×

Disney to Lease Fox Lot for Seven Years (EXCLUSIVE)

The Walt Disney Co. will lease the Fox lot in Century City for seven years as part of the former’s pending acquisition of 21st Century Fox. Insiders told Variety that 21st Century Fox President Peter Rice informed employees of the lease agreement in a town hall meeting Thursday on the lot.

According to sources inside the meeting, Rice, president of 21st Century Fox, assured employees that no one who works on the lot would be relocated in the near future. Rice did concede that Disney will need to look at Fox’s businesses and that redundancies will be identified, leading to inevitable layoffs. But he did promise “big severance packages” along the lines of the buyouts the company offered two years ago. During those buyouts, employees were offered a month’s pay for each year they worked.

According to one insider, Rice spoke with employees for roughly an hour. The overall mood was characterized as positive, but there was also tangible uncertainty in the room.

Rice called the event “a momentous occasion,” adding, “I’ve been here for 30 years, and I never in my lifetime thought that Rupert would sell.”

On Thursday, it was announced that Disney had reached an agreement to purchase the bulk of Fox’s assets, including its television and movie studios, in a deal that values the Fox assets in the transaction at $66.1 billion, including $13.7 billion in 21st Century Fox debt, or $28 a share. The deal was unforeseen until rumors surfaced this fall that Fox chief Rupert Murdoch had begun entertaining the notion of selling off his company’s entertainment properties

“In uncertainty, there’s change, and in change, there’s opportunity,” Rice told employees. He said the new combined company would generate $20 billion a year in profits, which will allow it to “compete with the Amazons of the world.” He also dismissed the notion that the two companies were joining to challenge Netflix, noting that Netflix loses $2.5 billion a year. Rice also said the new Fox entity will only do business in the U.S. and will generate $3 billion a year.

Rice did not address how Fox Broadcasting, which is remaining in the slimmer 21st Century Fox alongside the company’s news assets and Fox Sports 1, will source content. However, insiders tell Variety that rumors abound on the lot speculating that profits from the sale to Disney could be used to buy a new studio.

Rice also predicted that the deal would take 12-18 months to close and emphasized that there would be no short-term effect on business operations.

As for pending approval of the deal from federal regulators, Rice told those assembled, “The lawyers believe it will pass.”

Other Fox television executives, including Fox Television Group co-CEO Dana Walden and FX Networks CEO John Landgraf also addressed staffers at the meeting. Stacey Snider, the head of Fox’s film division, has canceled a trip to Washington D.C. for the premiere of the film “The Post.” She has stayed in Los Angeles for a series of small meetings with employees to discuss the Disney deal, and is maintaining what one insider described as extended “office hours” with the door to her office left open.

Her message was: “We’re aligning with one of the world’s greatest companies, whose goal is to enable us to reach more people with more variety of content, which is great news and a huge opportunity for us. They also are going to enable us to continue doing what we love.”

On the film front, employees are being told that films are still being greenlit and that production on such major upcoming releases as “Gambit,” an X-Men spinoff, is expected to still commence in the coming months.

Like Rice, Snider has stressed that over the next year and a half until the deal closes, it will be “business as usual” and she told staffers that she expects them “to do what we do at a high level of excellence and with our typical swagger.”

More Biz

  • Alan Horn Bill Tanner

    Alan Horn to Keynote Variety Business Managers Elite Breakfast, Bill Tanner to Be Honored

    Bill Tanner will be recognized with Variety’s 2019 Business Managers Elite Award at the annual Business Managers Elite Breakfast presented by City National Bank, which takes place in Beverly Hills on Nov. 13. Co-chairman and chief creative officer of The Walt Disney Studios Alan Horn will be the keynote speaker in conversation with Variety editor-in-chief, [...]

  • Smoke haze covers the Sydney Harbour

    Australia's Seven West to Merge With Affiliate Prime Media

    Australia’s Seven West Media has agreed a deal to acquire regional broadcast group Prime Media. The move is a further step in the consolidation of Australia’s traditional media industry. The two companies announced on Friday that Seven will make the acquisition entirely through the issue of new shares to the owners of Prime. Both companies [...]

  • Ron Meyer

    Ron Meyer Files $10 Million Suit Over Forged Rothko

    NBCUniversal Vice Chairman Ron Meyer has filed a $10 million suit against two art dealers, claiming they sold him a forged Mark Rothko painting in 2001. Meyer accuses Susan Seidel and Jaime Frankfort of duping him into buying the work. According to the suit, he was told that it would be included in an official [...]

  • Former movie producer Harvey Weinstein (L)

    Harvey Weinstein Seeks to Call Expert on 'Recovered' Memories at Rape Trial

    Harvey Weinstein’s attorneys are seeking to call an expert on “recovered memories” at his trial on rape and sexual assault charges. The defense has filed a motion asking to call Deborah Davis, a psychologist and professor at the University of Nevada at Reno. Davis is a frequent defense witness. She co-authored an article in 2006 [...]

  • Tekashi 6ix9ine Docuseries Coming From Showtime

    Tekashi 6ix9ine Docuseries Coming From Showtime and Rolling Stone

    Showtime Documentary Films today announced a new limited docuseries profiling controversial rapper Tekashi 6ix9ine. Titled “SuperVillain” and inspired by the Rolling Stone feature written by Stephen Witt, the three-part series will trace how a New York City deli clerk named Daniel Hernandez became superstar rapper Tekashi 6ix9ine — who racked up 2.6 billion streams and [...]

  • Fader Label Logo

    Fader Label Signs Two New Acts, Boosts Staff

    The Fader Label, home to Clairo, Matt and Kim and others, announced two new signings today along with three new hires on its staff. Charlie Burg and Zachary Knowles have joined the label’s talent roster, while Carson Oberg has come aboard as general manager, Yasmine Panah as project manager and Josh Hymowitz as label coordinator. They [...]

More From Our Brands

Access exclusive content