Disney’s $66 billion acquisition of Rupert Murdoch’s 21st Century Fox will help it accelerate its digital direct-to-consumer strategy, accelerate growth at Hulu and allow ESPN to become a global powerhouse, CEO Bob Iger said.
Speaking to investors on an early morning call, Iger said that he expects the deal to bring it $2B in savings by 2021 and that it will close within 18 months after “significant” regulatory scrutiny in the U.S and internationally. Iger also reiterated plans to work with 21st Century Fox’s James Murdoch, saying he will be “integral to help us integrate… We’ll continue to discuss whether there is a role here.”
Murdoch was not mentioned in the company’s official news release.
Iger said that the deal would give Hulu, which it will now own 60% of alongside Comcast’s NBCUniversal unit and Time Warner, a “great opportunity” to expand and compete with the likes of Netflix and Amazon.
“Owning a third of [Hulu] was great but having control will allow us to greatly accelerate Hulu into that space and become an even greater competitor to those already out there. We’ll be able to do that not only by putting more content in Hulu’s direction but by essentially having control to the extent that managing Hulu becomes a little bit more clear, efficient and effective,” he said.
Asked about content spending plans at Hulu, which is in an arms race with streaming rivals Netflix and Amazon, he said it would be “premature to speculate” ahead of the deal close but said it had “some time to consider that.”
“We do know that if we decide to increase our original spending on Hulu, we certainly have the intellectual property-creating possibilities far more than we did before this acquisition,” he added.
Iger reiterated that direct-to-consumer plays are a priority for the enlarged studio as seen by the announcement of Disney and ESPN branded streaming services. “One of the most exciting aspects of the acquisition is that it will allow us to greatly accelerate our direct to consumer strategy, enabling us to better serve consumers around the world. We believe creating a direct to consumer relationship is vital to the future of our media businesses and is our priority.”
Elsewhere, he highlighted how the deal would help boost ESPN, while calling National Geographic complementary to Disney “especially when it comes to creating opportunities for kids and families to connect with nature.”
“Growing our global presence is another of Disney’s strategic priorities that is extremely well served by this acquisition, especially enhancing ESPN’s position as the world’s greatest sports media brand. The addition of Fox’s global sports platform, which includes 22 regional sports networks in the U.S. as well as a rich portfolio of sports rights in Europe, India and Latin America, nicely complements ESPN’s existing business and creates exciting new avenues to grow this brand far beyond the U.S.,” he added.
He also noted that the deal would bring together some of the world’s “most iconic” film franchises. “We have the opportunity to expand iconic franchises for new generations of fans just as we have done with Marvel and Star Wars. The obvious example is Avatar, which is still the single highest-grossing film in history. We’ve already worked with James Cameron to span the storytelling into a spectacular new land called Pandora: The World of Avatar, which opened in Orlando earlier this year and we’re very excited to continue that relationship, especially related to the series of Avatar films he’s currently working on. We’re also looking forward to expanding the Marvel cinematic universe to include X-Men, Fantastic Four and Deadpool and reuniting all of the Star Wars movies ever made under one roof, which opens new opportunities for that franchise.
Iger maintained his customarily unflappable, even tone on the call. At the end, though, a bit of corporate cheerleader crept in, as he ended with a “shameless plug” for Star Wars outing The Last Jedi, which opens today.
“You should go see it,” Iger said. “It’s a hell of a movie.” With a soft chuckle, he added, “May The Force be with us all.”
Below is clip of an interview Iger did this morning on Good Morning America in which he discusses the deal, a possible role for James Murdoch at Disney, and other things.