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Disney Agrees to $2.5 Billion Breakup Fee if Regulators Block 21st Century Fox Deal

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.

DISNEY-FOX: MEGA-MERGER
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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.

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