DIS Walt Disney Co

By Erich Schwartzel and Joe Flint 

If Walt Disney Co. completes its $71 billion deal to buy most of 21st Century Fox, where do Homer and Marge Simpson fit in with Mickey Mouse and Luke Skywalker?

Disney has become the most powerful content creator of the modern era thanks to its control of some of the world's most popular franchises, including Frozen, Avengers, Star Wars and Toy Story. They typically start on film and are made into consumer products, theme-park rides and a soon-to-launch streaming service.

Fox, in comparison, has fewer top franchises, but it does have several key properties and brands that Disney can milk, assuming both companies' shareholders approve the deal on July 27 and foreign regulators give their blessing.

Here is a look at Fox's marquee properties and what Disney might do with them.

'The Simpsons'

The longest-running scripted series ever on prime-time television enters its 30th season this September and has generated billions of dollars in revenue from reruns and consumer products for Fox. It has even become a theme-park ride at Comcast Corp.'s Universal theme parks and the unlikely inspiration for golf wear in China, where Simpsons-themed clothing stores have popped up.

Disney is acquiring the Fox television studio, which makes "The Simpsons, " but not the Fox network, where it airs. (21st Century Fox and News Corp, parent company of The Wall Street Journal, share common ownership.)

In 2013, Fox's FXX cable channel, which Disney also is buying, acquired exclusive cable and online rights to reruns in a deal valued around $400 million.

Disney can sit back and count the money the show still generates or further integrate it. The theme-park deal with Universal, for instance, is locked up for several years but will eventually come up for renewal. The show also could move to Disney-owned ABC or the Disney Channel.

'Avatar'

James Cameron's 2009 3-D environmental parable remains the top-grossing movie of all time, with $2.8 billion world-wide. Fox and Mr. Cameron are betting on a continued public appetite more than a decade later with four planned sequels between 2020 and 2025, at an estimated total cost of more than $1 billion. "Avatar" is the kind of big-budget spectacle that Disney excels at releasing, but the studio will have to gauge how much moviegoers want of the property, which largely disappeared from public view between its release and the theme park opening.

"Avatar" is already part of Disney's theme-park business from a global licensing deal with Fox. The first use came at Orlando's Animal Kingdom theme park, where a $500 million Avatar-themed land helped to boost attendance 15%, according to the Themed Entertainment Association.

'X-Men'

While Disney owns the bulk of Marvel Comics characters, Fox has the big-screen rights to a few, including the X-Men and Fantastic Four teams. The studio has had moderate success making movies of those characters, most notably when it has opted for R-rated, adult-only treatments in "Logan" or "Deadpool" that contrast with Disney's PG-13 approach.

Disney has turned its $4 billion acquisition of Marvel Entertainment into a hitmaker with "Black Panther" and "Avengers: Infinity War." The company will likely look to unite all its Marvel characters in cinemas, though it remains to be seen if Disney will continue Fox's edgier approach.

Fox Searchlight

In five years, the company's Fox Searchlight art-house division won three best-picture Academy Awards for "12 Years a Slave," "Birdman" and "The Shape of Water" -- the most impressive record in Hollywood in recent history. Disney stopped making such mature movies for adults when it sold its Miramax unit in 2010.

Mr. Iger has repeatedly talked up Searchlight, which will become a supplier to the Hulu streaming service that Disney plans to steer more toward adults after the acquisition, said people close to the company. Some Searchlight films will likely still be released in theaters, if only to qualify for awards like the Oscars.

FX

Fox's FX cable channel has launched many critical and commercial successes. It is home to "American Horror Story" and "Atlanta," neither of which fit Disney's family-friendly programming, as well as the long-running comedy "It's Always Sunny in Philadelphia," which has been immensely popular and profitable for Fox. The network will give Disney its first presence in adult-targeted programming and likely be another supplier for Hulu.

Fox Library

In its 83-year history, Fox has produced some of Hollywood's most memorable movies, from "The Sound of Music" to "There's Something About Mary," and television shows including "Prison Break" and "The X-Files." Disney will inherit this library of thousands of titles, an automatic boon to its streaming efforts.

Fox has already turned these older titles into unusual revenue opportunities. Fox's consumer products division took a sentence from the 1993 baseball movie "The Sandlot" -- "You're killin' me, Smalls!" -- and pasted it on mugs, T-shirts and posters sold in stores today. Disney will have seemingly limitless opportunities to do the same with Fox's library, and, at a time when "Full House" and "Murphy Brown" are being brought back to life, it is conceivable that shows such as "Glee" or "In Living Color" could get rebooted.

Write to Erich Schwartzel at erich.schwartzel@wsj.com and Joe Flint at joe.flint@wsj.com

(END) Dow Jones Newswires

July 21, 2018 09:27 ET (13:27 GMT)

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