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Disney's Most Notable Acquisitions Since Inception
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Even though The Walt Disney Company was established already in 1923, many of the franchises and brands have been acquired during the last couple of decades. The acquisition strategy has been instrumental in cementing Disney's status as a world-leading entertainment powerhouse. In this article, we list and visualize Disney's most notable acquisitions year by year since its inception, and delve into the ongoing stream war against Netflix.
Decades of Acquisitions
From its beginnings as an animation studio in 1923, Disney has evolved into one of the world's leading companies within media and entertainment. The company's M&A strategy has been instrumental in this transformation, with key acquisitions including ABC Television in 1996, Pixar Animation Studios in 2006, Marvel Entertainment in 2009, and Lucasfilm in 2012. Of particular note is the landmark acquisition of 21st Century Fox in 2019, which remains the second largest media acquisition in history, second only to AT&T's $85 billion acquisition of Time Warner in 2018.
The 21st Century Fox Acquisition
Disney's acquisition of 21st Century Fox, announced on December 14, 2017, and completed on March 20, 2019, was the largest in the company's history. Initially valued at $52.4 billion, the deal's value was later revised to $71.3 billion following a bidding war with Comcast. It included key assets such as the 20th Century Fox film and television studios, U.S. cable channels like FX and Fox Networks Group, a 73% stake in National Geographic Partners, Indian television broadcaster Star India, and a 30% stake in Hulu. Prior to the acquisition, 21st Century Fox spun off several assets into the newly formed Fox Corporation, including the Fox Broadcasting Company and Fox News Channel. Other assets like the Fox Sports Networks and Sky were sold to third parties.
Disney's CEO Bob Iger highlighted that the acquisition was driven by Disney's anticipation to develop its own streaming service, Disney+, which launched in November 2019. The deal was less about Fox's production capacities and more focused on acquiring Fox's film and television libraries to expand Disney+'s offerings. This acquisition included film rights to third-party franchises such as Avatar, X-Men, Deadpool, and Fantastic Four, along with distribution rights to Star Wars. It also consolidated ownership of other franchises like Home Alone and gave Disney access to adult animation with shows like The Simpsons and Family Guy.
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The United States Department of Justice approved the acquisition under the condition that Disney sold Fox's 22 regional sports channels within 90 days of closing. Despite a lawsuit filed by a Fox shareholder to stop the acquisition, citing the absence of financial projections for Hulu, and Comcast's continued interest in acquiring Fox's Regional Sports Networks, Disney and Fox shareholders approved the merger on July 27, 2018. The approval from Mexico's telecom regulator, the Federal Telecommunications Institute, on March 11, 2019, cleared the last major holdout on the deal. As part of the acquisition's completion, Disney announced the integration of top 21st Century Fox television executives into the company, including Peter Rice as Chairman of Walt Disney Television.
Even though the acquisition of 21st Century Fox is one of the largest ever in the media and entertainment industry, it represents just one among many for Disney, underscoring the company's dominant market position. In the visual below, we have included every notable acquisition since 1990.
Visualizing 33 Years of Acquisitions
Disney's Most Notable Acquisitions Listed Chronologically:
1990's
Miramax (1993)
Capital Cities/ABC Inc. (1995)
ESPN Inc. (1995)
Infoseek (1998)
Starwave (1998)
2000's
Fox Family Worldwide (2001)
The Muppets and Bear (2004)
Avalanche Software (2005)
Pixar (2006)
Climax Racing (September 2006)
Club Penguin (2007)
Junction Point Studios (2007)
Ideal Bite (2008)
Kerpoof (2009)
Hulu (2009)
Wideload Games (2009)
Marvel Entertainment (2009)
2010's
Tapulous (2010)
Playdom (2010)
Rocket Pack (2011)
UTV Software Communications (2012)
Maker Studios (2014)
Lucasfilm (2015)
BAMTech (2017)
Euro Disney SCA (2017)
21st Century Fox (2019)
2020's
Hulu (remaining 33%, 2023)
Streaming Wars
As of the third quarter of 2022, Disney had officially overtaken Netflix in total paying subscribers, marking a significant milestone given Netflix's long-standing dominance in the video streaming sector. However, Netflix has since reclaimed its leading position. Below, we present a visualization of the ongoing streaming war.
Another important aspect to consider is profitability. Disney has aggressively marketed Disney+ at a much lower price point compared to competitors such as Netflix. Consequently, analyzing the profitability comparison between Netflix and Disney's Direct-to-Consumer (DTC) segment becomes an intriguing study.
Netflix has been a dominant player in the SVOD (Subscription Video on Demand) domain and pioneered the concept of video streaming back in 2007, which is an important factor to consider. However, it remains to be seen whether Disney can transform its SVOD segment into a profit-generating business. The vast IP portfolio that Disney has acquired over several decades could prove to be a significant advantage in this endeavor.
Conclusion
Since its establishment in 1923, The Walt Disney Company has significantly expanded and strengthened its position as a leading entertainment powerhouse through a series of strategic acquisitions. The journey, as vividly captured in this article, highlights key milestones in Disney's evolution from an animation studio to a dominant force in the media and entertainment industry. Notable acquisitions include ABC Television, Pixar, Marvel, Lucasfilm, and notably the landmark purchase of 21st Century Fox. This latter acquisition, one of the largest in the industry, was instrumental for the development of Disney+ and significantly expanded Disney’s content library.
The list of acquisitions, extending from Miramax in the 1990s to acquiring the remaining stake in Hulu in 2023, illustrates Disney's aggressive strategy in expansion and diversification. Each acquisition has not only augmented Disney's portfolio but also bolstered its market dominance, marking its evolution into a global entertainment conglomerate. Although Disney's streaming services still face challenges, the company serves as a prime example of how mergers and acquisitions can be leveraged as core pillars of value creation.
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