While expected for a while, the official announcement today of a proposed $52.4 billion Disney acquisition of prime 21st Century Fox assets no doubt is creating anxiety at the other big entertainment companies, which are suddenly being dwarfed by the new Disney, which would combine two major film studios and two TV ones, in addition to a host of other entities.
Likely to assuage concerns, Sony Pictures Entertainment CEO Tony Vinciquerra today sent an internal memo addressing the pending deal, which he said “will mark a sea change in our industry.”
With 21st Century Fox, once considered too big to be acquired, broken up and partially sold, there is extra pressure on smaller companies like Sony. Vinciquerra made it clear the company is not for sale and intends to grow its business. (SPE was among those who kicked the tires on the 21st Century Fox divisions that were acquired by Disney)
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“In this climate, studios will either grow or become a target for acquisition,” Vinciquerra wrote in the memo, obtain by Deadline. “And as I have mentioned since arriving here last summer, it is my goal to do the former, not the latter.”
He also appeared to respond to a comment made by Rupert Murdoch on a call today about Fox Broadcasting Co.’s plan to rely more heavily on independent TV studios for scripted programming following its separation from 20th Century Fox TV. “As the networks tend to make more and more of their own programs, people like Warner Bros and Sony will be looking to us to buy programs so I think we’re in a strong position for getting all of the programs we need,” Murdoch said.
Wrote Vinciquerra, “Obviously, a consolidation like Disney-Fox creates disruption and uncertainty, but it can also create opportunities for an organization such as ours, where we have the independence and freedom to work with multiple partners to produce and sell content.”
We should note that there also have been suggestions that Fox may be considering launching its own in-house TV production studio, possibly via an acquisition of indie TV company like Sony TV or WBTV.
Here is Vinciquerra’s full email to staff:
As you have all seen by now, Disney’s acquisition of Fox assets today moved closer to becoming a reality. While still subject to regulatory approval, if completed, the deal will mark a sea change in our industry…but not an unexpected one.
As we have discussed on numerous occasions, the entertainment industry is in a time of consolidation. In this climate, studios will either grow or become a target for acquisition. And as I have mentioned since arriving here last summer, it is my goal to do the former, not the latter. Indeed, we did take a run at the Fox assets when we learned of their availability, and will continue to aggressively look for new avenues of growth for the studio wherever possible.
Key to our success in that effort will be to increase our profitability, improve our margins and strengthen our business overall. In the last several months we have made great strides in doing just that. We had a terrific summer at the box office in our motion picture group, and we are looking forward to our holiday tentpole, Jumanji; and our television businesses remain incredibly strong. And throughout all we do, we will continue to foster an environment that attracts top creative talent.
Obviously, a consolidation like Disney-Fox creates disruption and uncertainty, but it can also create opportunities for an organization such as ours, where we have the independence and freedom to work with multiple partners to produce and sell content. I look forward to exploring those and other potential opportunities with all of you as head into 2018.
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