TV and radio networks, production studios, and publishers
Reviewed by Margaret JamesFact checked by Jared EckerReviewed by Margaret JamesFact checked by Jared Ecker
Walt Disney (DIS) is a household name in family entertainment and a leading international media conglomerate. Founded in 1923 as the Disney Brothers Cartoon Studio by brothers Walt and Roy Disney, the company has a market capitalization of about $177 billion. It generated a net gain of $3.4 billion on revenue of $88.9 billion during its 2023 fiscal year (FY), which ended Sept. 30, 2023.
Under the leadership of Bob Iger, the company operates through the following business segments: Entertainment, which includes media networks, studio entertainment, and direct-to-consumer and international; Sports, including ESPN; and Experiences, which includes parks, experiences, and products.
Below, we look in more detail at the company’s seven largest acquisitions.
Key Takeaways
- Disney uses acquisitions to expand its reach in media and entertainment.
- Disney became the first media company to have a presence across filmed entertainment, cable television, broadcasting, and telephone wires.
- The company owns major names like 21st Century Fox, Lucasfilm, and BAMTech.
Disney’s Acquisition Strategy
Acquisitions are a major vehicle of growth for Disney—and have been over the past three decades. One example is Studio Entertainment, the foundation upon which the company was built.
While Disney produces high-quality video content under its name, it has used acquisitions to become the owner of intellectual property (IP) rights to its blockbuster film and TV franchises. It bought the following names:
- Lucasfilm, which owns of the “Star Wars” franchise
- Marvel Entertainment, the owner of a long list of Marvel heroes, including Spider-Man and Iron Man
- Pixar, creator of the “Toy Story” and “Cars” franchises and other hits
The company also distributes content through three major acquired brands—ABC, ESPN, and 21st Century Fox—as well as through its own Disney Channel.
The acquisition of a majority stake in BAMTech in August 2017 and the purchase of 21st Century Fox in March 2019 were key deals in the company’s launch of its digital content streaming service Disney+.
1. 21st Century Fox
- Type of Business: Global media and entertainment
- Acquisition Price: $71 billion
- Acquisition Date: March 20, 2019
21st Century Fox emerged from the 2013 split of News Corp., the sprawling publishing and entertainment empire owned by media mogul Rupert Murdoch. In the breakup, the publishing arm of the company retained the name News Corp. (NWS) while the entertainment division, including the 20th Century Fox studio, was spun off into a separate company named 21st Century Fox.
When Disney acquired the company in 2019 for $71 billion, the entertainment business was renamed TFCF Corp., and many of the news assets were spun off into a new, separately owned public company called Fox (FOX).
Through that series of deals, Disney became the owner of a basket of prized global franchises, including the 20th Century Fox film and TV studios, cable networks FX and National Geographic, international TV business Star, and a 30% interest in Hulu, increasing Disney’s interest to 60%. The company purchased the remaining 33% stake in Hulu from Comcast in 2023. The deal was worth $8.61 billion.
Disney also retained perpetual rights to certain Fox brands, including 20th Century Fox and Fox Searchlight. The acquisition significantly augmented Disney’s ability to provide more content and entertainment options to meet growing consumer demand.
2. Capital Cities/ABC
- Type of Business: Media
- Acquisition Price: $19 billion
- Acquisition Date: July 31, 1995
Capital Cities/ABC was formed in 1985 when media firm Capital Cities Communications acquired American Broadcasting Company for $3.5 billion.
Disney’s $19 billion purchase of the company in 1995 was considered the second-largest corporate takeover ever, bringing together two of the world’s leading media and family entertainment companies. Through the deal, Disney acquired TV stations, radio stations, a percentage of ESPN, The History Channel, A&E Network, Lifetime Television, and a publishing group.
This acquisition transformed Disney into the first media company with a major presence in the four key distribution systems of filmed entertainment, cable television, broadcasting, and telephone wires (through a joint venture with three regional phone companies). The deal also expanded Disney’s overseas presence, as Capital Cities/ABC was already distributing ESPN abroad.
Important
In November 2019, Disney launched the Disney+ streaming service, a paid subscription service that competes with the likes of Netflix, Hulu, and Apple TV.
3. Pixar Animation Studios
- Type of Business: Computer animation studio
- Acquisition Price: $7.4 billion
- Acquisition Date: Jan. 24, 2006
Pixar was created in 1986 when Steve Jobs, Apple’s co-founder, bought the computer animation division from Lucasfilm, which made major progress in perfecting animated film technology. Under Jobs, Pixar turned into the world’s premier animated film producer. It created “Toy Story,” the world’s first computer-animated feature film, and other hits like “Finding Nemo.”
Disney’s $7.4 billion purchase of Pixar in 2006 made it an instant leader in animated films. Under Disney, Pixar has produced films such as “Cars,” “Ratatouille,” “WALL•E,” and several sequels to “Toy Story.”
4. Lucasfilm
- Type of Business: Film and TV production company
- Acquisition Price: $4.1 billion
- Acquisition Date: Oct. 30, 2012
Lucasfilm was founded in the San Francisco Bay Area in 1971 by filmmaker George Lucas. The studio is best known for creating and producing the blockbuster “Star Wars” and “Indiana Jones” franchises and has been a leader in developing special effects, sound, and computer animation.
Disney’s acquisition of the company in 2012 gave it access to the distribution rights of those high-grossing franchises. Disney also leveraged those franchises through its theme parks and resorts, such as the “Star Wars: Galaxy’s Edge”-themed entertainment area at Disneyland and Disney World.
5. Marvel Entertainment
- Type of Business: Entertainment
- Acquisition Price: $4 billion
- Acquisition Date: Aug. 31, 2009
The precursor to what would become Marvel Entertainment was founded in the 1930s under the name Timely Comics. The comic book publisher went through various name changes, different ownerships, filed for bankruptcy, and developed into a premier creator and publisher of entertainment media with a library of 5,000 characters, including Spider-Man, Iron Man, X-Men, Captain America, and the Fantastic Four.
Disney leveraged its $4 billion purchase of the company to accelerate the number of movie releases starring Marvel characters, including box office hits such as “The Avengers” (2012), “Iron Man 3” (2013), “Black Panther” (2018), and many more.
6. Fox Family Worldwide
- Type of Business: Media and entertainment
- Acquisition Price: Approximately $5.2 billion ($2.9 billion in cash, plus the assumption of $2.3 billion in debt)
- Acquisition Dates: July 23, 2001 (announced); Oct. 24, 2001 (completed)
Fox Family Worldwide was formed in 1995 by a joint venture (JV) between Haim Saban and Fox Broadcasting, an affiliate of billionaire Rupert Murdoch’s News Corp. Before being acquired by Disney, the company had become one of the world’s leading vertically integrated global family and children’s entertainment companies.
Through the deal, which occurred in late October 2001, Disney acquired the Fox Family Channel in the U.S., which had about 81 million subscribers, as well as Fox Kids channels worldwide.
The acquisition was seen as a move by Disney to keep pace with its competitors during a period of consolidation in the media industry. It also gave Disney the rights to 6,500 episodes of children’s and family-friendly programming, as well as rights to show Major League Baseball games. Disney renamed the network ABC Family Channel. It has since been rebranded as Freeform.
7. BAMTech LLC
- Type of Business: Streaming services
- Acquisition Prices: $1 billion in two installments (33% stake); $1.6 billion (additional 42% stake)
- Acquisition Dates: Aug. 9, 2016; Aug. 8, 2017
BAMTech LLC originated out of Major League Baseball Advanced Media (MLBAM), the interactive media and Internet company formed by Major League Baseball (MLB).
The company first began livestreaming MLB games in 2002. In 2007, it launched a video streaming app on Apple’s (AAPL) iTunes store. Over the next eight years, BAMTech launched the WWE Network streaming service, HBO NOW, the PlayStation Vue livestreaming TV service, and more. In 2015, the company was spun off from MLBAM.
In 2016, Disney acquired a 33% minority stake in BAMTech, which by then had become a global leader in direct-to-consumer streaming services, data analytics, and commerce management. The deal came with an option for Disney to acquire majority ownership, which it exercised a year later, purchasing an additional 42% stake for approximately $1.6 billion in 2017. The acquisition of a majority stake in BAMTech provided Disney with the assets that it would use to launch video streaming services ESPN+ in 2018 and Disney+ in 2019.
Disney Diversity & Inclusiveness Transparency
As part of our effort to improve the awareness of the importance of diversity in companies, we have highlighted the transparency of Disney’s commitment to diversity, inclusiveness, and social responsibility. The chart below illustrates how Disney reports the diversity of its management and workforce. This shows if Disney discloses data about the diversity of its board of directors, C-Suite, general management, and employees overall across a variety of markers. We have indicated that transparency with a ✔.
| Race | Gender | Ability | Veteran Status | Sexual Orientation | |
| Board of Directors | ✔ | ||||
| C-Suite | ✔ | ✔ | |||
| General Management | ✔ | ✔ | |||
| Employees | ✔ | ✔ |
How Does Disney Make Money?
Disney is a global entertainment company. It generates most of its profits from its Parks, Experiences, and Products division. This segment includes theme parks, resorts, cruise lines, broadcast television networks, and related products. The majority of its sales are generated through its Linear Networks segment. As one of Disney’s entertainment divisions, it includes names like Disney, ABC, and National Geographic.
How Can I Invest in Disney Stock?
Disney is a public company. This means you can buy the company’s shares through a broker-dealer or an online brokerage account. You can also invest in Disney indirectly by purchasing shares of a mutual fund or exchange-traded fund (ETF) that has the company in its portfolio.
Does Disney Pay a Dividend?
Disney pays its shareholders a dividend. The company declared a dividend of $0.45 per share. This was payable on July 25, 2024. Shareholders have the option to get the dividend in cash or have it reinvested in The Walt Disney Company Investment Plan.
The Bottom Line
Most people think of Mickey Mouse or Disney World when they hear the name Disney. But the company is more than just its proprietary characters and theme parks. The company has built a solid reputation increasing its foothold in the entertainment industry through strategic acquisitions. Names like 21st Century Fox, Lucasfilm, and BAMTech help the company boost its profits and sales while solidifying its position in film, streaming, television, and telephone wires.
Read the original article on Investopedia.