How Key Fox Execs Could Fit With Disney's New Deal
The success of the pending marriage depends on how well the management teams can integrate.
Walt Disney’s $52.4 billion acquisition of large parts of 21st Century Fox will create a Hollywood behemoth without equal under the leadership of chairman and CEO Bob Iger, who extended his contract through 2021.
But others may not have similar job security. Disney is promising the deal will reap $2 billion in cost savings, and observers expect much of that to come through job losses, be they in the form of layoffs, attrition or buy-outs.
Multiple town hall meetings on Dec. 14, the day the megadeal was announced, featured various division leaders at Disney and Fox taking questions from nervous employees worried for their futures. “No one believes assurances from management that our jobs are safe, and the assurances we were given were half-hearted at best,” said one Fox employee on the condition of anonymity.
Indeed, in a letter to employees signed by Fox CEO James Murdoch, along with co-executive chairmen Rupert and Lachlan Murdoch, a few sentences were interpreted as an acknowledgment that headcount would be slashed: “We are deeply committed to finding opportunities for our people as well as ensuring that anyone impacted is well taken care of,” read the letter, a copy of which made its way into a regulatory filing.
Despite job concerns among rank-and-file employees, the hook-up has the elements of a fairytale wedding for Disney, which will acquire film franchises like Avatar, Fantastic Four and X-Men, along with cable TV networks Nat Geo and FX. The success of the marriage, though, depends on how well the management teams can integrate.
Here’s how some key Fox executives could fit into the Disney structure:
James Murdoch, CEO:
While dad Rupert and brother Lachlan are expected to focus on the remaining Fox assets, and possibly take them private, James is understood to be looking for a top Disney executive post. Given his expertise in international TV and knowledge of European pay TV giant Sky and Indian TV powerhouse Star India, analysts have suggested he could take on an international role. The main question here is how he’d mesh with Walt Disney International chairman Andy Bird, who reports directly to Iger, and whether Murdoch would be open to such a role after being CEO.
“James and I will be talking over the next number of months,” Iger said Dec. 14. “He’s going to be integral to the integration process, and he and I will be discussing whether there is a role for him or not at our company.”
Whatever Murdoch’s title (if he gets one), the expectation is that he’d have four years to work his way into serious consideration as Iger’s successor. “We think this would be positive for Disney,” says Pivotal Research Group analyst Brian Wieser. “Such an appointment would not be without concerns given the harassment issues that emerged at Fox News and the hacking scandal in the U.K., which both emerged under his watch; however, we think that it is unlikely any CEO candidate would emerge without some shortcomings.”
Alternatively, those close to Murdoch say he is considering launching a new entrepreneurial venture, maybe with Disney’s backing, given that the three Murdochs are set to receive nearly 88 million Disney shares, making them the company’s largest individual shareholders.
Peter Rice, 21st Century Fox president, and chairman and CEO, Fox Networks Group:
Rice is in charge of Fox networks but also has past film experience as a former president of Fox Searchlight Pictures and Fox Atomic. An executive search expert said that such broad experience gives him a good shot at getting a significant role at Disney, possibly even one that could position him, too, as a contender for the Disney CEO role after Iger retires.
Stacey Snider, chairman and CEO, Twentieth Century Fox Film:
Alan Horn is a veteran in charge of Walt Disney Studios but he turns 75 early in 2018. Snider’s previous work running Universal and DreamWorks, along with her work at Fox, could position her as an immediate or mid-term successor to Horn. Some analysts, though, suggest Disney is comfortable letting Snider operate Fox as a separate studio until she proves herself worthy of larger role. “The case for sticking with Fox studio management is that Disney has traditionally been inclined to allow acquired managers to continue on, as in Pixar, Lucasfilm etc,” says Vogel Capital Management CEO and former industry analyst Hal Vogel.
Dana Walden and Gary Newman, co-chairs and CEOs, Fox Television Group:
With Disney buying the TV studio operation, one part of the business the duo oversees will go to the enlarged entertainment giant while the other, the Fox broadcast network, is staying with the remaining company, raising questions about where the executives will end up. One Wall Street observer suggested the Fox TV studio business would be folded into ABC Studios, led by president Patrick Moran, so there may be no need for more unit heads. And Walden has in the past been tipped for roles at peers, including Amazon Studios.
John Landgraf, CEO, FX Networks:
His talent relationships and success in making FX a destination of popular shows, coupled with Disney’s interest in original content for its planned streaming service that will be akin to Netflix, has observers expecting he’ll remain with the company. But edgy FX shows like Sons of Anarchy and American Horror Story do not target Disney’s typical demographic, with the Parents Television Council already criticizing the impending deal because it doesn’t like the idea of family-friendly Disney giving its seal of approval to FX.