The current Major League Baseball offseason has been a giant nothingburger as clubs refuse to sign players asking for too much and players refuse to sign for less, but if you’re jonesing for some deal intrigue this new era of Hollywood free agency has been plenty fascinating. NBC’s Entertainment President just jumped ship to become the new boss at Amazon Studios. Similarly, Sony Picture Television’s Co-Presidents exited to oversee Apple’s $1 billion investment into original film and TV content, and they already managed to both hire Bryan Fuller and then watch him quit. Netflix tossed out a four-year, $100m offer to poach Shonda Rhimes away from ABC, and for a while that seemed like the biggest blockbuster of the season.

But then this happened:

And as a result now this has happened:

As a reminder, Disney hasn’t actually purchased Fox yet. The deal has yet to be finalized and approved by regulators, and until that happens it could still fall apart. For example, Comcast is said to be doing everything it can to disrupt the deal and top Disney’s offer. But because this is Disney we’re talking about here most assume the only thing that could truly stop this is the Department of Justice, which isn’t going to happen since Trump’s DoJ only cares about antitrust cases which would enrich his enemies (like CNN in the Time-Warner/AT&T deal), not his friends (like Rupert Murdoch in the Disney-Fox deal).

So, with Fox being more or less sold to Disney no one at Fox has any idea what happens next. Employees have been told to simply stay the course and behave as if nothing has changed, yet they’ve been told that people, like Gary Newman and Dana Walden, who might not be around anymore when the Disney deal goes through. Ryan Murphy is but the first of what will likely be many departures.

Murphy had been with 20th Century Fox Television since 2003, and he’s the guy currently responsible for American Crime Story, American Horror Story, Feud, and 911. Now, he’s going to get $60 million a year over the next half-decade to crank out what has become his signature: tonally challenged, anthology-leaning, bar-pushing TV shows featuring his repertory collection of preferred actors. Beyond that, the deal also includes a film development component, which he hasn’t done much of to this point, just directing Eat, Pray, Love in 2010 and then The Normal Heart for HBO in 2015.

Dana Walden and Gary Newman with Murphy. They reportedly offered him $35m to $40m per year to stay, but how, really, can you compete with Netflix’s bottomless pit of cash?

This particular Netflix deal won’t take effect until July, but Murphy is already in bed with them. Just as recently as a week ago, the streaming service scored something of a coup in winning the bidding wars over two Murphy-produced shows: The Politician (set to star Gwyneth Paltrow and Barbra Streisand) and Ratched (a One Flew Over the Cuckoo’s Nest prequel featuring Sarah Paulson as the titular nurse).

To some degree, this is inevitable. The history of corporate mergers and acquisitions, in general, is of the purchasing company promising nothing will change only to then change a bunch of shit and fire and/or buyout a lot of people. Even when that doesn’t happen, the merger still introduces a level of instability that inevitably leads many to find jobs elsewhere. To this point, THR says, “The industry chatter this week is that [Fox co-president Dana Walden] could move to run Murphy’s Netflix-based company if the executive does not get a top post once the Fox-Disney deal is finalized.”

Part of this is due to the sheer size of the deal. Nothing on this scale has happened in Hollywood history. Disney gobbles up companies all the time, but in Fox Bog Iger is buying a film studio, TV production studio, premium cable channel (FX), controlling interest in Hulu, regional sports networks, a stake in Sky TV, and an insanely vast back catalog of titles all in one. And as Iger himself confirmed one of the first moves will be to lay off a lot of Fox’s marketing and distribution people Disney doesn’t need.

Just a little financial context here:

In the past, when Disney bought Pixar, LucasFilm, and Marvel Studios there was an obvious talent component.

For example, as argued by Pixar’s former CFO Lawrence Levy in his book To Pixar and Beyond, Pixar shouldn’t have lasted. It was a failed computer software company bankrolled by Steve Jobs and stuck in an insanely one-sided deal with Disney to produce original movies with only a 10% cut of the profits. Once Toy Story came out and Pixar’s IPO filing went through the roof, though, the company forced a re-negotiation with Disney to secure better terms. It was an incredibly risky bet because Disney could have simply said no and used that moment to start building up its own computer animation division to ultimately render Pixar obsolete. However, Jobs and Levy knew Pixar had something Disney didn’t: John Lasseter.

Yes, his name is mud now due to his sexual misconduct, but back then Lasseter was the story genius injecting the soul back into animation, albeit entirely through computers. Disney didn’t have anyone as good as him, and he was far too loyal to be poached away. So, Pixar got the better deal it was asking for and co-billing on all of its movies. Years later, when Bob Iger, newly installed as Michael Eisner’s replacement, bought Pixar outright it was partially done as a way to finally bring Lasseter in-house and promote him to oversee both Pixar and Disney Animation.

Similarly, buying Marvel Studios meant buying Kevin Feige just as Lucasfilm meant going into business with Kathleen Kennedy, who hadn’t been with Lucasfilm that long but has produced more classic movies than just about anyone across a storied career.

In each case, Disney did its best to, ahem, not fuck with what had been working. That hasn’t always worked out, but when talent has been a key component of the purchase Bog Iger’s Disney generally backs away and empowers that talent to keep up the good work.

So, what talent is Disney absorbing from Fox? FX’s John Landgraf jumps out the most. It’s not hard to see a scenario where he is promoted to run a new FX-like version of Hulu and left to continue kicking ass at what he does. Gary Newman and Dana Walden have years upon years of relationships with talent built up from their time running Fox from 1999 to 2014 and Fox Television Group from 2014 to the present. Stacey Snider has spearheaded a creative turnaround at the film studio since 2014, pursuing a diversified release slate in stark contrast to Disney’s blockbuster/cinematic universe tract. Under Stephen A. Gilula and Nancy Utley, Fox Searchlight has become a perennial figure in the Best Picture race, backing Shape of Water, Three Billboards Outside Ebbing, Missouri, Jackie, Brooklyn, and The Grand Budapest Hotel.

But does Disney really want these people and the countless others who work for them? Or does it just want content to backfill into a Netflix-killing streaming service? Ryan Murphy isn’t waiting to find out. Who’s going to follow him out the door? Could this be the beginning of a brain drain away from Fox and over to Netflix and other streaming services? Or is Ryan Murphy a special exception? Time will tell, but one thing seems certain: everyone at Fox is probably already thinking about their exit strategy, even if they never have to use it.

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Posted by Kelly Konda

Grew up obsessing over movies and TV shows. Worked in a video store. Minored in film at college because my college didn't offer a film major. Worked in academia for a while. Have been freelance writing and running this blog since 2013.

3 Comments

  1. Honestly…I am kind of at a loss who the big talents at Fox supposedly are. I guess people in the business know, but there is nobody like Lassiter or Feige I could come up with, no big producer who would be known to the public.

    But Disney usually doesn’t f.. with whatever works. The people truly at risk are the ones which work in distribution aso, not the creative minds who have provided successful movies and TV shows.

    Reply

    1. The scale of it is still hard to grasp. I updated the article to put in a chart to visualize how Disney spent $4 billion apiece for Marvel and Lucasfilm, $7 bill for Pixar, and $54 bill for everything at Fox. The other three combined don’t even add up to a third of the Fox money pot.

      As such, it’s that much harder to really pinpoint the talent since we’re talking about so many different entities. That’s why I mostly stuck to the top brass. Of all of them, John Landgraf is probably the closest to a Feige figure in this deal. He’s the one who coined the phrase “Peak TV” and has emerged as kind of the wisest man in the room, overseeing shows like The Americans, Atlanta, Fargo, Ryan Murphy’s anthology shows, Legion, Sons of Anarchy, You’re the Worst, Justified, Louie, and The Shield while repeatedly warning that Netflix’s quantity over quality approach will eventually bite them in the ass. He seems perfectly groomed for a Lasseter-like promotion to maybe oversee both FX and Hulu.

      Outside of that, it’s sort of like what you said – if you don’t work in the industry, you probably haven’t heard any of the names I mentioned, and in the end whether or not some of the tap brass ends up jumping ship the one thing we know for sure (because Iger said as much) is that marketing and distribution people are going to be made redundant.

      Reply

  2. […] tried to give an acceptance speech after del Toro but had his mic cut off) and David Greenbaum, follow Ryan Murphy’s lead and jump ship to Netflix or Amazon then the Searchlight label Iger is absorbing into Disney might […]

    Reply

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