What Disney’s Fox Acquisition Suggests About a Paramount-Warner Bros. Merger

Paramount may be making a bid to take over Warner Bros. Discovery. But what would that look like if it actually went through?

For clues, let’s look at what happened with the last monster merger, when Disney took over 21st Century Fox for $71.3 billion in 2019.

In the deal, Disney got some key assets:

• The 20th Century Fox library
• Fox Searchlight Pictures
• Blue Sky Studios (Ice Age, Rio, etc.)
• The Simpsons
• Family Guy
• Alien
• Avatar
• Predator
• Planet of the Apes
• Kingsman
• Die Hard
• X-Men
• Deadpool
• Fantastic Four

Disney also acquired Fox’s 30% of Hulu. Disney wouldn’t gain total control of Hulu until 2025, when it paid $9.2 billion for Comcast’s stake.

Catch and Kill

Now 6 years later, we can see Disney hasn’t done a lot with its haul.

Sure, it has all of Hulu, but it’s killing the service and importing the library to Disney+.

We’ve had a handful of sequels to their movie franchises. The well-received “Predator” prequel “Prey” went direct-to-Hulu, blunting the impact of a movie that would have performed well theatrically. The third “Avatar” sequel is on the way. FX’s “Alien: Earth” has been a buzzy success. Disney is just using a scaled-down assembly line approach the way they do with Marvel: knock out a movie or show every few years and keep the IP on life support.

Disney’s handling of the “Star Wars” franchise (purchased from George Lucas for $4 billion in 2012) has been somehow worse. We got an incoherent jumble of sequels and prequels and streaming shows. For every excellent “Andor,” there were several disastrous outings like “Solo,” “The Acolyte,” or “Obi-Wan Kenobi.”

Disney launched a section of their theme park inexplicably set on a planet that didn’t come from the movies. They created a windowless Star Wars hotel experience that cost guests a fortune and delivered an awful experience. Jenny Nicholson’s 4-hour video dissection of this debacle has 14 million views on YouTube. It was only open 19 months before Disney pulled the plug.

The problem is that Disney is an enormous company with cruise ships and theme parks and the ESPN sports empire in addition to movies and merchandising. Things are great when you have a well-oiled machine like the Marvel Cinematic Universe, but what happens when that well-oiled machine starts to sputter? The MCU has seemed rudderless since 2019.

“The Mandalorian” shot out of the gates in 2019, but each subsequent season has been significantly worse.

Kathleen Kennedy runs the Lucasfilm brand, but it seems like she’s picking creative teams like a child on a speed run at Golden Corral, piling her plate with pizza, roast beef, french fries, ice cream, and sushi. “Who cares if it all goes together? Dinner can be Captain Crunch floating in Mountain Dew because both are delicious and it all turns into poop anyhow.”

Disney seems to be creating from a place of fear right now, leaning on reboots and remakes and increasingly lifeless sequels. Its few original films seem like they were beaten to death by a focus group before hitting the big screen.

The lesson from the acquisition? You can only do so much so well. The more plates you try to spin, the more plates hit the ground. Sometimes, it’s just easier to let things die. But if you’re going to euthanize them, why did you buy them in the first place?

How Will this Play Out With a Combined Paramount-Warner Bros. Discovery?

If Paramount chooses to swallow the entire Warner Bros. Discovery operation, you’re sure to see the same thing as what happened with Disney.

We’ll get reboots and remakes of varying quality.

Paramount will choose which cable channels to keep alive. The rest may carry on as zombie rerun channels or they may be sold for scrap.

The streaming library will get a one-time boost from the deep movie and TV catalog.

Theatrical output will decrease from what the two standalone companies were producing.

The live sports portfolio will grow, but Paramount will have to decide which assets broadcast on which platforms.

What’s the Best Case Scenario?

After the initial jolt of content, the best case scenario is that Paramount follows the model its potential acquisition HBO has mastered: hire talented creators, give them money, and walk away.

When HBO allows its original voices to create their visions, the result is often groundbreaking and popular. They’re not trying to be something for everyone. It’s unique, and that makes it infinitely valuable.

So if Paramount treats its WBD properties the way they treat the Taylor Sheridan universe, the company could become a wonderful home for new voices and exciting stories.

The temptation, however, will be to treat each franchise like an interchangeable widget on the calendar. You spin the wheel and say, “I need Franchise X in Summer 2026, Franchise Y in Summer 2027, and Franchise Z in Summer 2028.” The temptation is to let sequels be cranked out by a series of cheap directors. The temptation is to meddle.

Think of all the legendary sports franchises that have been ruined by careless ownership. If you’re too involved or too absent, the team can’t function and the on-the-field product suffers. But if you hire wisely, invest carefully, grow talent, and let the professionals do what they do best, you will find success.