Disney - Bigger Than You Know

[Music] does anyone have a guess as to the highest-grossing movie of 2018 domestically the answer is Black Panthers see my guess would have been infinity war but as it turns out infinity war was the number one in the worldwide box office and just barely came in number two domestically so that wouldn't have been a terrible guess but do you have a guess as to what number three is it's The Incredibles 2 all three of these films were made by Disney isn't that crazy not just the top spot the top three spots I should mention they're also responsible for numbers 9 12 14 and 18 on the list so you shouldn't be surprised to hear that in 2018 they had a higher market share than any other studio it wasn't even close more than a quarter of all the tickets sold at the box office were for Disney movies Disney has been growing like crazy look at their revenue over the past 25 years in 1993 they brought an eight point five billion dollars and in 2018 that was up to fifty nine billion that's seven times higher and I think this is a good time to look at their total assets as well because they've been growing even faster Disney is eight point four times bigger today than they were 25 years ago in they were pretty big 25 years ago a huge portion of this growth can be attributed to them making some strategic acquisitions the biggest of which was a 71 billion dollar acquisition involving Fox that was finalized on March 20th 2019 I know a second ago all of these graphs look like they had reached some crazy heights but I can guarantee there's going to be a huge jump next year I'll talk more about this latest acquisition in a little bit but what I'd like to do first is talk about some of their more significant acquisitions over the past 25 years starting with Miramax in 1993 Disney bought the independent film company Miramax for sixty million dollars and really helped turn them into something under their control they made movies like scream Armageddon Chicago a Best Picture winner in No Country for Old Men another Best Picture winner some Quentin Tarantino movie I guess you can say these were all technically Disney films they let me remark do their own thing but they took in the money from them and they had final saying things after owning it for 17 years they decided to sell it in 2010 the collection of films they built up over that time helped make it much more valuable than when they bought it they ended up selling it for six hundred and sixty million dollars then in 1995 Disney spent 19 billion dollars to acquire a company called capital cities see 10 years earlier capital cities had bought the TV network ABC who was already the majority owner of ESPN so in this 1985 deal control of both networks went to capital cities then in the 1995 deal it all went to Disney the deal also included significant interests in other cable channels along with a bunch of various newspapers and magazines so if you're ever wondering why they're giving away so many trips to Disneyland on America's Funniest Home Videos or why there's so many Disney themed weeks on Dancing with the Stars it should all make sense now next up is Fox family that's another TV channel there used to be a channel called Fox family until Disney bought it in 2001 for three billion dollars they quickly renamed it to ABC Family and as of early 2016 the name has been changed yet again to freeform but Disney still owns it a few years later in 2004 they bought the rights to the Muppets from Jim Henson's family the amount wasn't disclosed but the Henson family had bought the rights for 78 million about a year earlier so it's likely to be somewhere in that range the deal included the rights to use Kermit and Miss Piggy and all of those characters but didn't include the rights to the Sesame Street gang they have different owners following that in 2006 they bought Pixar for the price of 7.4 billion at that point Pixar had yet to create anything considered even close to a failure it was six great films Toy Story A Bug's Life Toy Story 2 monster's Inc Finding Nemo and The Incredibles with cars on the way that always worked closely together as far as financing and distribution but here they decided to come together entirely it was actually in a time when Disney was having a little trouble with their animated movies so a deal like this would hopefully helped things and something interesting here is Steve Jobs was the majority owner of Pixar so this deal made him Disney's largest stakeholder then in 2009 they made an acquisition that people continue to talk about this is a fun one they bought Marvel for the price of four billion dollars the most attractive part of this deal obviously was the five thousand characters that they would receive the rights to now there were some major characters that Marvel had sold before the acquisition those include spider-man and all of the x-men characters the Fantastic Four so they didn't get those but they sure got a lot of good ones and because of this they've had the freedom to create an entire cinematic universe in 2012 Disney paid four billion dollars for Lucasfilm which is the owner of the Star Wars franchise that was fully owned by Star Wars creator George Lucas this deal made George Lucas the second largest shareholder of Disney behind only the trust of the now deceased Steve Jobs George Lucas had been the main guy behind the original trilogy and the prequels all made under his ownership everything that's been made since the acquisition starting with the force awakens has not really involved George Lucas and has been made by Disney that brings us to their most recent deal with Fox in this one they paid seventy one point three billion dollars just to help visualize how large that is I put it on a graph next to all of the other acquisitions I talked about and obviously nothing even comes close and then just for fun I combined all the other acquisitions and put them on a graph it's about half this is by far the largest acquisition Disney has ever made in a long line of large acquisitions so let's talk about it this has been a long time in the making the simplified version is that in December of 2017 Disney put in a fifty two billion dollar bid then six months later Comcast came in with a sixty five billion dollar bid then Disney quickly came back with this seventy one billion dollar bid these are high amounts of money we're talking about the bid was accepted and the Department of Justice said that they would approve it with the exception of Fox's regional sports networks considering Disney already owns ESPN I'd say that's fair the result is that Fox would own and operate those sports networks their news channel in the Fox Network and some others but they've essentially been reduced to simply being the owner of some TV channels it's all spun off into its own new company so here's what Disney gained for one remember this list of studio market shares I showed you in the beginning number five on that list was 20th Century Fox which was just bought by Disney also further down the list at number 11 is Fox Searchlight who was also bought by Disney if next year is anything like last year they'll be up to about 36% and that's crazy not to mention a huge collection of previously made movies that they now own and something that'll help them maintain these high sales is the fact that the deal also includes the x-men and the Fantastic Four characters so don't be surprised if you see some of them popping up in the MCU the deal also includes some television networks such as FX and the National Geographic along with the rights to any characters owned by them and content produced by them in the past plus Hulu they already own 30% of it and just bought Fox's 30 percent and if my math is right that gives them a 60% stake which is a majority stake they've also expressed interest in acquiring an additional 10% from AT&T Comcast owns the rest of it but I wouldn't be surprised if I saw that transfer over sometime soon and this brings me to what was likely the biggest motivation behind the deal streaming Disney will continue to be completely dominant at the box office but that might not be the best industry to dominate in the u.s. digital home entertainment revenue has been exceeding movie ticket sales for some time and as of 2018 that's now true on a global scale basically fewer people are going out to the movies because they're choosing to stay home and watch Netflix instead as I said the deal gives them controlling interest in Hulu but it's also providing them with content for Disney plus a subscription service they're planning to launch later this year do you realize just how much content they can put on there well I guess you do because I've been talking about it throughout this entire video plus they have all these characters in their collection to create new stuff all of which they plan to do this could be bad for Netflix I'm actually really excited to see what comes of it in my final attempt to show you that Disney is bigger than you know there's a lot more to this company that I failed to mention until now as far as TV networks in addition to all the ESPN and Disney Channel's freeform ABC and now FX and National Geographic they also own a 50% share of ane History Channel and lifetime along with some others that I've never heard of and I have to mention this theme parks I'm sure you already know about these but you may not appreciate their size I have these things all over the world and they generate revenue of over twenty billion dollars per year which is actually about twice as much yes their entire movie business that we've been focusing on and I think it's safe to say that the deal with Fox will be beneficial to this part of their business too it gives them all these new characters they can incorporate an endless possibilities for attractions let me know in the comments did you think Disney was this big the obvious question here is have they become too big even before the Fox deal many people thought so but now holy cow it's scary to think that they're becoming so powerful and controlling so much of our entertainment but on the other hand we could be getting some pretty cool entertainment out of this and finally what do you think about Disney Plus devastating for Netflix or maybe it'll come and go without much notice I'd like to hear what you have to say thank you for watching [Music]

Channel: Company Man

Views: 663,872

Keywords: Disney, Fox, Merger, Muppets, Star Wars, Avengers, Marvel, Pixar, ABC, Netflix, Hulu, Streaming

Id: r_0ra-sILKU

Length: 10min 20sec (620 seconds)

Published: Wed Mar 27 2019