The deal between Walt Disney Co. and 21st Century Fox to sell the latter’s media assets won’t close for another couple of months but already the deal is making waves in the entertainment industry. Burbank-based Disney announced just about a year ago its intention to acquire Fox’s movie and television studios, cable channels and Sky television service in Europe along with a controlling stake in streaming service Hulu in a deal valued at $52 billion. The amount later jumped to $71.3 billion after Comcast Corp. entered the negotiations in an unsuccessful bid to buy the Fox assets. Comcast later bought Fox’s share of Sky television for $15 billion. The family trust of Rupert Murdoch, executive chairman of Fox owner News Corp., owns shares worth $12 billion under the deal, but some portion will be paid in Disney shares. Transformative for industry Tuna Amobi, an analyst with CFRA Research, called the deal transformative for the entertainment industry and will likely solidify Disney as the dominant Hollywood studio. “You have two of the preeminent content providers coming together to create a combined entity that will add even more significant scale to Disney’s entertainment content franchises,” Amobi said. One of the interesting things about the transaction was the bidding war between Disney and Comcast which ended up making the valuation paid by Disney in line with what analysts expected, given the desirability of the assets, Amobi noted. One of the rationales for such a valuation is how the business of entertainment content consumption has changed over the last few years with direct-to-consumer offerings in streaming services, Amobi said. “In that new paradigm, the more content you have the more advantaged you can be and able to leverage more scale and compete against the likes of Netflix, Hulu and Amazon and also the technology companies like Apple that are also investing aggressively in content,” he added. Neil Macker, an analyst with Morningstar Inc. in Chicago, said in a research note on Disney that the company was entering into a transitional fiscal year with Chief Executive Robert Iger focusing on the Fox deal and the launch of Disney+, the new subscription streaming service. “We continue to believe the launch of Disney+ and the closing of the Fox acquisition will help boost the firm’s positive trajectory for the near future,” the research note said. Macker, however, was not thrilled with the Disney+ name but remained positive about the potential impact of the service when it launches late next year. “Iger disclosed that the firm will be bringing Disney+ to Europe and will be producing content locally in order to fulfill any government quota requirements,” Macker said in his note. “He also noted that the interface for the service will be brand-centric and tailored toward specific content.” Stable leadership Iger’s future with Disney hinges on integrating the company with Fox, a process that has already started, Amobi said. The company has announced a restructuring of its broadcast and cable businesses and the addition of Fox executives to its studio entertainment management team assuming the deal closes. Iger was going to step down as Disney’s chief in July 2019 but extended his contract for another two years. He originally announced he would retire in March 2015. That was later extended to June 2016 to coincide with when he would step down as board chairman. In October 2014, he extended his contract an additional two years, through 2018, as the Disney board sought to keep Iger in place based on the company’s financial and creative success. But Amobi said he would not rule that Iger could stay on beyond the 2021 date. “We have seen this movie before,” he added. “He was supposed to exit and he extended the contract before the Fox deal was announced. “I don’t think investors would be upset if he were to stay longer,” Amobi continued. “They may want him to stay longer because of the track record he has amassed as CEO, which has been very good to say the least.” During Iger’s 13-year tenure, he has overseen the company’s acquisition of Pixar Animation Studios, Marvel Entertainment and LucasFilm Ltd.; built a theme park in China; saw market capitalization increase from $46 billion to $172 billion; and the share price hit $100 for the first time ever.