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  December 18, 2017

Disney Buys Fox, Will Viewers Pay the Price?

Disney's $52.4 billion purchase of 21st Century Fox shrinks the media landscape, increases Fox News' position, and could jack prices for consumers, says Craig Aaron of Free Press
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AARON MATÉ It's The Real News. I'm Aaron Maté. Mickey Mouse and Homer Simpson are joining forces in another case of major media consolidation. Walt Disney has agreed to buy the giant Fox for $52.4 billion. This mega-merger comes on the same day that the FCC voted to repeal net neutrality rules, which guarantee an equal and open internet. What does all this mean for the web and the media landscape? Joining me is Craig Aaron, president of the group Free Press. Craig, welcome. $52.4 billion, one of the biggest media acquisitions ever. What does this mean?

CRAIG AARON: Yeah, this is a really big merger. I think we're still getting all the details of what's going to be in there, but you have Fox selling off a big chunk of their entertainment holdings, so movie studios, cable channels, and pretty much everything that isn't either their Fox News operation, they're holding on to that, and they're holding on to their Fox Sports, the national Fox Sports. But everything else is moving to Disney. So this is a big giant chunk of our media industrial complex that's moving from one big company to another, and really giving Disney a whole lot of power over content. They will control an enormous number of cable channels, big libraries of content as they move and try to become a competitor to Netflix and who knows what else. Also really lock down a bunch of local sports programming. This becomes an even bigger company in Disney's hands and knocks out for them one of their major competitors.

AARON MATÉ What are the implications for this when it comes to the issue of net neutrality, this coming just on the day that, as I said, net neutrality was repealed?

CRAIG AARON: Well, it's going to be interesting, because in some ways this move suggests that Disney should start fighting for net neutrality, because Disney is not a company that owns the pipes. They don't own a cell phone company. They don't own a cable company. So they're going to be needing those companies, needing those internet companies, to have this content reach an audience. Clearly, they are supersizing, though, to give themselves a bigger hand in those negotiations.

So for your average consumer, what does that mean? That means you're probably going to be paying more, because suddenly Disney has even more premium channels that they can go to a cable company or another provider and say, "Hey, if you want the really good channels, if you want ESPN, if you want FX, you're going to have to give us a lot of money, and you're going to have to take a bunch of other channels that you don't want on your system as well."

AARON MATÉ The overall media landscape, can you talk about just the context that this comes in, in terms of how more and more giant companies are gobbling up slightly smaller giant companies?

CRAIG AARON: Well yeah, and I think we're going to see a lot more of that, unfortunately, because with one notable exception in the AT&T-Time Warner merger, the Trump administration has been signaling that they're open for business, and this is the time to get your mega-mergers. And as we know, as soon as a couple big companies start combining, all the other big companies think they need to get even bigger, and so these mid-range competitors, quasi-independent voices, all become targets. We're seeing it in every realm. Here you see it with Disney and Fox in sort of the entertainment-movie studio realm. But AT&T's still trying to buy Time Warner. You've got Sinclair doing its massive expansion in broadcasting.

You've got all these companies, and certainly the big internet platforms as well, all jockeying for a position to be a powerful new gatekeeper and in this sort of arms race with their competitors, none of which is good for us as viewers. We know as viewers, first of all, when big companies merge, we end up paying for it. It ends up costing us more. Secondly, we're really well-served when we have companies competing. You know, Disney, sort of at face value, suggests that it is a less ideological company. They're not pushing the conservative line that Fox News has, but the reality, as a viewer what serves you is those guys competing.

Those guys competing online for your eyeballs is what actually encourages them to make more creative content, more independent content, let new voices on, and that's why we've seen right now a lot of people say it's the golden era of television. That's because there's a lot of competition for your eyeballs, that Amazon and Netflix and others have brought to the table. But you go to a movie theater and it's all superhero movies, because there isn't as much competition and choice, and they're all driven by very narrow things like specific ... what sells in other countries and things like that. And you see a lot of independent film disappearing.

So these are the things we worry about in a deal like this, and it's complicated, because Disney might get into the what's called over-the-top market, where they're competing with Netflix and Amazon and others. That might be a good thing for viewers. On the other hand, this much content being under one roof almost certainly is going to hit us in the wallet.

AARON MATÉ Right, and I think that when it comes to competition, we need to sort of demarcate. When it comes to television shows, certainly, we all agree there's just too much good TV. I don't want to speak for everybody, but many people would agree there's just too many good choices, but when it comes to news and competition, it seems like one could make the critique that corporate news outlets have been competing for who could serve the ruling classes and their owners the most.

CRAIG AARON: No question.

AARON MATÉ So the fact that it gets narrowed even more is a grim portent.

CRAIG AARON: Well, and I think you also have to watch what Fox is holding on to. This has financial reasons, things they want to do with their company, but you see them very much holding on to their news product, and that is a news product that has done serious damage to our democracy. So once this deal is done, and once they have all the money for this deal, we're just going to have to watch Fox. What are they going to be buying up? Are they going for more newspapers? Are they going to go for more local television stations? Right now, their friends at Sinclair are trying to kill all the local media ownership limits.

So you could see Fox start to move even more aggressively in the news realm, now that they've gotten rid of The Simpsons and everything else that were sort of the things that Fox made that a lot of people liked. So I think that could be problematic in the news realm, and certainly when it comes to news, we don't have enough choices, we don't have enough independent voices, and at the local level, it's become completely consolidated in fewer and fewer hands.

AARON MATÉ I think that aspect of this Disney-Fox deal is perhaps the most ominous, the fact that it's going to strengthen Fox News's market position even more. I mean, Rupert Murdoch and his people are getting $52.4 billion.

CRAIG AARON: Yeah, it seems hard to believe they're just going to spend that on something that's going to be healthy for our democracy.

AARON MATÉ Well, we await to see. Craig Aaron, president of Free Press, thank you.

CRAIG AARON: Thanks a lot.

AARON MATÉ And thank you for joining us on The Real News.


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