Suggestions to improve the companys financial and operating performance? How will moves toward direct-to-consumer and over-the-top services and the 21st Century Fox acquisition affect overall corporate performance?

The Walt Disney Company: The 21st Century Fox Acquisition and Digital Distribution In March 2018, the Walt Disney Company's $71.3 billion bid for 21 Century Fox was accepted. The original bid of between $52 and $60 billion had been filed in November 2017, but Comcast intervened with its own bid. When the dust settled in the competitive contest, the 21 Century Fox assets were split three ways (Exhibit 1). Disney acquired the film, television and cable entertainment assets of 21st Century Fox. Rupert Murdoch and his family retained Fox Broadcasting, which owned Fox News and Sports and twenty eight local television stations. Comcast acquired Sky TV, the European satellite broadcasting entity which it won for $39 billion in a one day auction against Disney and Fox. More specifically, Disney acquired the 20th Century Fox film library, including such franchises as Marvel and Avengers, and classics like Cleopatra and Avatar, as well as the current film and television studios; the FX and National Geographic cable networks in the US.; Star India, the Indian broadcast media company with over 700 million monthly viewers; and Fox's 30% share of the Hulu video on- demand subscription service and a share of Sky TV. Disney then recouped $15 billion through the sale of Fox's 30% share in Sky TV to Comcast. Regulatory pressure in the U.S. required Disney to divest twenty-one regional sports networks, and in Europe to sell off all its "factual channels," including History and Lifetime, which collectively recovered another $10 billion of the purchase price. The company then bought Comcast's 30% share of Hulu for $6 billion and AT&T's 10% stake for $1.4 billion to end up owning 100% of that video streaming business. When the dust had settled Disney's total net investment to acquire its share of the 21 Century Fox assets and Hulu, therefore, came to about $54 billion. Disney's intent with the acquisition was to enhance its "position as a premier, truly global entertainment company, and... [its] ability to offer innovative direct-to-consumer offerings."5 Specifically, it would make Disney the clear leader in traditional content businesses by owning additional movie franchises (Disney and Fox together would have had 28% of the North American box office between 1995 and 2018); exploit economies in film and television production and generate $2 * 21 Century Fox was the name of the parent corporation. 20th Century Fox was the original name of the film studio division. The original Disney acquisition of Marvel had not included the rights to some characters. b billion in cost synergies by 2021; broaden the scope of cable channels that could be offered in a bundle to cable networks; and expand its footprint outside the U.S. In early 2020, Disney announced that the "Mouse had killed the Fox" as it renamed the acquired assets "21st Century," dropping the Fox moniker. The deal would also increase Disney's sales to the final consumer. Historically, less than 25% of Disney's revenue came from a direct relationship with the end-consumer. This inhibited the ability to establish a deep customer relationship and use data to improve services, such as knowing a family's favorite Disney Princess when they booked a stay at Disney World. Acquiring Star India would substantially increase the end customer percentage, as would moving into digital distribution in the U.S.8 Indeed, after the acquisition, Disney quickly moved to introduce three video-on-demand subscription channels to be offered direct to the consumer (DTC). It would offer Hulu in direct competition with Netflix and HBO as an entertainment channel for adult audiences. The company then launched the Disney+ channel in late 2019. This featured at least five content channels, including Disney, Pixar, Star Wars, Marvel, and National Geographic, and would show new content, such as a Star Wars universe series "The Mandalorian", as well as movies targeted at the traditional Disney consumer, such as the live action version of "Mulan" available first on Disney+ for a $29.99 premium fee. To support the channel, it pulled all the classic Disney content from Netflix after the end of 2019, even though it had been receiving about $150 million per annum from Netflix for the broadcast rights to that material 0. Finally, it launched ESPN+, featuring college teams, local sports teams, and those sports that were underrepresented on the ESPN cable channel, such as lacrosse, so that it did not overlap with ESPN's current offerings." The three channels would be offered on the BAMTech platform, which Disney had acquired from Major League Baseball in 2017 for $1.6 billion, and was widely recognized as the best platform for streaming video at scale. The three streaming channels entered a field that had become crowded by 2020 with more than 400 services available around the world 2, PC Magazine listed forty video streaming competitors in their annual review, including free services, like Tubi, and alternatives to cable, like YouTube TV. Annual content budgets by major players exceeded $16-17 billion (Netflix), $6 billion (Apple) and $6-7 billion (Amazon). Disney proposed a budget of $3 billion for Hulu and $1.5 to $2 billion for Disney+ (Exhibit 2). Nevertheless, the launch of the channels was well received. The day of the announcement, Disney stock rose 12%, while Netflix stock fell by 5%-a net shift in market capitalization of about $50 billion (Exhibit 3). By mid-2020, Disney had accumulated over 100 million subscribers across the three channels, 14 As these moves were announced, Iger reorganized the firm's management structure. Former chief strategy officer Kevin Mayer was named president of a new DTC and international business unit. Bob Chapek, head of theme parks, was moved to chairman of the combined parks and resorts and consumer products business. Media networks and studios were left untouched by the reorganization. Then, in February 2020, Bob Iger announced that he was moving to become Executive Chairman, with Chapek taking over as CEO6, Kevin Mayer later left to become CEO of TikTok before stepping down as President Trump forced the sale of its U.S. operation 7. In early 2020, Disney's core businesses were badly affected by the covid-19 pandemic as theme parks and movie theatres were closed during the crisis (Exhibit 4)