Bob Iger on Disney-Fox Deal Close: ‘I Wish I Could Tell You That the Hardest Part Is Behind Us’

CEO hints at more potential layoffs: “Some areas still require further evaluation,” he says

Last Updated: March 20, 2019 @ 6:07 PM

Bob Iger celebrated the close of the Walt Disney Company’s $71.3 billion acquisition of 21st Century Fox assets last night in a memo to staff that addressed the “challenging work” that still lies ahead: integrating Fox into the Mouse House. And that’s a process the Disney chief hinted could include more potential layoffs.

“I wish I could tell you that the hardest part is behind us, that closing the deal was the finish line rather than just the next milestone,” Disney’s chairman and CEO wrote in the memo, which was sent after the deal officially closed just after midnight on the East Coast. “What lies ahead is the challenging work of uniting our businesses to create a dynamic global entertainment company with the content, the platforms and the reach to deliver industry-defining experiences that will engage consumers around the world for generations to come.”

With the deal wrapped up, Disney will take over ownership of 20th Century Fox film and TV studio, cable networks FX, FXX and National Geographic, and certain cable and international television assets. Disney also acquires Fox’s 30 percent stake in Hulu, giving it majority control. The new assets should strengthen Disney’s position as a content behemoth, especially as it launches Disney+ later this year, its own streaming competitor to Netflix.

Disney will now have to start what figures to be an arduous process of merging the two giant companies, which is expected to result in massive layoffs. The company has already set some of its senior leadership under the new structure, which include Peter Rice and Dana Walden coming over from Fox.

“We’ve spent the past year exploring the new opportunities and synergies generated by bringing our two legendary companies together,” Iger wrote. “Leaders across both organizations have worked closely together to understand how to best unlock this potential and unleash innovation and creativity to generate long-term growth. We’re confident in our integration strategy and in our ability to execute it effectively; and we’re inspired and energized by the new possibilities.”

“Our integration process will be an evolution, with some businesses impacted more than others,” he continued. “We’ve made many critical decisions already, but some areas still require further evaluation. We may not have answers to all of your questions at this moment but we understand how vital information is, and we’re committed to moving as quickly as possible to provide clarity regarding how your role may be impacted.”

Walden will serve as chairman of ABC Entertainment and the newly-named Disney Television Studios, which encompasses ABC Studios, ABC Signature, 20th Century Fox TV and Fox 21. John Landgraf and Gary E. Knell who serve as chairmen of FX and Nat Geo Partners, respectively, will report to Rice, who is chairman of Walt Disney Studios and co-chair of Disney Media Networks.

Ben Sherwood, who had been serving as co-chair of Disney Media Networks and the president of the Disney-ABC Television Group, will leave the company.

On the film side, Emma Watts, as well as several other Fox film executives, will make the move to Disney’s studio entertainment management team. Watts will report directly to Disney studio head Alan Horn and will serve as vice chairman for 20th Century Fox Film and president of production at Fox. Nancy Utley and Stephen Gilula will stay on as co-chairmen for Fox Searchlight and will also report directly to Horn, along with Elizabeth Gabler, who will serve as president of production at Fox 2000.

Read Iger’s memo in full below.

I’m proud to announce the acquisition is complete and 21st Century Fox is now part of The Walt Disney Company. I’d like to welcome our new colleagues, and thank employees on both sides of the deal for your patience and perseverance as we worked through the lengthy acquisition and regulatory process.

As you know, Disney has never been short on ambition. We’ve never been satisfied with the status quo, and our vision for this transformative era is our boldest yet. We are rapidly transforming our company to take full advantage of evolving consumer trends and emerging technology in order to thrive in this new and exciting time.

Our acquisition of 21st Century Fox was driven by our strong belief that the addition of these great businesses, brands, franchises and talent will allow us to move faster, reach farther and aim higher – especially when it comes to building direct connections with consumers.

I wish I could tell you that the hardest part is behind us; that closing the deal was the finish line, rather than just the next milestone. What lies ahead is the challenging work of uniting our businesses to create a dynamic, global entertainment company with the content, the platforms, and the reach to deliver industry-defining experiences that will engage consumers around the world for generations to come.

We’ve spent the last year exploring the new opportunities and synergies generated by bringing our two legendary companies together. Leaders across both organizations have worked closely together to understand how to best unlock this potential and unleash innovation and creativity to generate long-term growth. We’re confident in our integration strategy and in our ability to execute it effectively; and we’re inspired and energized by the new possibilities.

Our integration process will be an evolution, with some businesses impacted more than others. We’ve made many critical decisions already, but some areas still require further evaluation. We may not have answers to all of your questions at this moment, but we understand how vital information is, and we’re committed to moving as quickly as possible to provide clarity regarding how your role may be impacted.

Having been on both sides of numerous acquisitions during my career, I have a deep appreciation for how this one impacts everyone involved, on both a personal and professional level. I understand the challenges, and I ask for your continued patience in the days to come as we combine this collection of great assets to create the world’s premier entertainment company.

Bob