” “Hill Street Blues,” “St. Elsewhere,” and “WKRP in Cincinnati.” In this age of reboots and remakes, they all could be fair game.

What does this all mean for Disney’s streaming service plans?

Disney will now have access to a much greater mix of programming and a robust library, from 20th Century Fox TV, FX Networks, National Geographic (which has a robust domestic and international presence), and Fox’s regional sports networks, as well as a 50% stake in unscripted powerhouse Endemol Shine.

Fueling a streaming behemoth is what this is all about. Disney has already announced plans for ESPN Plus, which will launch next year — and could now benefit from the addition of Fox’s 21 regional sports channels. Disney is also plotting a new offering focused on programming from signature brands such as Lucasfilm, Marvel, Pixar and Disney itself — including a long-expected “Star Wars” live action TV series.

On top of that, Disney would inherit 21st Century Fox’s stake in growing streaming service Hulu, bolstering Disney’s ownership to around 60 percent — dwarfing joint venture partners Comcast (30%) and Time Warner (10%).

Disney, of course, is preparing for a future where the big are only going to get bigger, and streamers like Netflix — which plans to spend up to $8 billion in programming just next year — attempt to dominate the landscape by appealing to mass audiences with broad offerings. Amazon is looking to bulk up under a “blockbuster TV” concept overseen by new programming head Sharon Tal Yguado, and Apple has entered the fray by spending $1 billion to get into the programming game.

Disney has already announced that it will pull its franchise films from Netflix, and other companies are becoming more cautious in cashing in on a Netflix deal, which only helps that company grow.

In acquiring FX, also Disney inherits the executive who has been the most vocal in sounding the alarm about Netflix’s world dominance: CEO John Landgraf.

In a now-prescient address, Landgraf sounded a dark note at this summer’s Television Critics Association press tour. “We are all watching an epic battle unfold for who will control human attention, which is both a finite resource and the most economically valuable commodity on Earth, because who controls your attention controls the ability to monetize that attention,” he said. “This is the root of the battle between Walmart and Amazon, between Facebook and Google and Apple, between Instagram and Snapchat, between Netflix and Amazon and the legacy television brands.”

FX is a leader in producing premium content that puts it on critical par with the likes of Netflix and HBO — the kind of fare that drives consumers to subscribe. Even Landgraf, however, is dipping his toes into the direct-to-consumer future: FX’s new ad-free FX Plus, sold at $5.99 a month, is now being sold to Comcast and Cox Communications subscribers, with more to come.

But even this summer, he noted that even as part of the 21st Century Fox behemoth, FX’s medium size puts it at a disadvantage vs. rivals like Netflix.

“Although not having to be all things to all people does provide certain advantage, the volume of output, particularly by our new Internet competitors, is truly daunting,” Landgraf said. “The requirement that we earn a profit, which means that we can’t spend more than we make each year; the increasing dispersion of audiences across more programs, more platforms, and longer spans of time; the ever greater challenge in marketing and publicizing shows in the age of too much TV; the degree to which the pool of talented artists is increasingly sporadic across more and more shows and brands.”

Now, as Disney launches its own behemoth Netflix competitor on the backs of content from programmers like Landgraf, he may get his chance — but it also enters the fray as another one of the behemoths he warned about. Welcome to the big show.

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