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Would Antitrust Laws Doom a Disney/Fox Deal?

Yesterday, CNBC reported that the Walt Disney Company was in talks to acquire 21st Century Fox's film division, as well as most of its cable assets. Fox would retain its broadcast network, its cable news and sports stations, as well as its corporate-owned local television affiliates. Before the day was out, however, additional details came out, revealing that while Disney and Fox had been in discussions, they had broken down several weeks ago, and the deal is apparently dead.

But corporate deals have a tendency of coming back from the dead, especially in Hollywood. A couple of years ago, for instance, Marvel reached a deal with Sony to bring Spider-Man to the MCU, an arrangement that was announced shortly after reports surfaced indicating that deal was also dead. So there's still a very real chance Disney and Fox could reach an agreement, giving Disney -- and Marvel Studios -- control of the X-Men and Fantastic Four, as well as resolving some complicated distribution issues around the Star Wars franchise.

But, even if the parties agree, could a Disney/Fox deal actually go through? Or would potential antitrust issues sink the deal before it's done?

Because of the size of the deal, Disney and Fox would be required to file with the government before they could consummate the agreement. The pre-merger clearance process would very likely take a number of months, and the final deal might look very different from what the studios agreed to at the beginning, especially if Disney is required to sell Fox assets to get government approval.

Disney and Fox appear to have taken antitrust concerns to heart in structuring the deal. The most severe potential conflicts—between the ABC and Fox networks and between ESPN and Fox Sports—have been avoided entirely. With these stations—as well as Fox News—remaining with Fox, Disney and Fox's cable networks would complement each other well, offering few, if any, instances of direct competition. While Disney's cable networks tend to be geared toward younger viewers, Fox's FX family of networks target an adult audience. Disney would finally have an in-house destination for its more sophisticated programming, such as the Marvel Netflix series.

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