All anyone needs to know to understand the year Disney has had is that the company made a industry shifting $71.3 billion acquisition for Fox’s TV and film entertainment assets. Oh, and the studio had the biggest domestic box office hit of the year in “Black Panther,” and three of the top five highest grossing films of the year; oh, and five of the top 10 (as of publication).
By virtually any metric, 2018 has been an impressive year for Disney.
“Black Panther” opened in February and has remained relevant throughout the year, garnering $700.1 million at the domestic box office and $1.3 billion worldwide. Ryan Coogler’s franchise-launching film, which has been at the center of the Best Picture conversation for the Oscars, earned Disney-owned superhero studio Marvel its first Golden Globe nomination for Best Picture – Drama.
“Avengers: Infinity War” ($678.8 million), “Incredibles 2” ($608.6 million), “Ant-Man and the Wasp” ($216.6 million) and “Solo: A Star Wars Story” ($213.8 million) are also among the 10 highest-grossing films of 2018 in North America.
“Yes, it’s insane,” CFRA Research analyst Tuna Amobi said. “Disney over the last three years has been consistently outperforming or leading the market share at the box office and by large margins.”
There were set backs, however. Ava DuVernay’s “A Wrinkle in Time” underperformed to expectations, pulling in just $100.5 million domestically and squelching hopes for a new fantasy franchise. Another live-action family play, “The Nutcracker and the Four Realms,” went through two directors and extensive reshoots before stage-diving at the box office, with just $54 million.
And the pricey Han Solo spinoff “Solo” went through its own off-set drama before sputtering at the box office. The misfire also raised questions about the direction of Disney’s Lucasfilm division, which shelved all upcoming movies aside from the upcoming “Star Wars: Episode IX.”
The studio’s dominance over the other majors is expected to widen once Disney finalizes its multibillion-dollar deal to buy the majority of Fox’s TV and film assets after a bidding war with Comcast.
Disney ultimately shelled out more money for the assets than originally intended, which Amobi believes puts some pressure on the company to prove the deal’s worth to investors. And though Disney lost out on U.K. broadcaster Sky and had to sell Fox’s regional sports networks, the prevailing thought is that Disney won out in the end.
The acquisition should help strengthen Disney’s content offerings as it prepares to launch a standalone streaming service next year and capture more international market share. And fanboys and fangirls can rejoice in Marvel properties such as the X-Men and Fantastic Four now being to join the studio’s Marvel Cinematic Universe.
Following Disney’s fourth-quarter earnings conference call, BTIG analyst Rich Greenfield questioned the company’s commitment to focusing on its upcoming direct-to-consumer streaming service after the Fox deal has closed.
Disney CEO Bob Iger has said that the Disney+ streaming service is a priority, but the studio still receives a chunk of revenue from the theatrical and home video markets.
“They do not want to cannibalize existing revenue streams to propel their [direct-to-consumer] efforts,” Greenfield wrote in a blog post. “Iger’s comments [in November] bolster our view that Disney is making a mistake in launching Disney+, as it will weaken the reach of their brands and franchises vs. maximizing reach and boosting profits by selling to all the tech platforms that are increasingly hungry for Disney’s content.”
It’s true that Disney+ will be a big test for the company. Despite high expectations, Amobi said the decent start for ESPN+ and the new assets gained in the Fox acquisition should provide robust content for the service worldwide. “But the U.S. launch will be critical,” Amobi said.
Along with the franchises, brands and intellectual property picked up from Fox, Disney waltzed into a wealth of executive talent and knowledge.
On the TV side, the company saw a lot of maneuvering, as Disney TV chairman and co-chair of Disney media networks Peter Rice and Disney TV studios and ABC Entertainment chairman Dana Walden come over from Fox to take the reins.
The film division saw the exit of longtime Pixar and Walt Disney Animation head John Lasseter, after accusations of sexual harassment and assault surfaced in late 2017. The two divisions tapped veterans Jennifer Lee and Pete Docter to assume Lasseter’s duties, and with “Toy Story 4” and “Frozen 2” on the slate for 2019, there’s little cause for concern.
One of the biggest questions raised by the merger is how Disney will integrate Fox Searchlight and its team, who have released four of the past 10 Oscar winners for Best Picture. Co-chairs Stephen Gilula and Nancy Utley will report directly to studio boss Alan Horn, but the studio hasn’t given any clear guidance as to how the the banner will operate under a studio that has shied away from adult fare that has been the hallmark of the specialty label.