Disney has committed to pay a $2.5 billion breakup fee to 21st Century Fox if its $52.4 billion deal to buy most of Fox’s film and TV assets is blocked by federal regulators.
The agreement unveiled Thursday also provides for a breakup fee of $1.52 billion payable by either side if Disney or Fox pulls out of the transaction for reasons other than regulatory problems.
The hefty fee tied to the regulatory review process reflects the industry’s uncertainty about the Justice Department’s approach to media consolidation now that it is suing to block the AT&T-Time Warner merger.
According to Disney’s Securities and Exchange Commission filing, the acquisition pact expires on Dec. 13, 2018, but has provisions for up to a one-year extension.
The filing also revealed that Iger on Wednesday set his two-year extension to remain Disney chairman-CEO through the end of 2021. His previous contract ran through mid-2019. However, the contract extension deal gives Iger an out in 2019 if the Fox transaction has not closed.
Under the contract extension, Iger’s base annual salary will increase by $500,000 to $3 million. He also received nearly 1 million new stock awards and grants.