Boardwalk Times: Stories from the Seashore - What If Disney and Time Warner Merged in 2016?
Back in 2016, Time Warner CEO Jeff Bewkes and Disney CEO Bob Iger had breakfast and discussed the possibility of creating an unstoppable entertainment juggernaut.
Welcome back to Boardwalk Times: Stories from the Seashore! In this month’s newsletter, we will be discussing a fun business “What If…?” of a Disney and Time Warner merger, some key points from Disney Q2/the Disney Upfront/Disney at MoffettNathanson Summit, and LINKS OF THE MONTH.
What If Disney and Time Warner Merged in 2016?
Last May, I discussed the possibility of a WarnerMedia-NBCUniversal merger and I focused specifically on how the sheer amount of intellectual property would bolster Universal Parks and Resorts. One year later and it’s time to talk Warner yet again on this Disney-centric newsletter.
After reading Tinderbox: HBO’s Ruthless Pursuit of New Frontiers (the book is the oral history of HBO). I learned a fascinating tidbit that at one point a Disney and Time Warner merger was a possibility. It’s a crazy business “What If…?” and if it would’ve happened, things would’ve never been the same. For starters, imagine Disney owning HBO? That would be crazy in itself.
Back in 2014, 21st Century Fox would bid for Time Warner. Rupert Murdoch wanted Time Warner and all its assets. 21st Century Fox offered $80 billion but Time Warner rejected the bid (as the deal would’ve kept The Murdochs in charge plus there were some other issues with the overall bid). If Murdoch would’ve succeeded the media landscape would have looked extremely different. Rupert Murdoch comes back into play in all this later on.
Time Warner CEO Jeff Bewkes originally wanted Apple to acquire them. Which could you blame him? Apple, one of the most successful companies on Earth, buying you out isn’t a bad exit. Having the backing of what would become a company with a trillion-dollar market cap would’ve been amazing. Apple didn’t end up going through with the acquisition because it didn’t want to send the wrong message to its shareholders. Apple would later get into the entertainment business in 2019.
Jeff Bewkes met with executives on the regular from Facebook, Apple, Amazon, Netflix, and Google. Bewkes had the foresight that the media landscape was changing and that big tech was going to have deep pockets and dominate Hollywood. He knew Time Warner would be a prime takeover target. From all indications, Bewkes seemed to be hunting for someone to acquire Time Warner before someone else snatched it up.
Enter the king of acquisitions himself, Bob Iger.
In 2016, Bob Iger and Jeff Bewkes met for breakfast to discuss a possible merger. Disney and Time Warner would form an entertainment juggernaut. Bewkes said that the tech companies would come after Disney and Time Warner, but together they would be too big for a hostile takeover. Iger mulled over the idea but he didn’t want to add to Disney’s cord-cutting problem by adding CNN, Cartoon Network, TBS, TNT, and others to Disney’s ABC, ESPN, Disney Channel, and Freeform.
Bewkes thesis on the deal was correct though. Disney and Time Warner would be too big to get bought. They would be the strongest movie studio in the world, the biggest library of content, and the best family and IP content. It would be an embarrassment of riches from an IP standpoint. Disney characters, Pixar, Marvel, Star Wars, DC, Looney Tunes, Harry Potter, Cartoon Network, and throw in HBO too among others.
The combined company would have even more strategic advantages that weren’t just IP-related. The combined company would have access to the huge Warner film and TV library, the Disney Parks and stores, and the HBO sub-base to kick off the streaming wars. Disney/HBO/Hulu bundle would have been the most dominant bundle in history. Disney+ would stick to family content. Hulu for general entertainment and sports. HBO for that premium experience.
The deal would also have some overlap so in this alternate timeline it would be fascinating to see how Disney would address certain Time Warner businesses. Would HBO completely abandon its sports efforts? How would TBS and TNT fit in? Would CNN just become an extension of ABC News? How would Disney manage the Warner franchises? Not to mention how a gigantic move like this would’ve created a massive ripple effect and spending spree in Hollywood.
Despite having a nice combo figured out. The Mouse wasn’t in the cards for Time Warner. AT&T would acquire Time Warner on October 22, 2016, for $85 billion. Bob Iger would then call Jeff Bewkes to discuss a merger but it was too late. Bewkes was expecting Disney was going to put in a counter-offer for Time Warner but they never did. Iger wished Bewkes well. AT&T would officially enter the content wars as the owner of Time Warner, which would be renamed WarnerMedia. Only a few years later, AT&T would sell WarnerMedia to Discovery.
Disney would go on to buy 21st Century Fox (another company that wanted to acquire Time Warner), something that Bewkes says isn’t nearly as good a combination. I have to agree to a point but realistically Time Warner and Disney would’ve been a true monopoly. The word is overused a lot but Disney and Time Warner in every sense of the world would’ve dominated entertainment.
Some takeaways from this extraordinary “What If…?” deal
Disney theme parks would be flush with an insane amount of intellectual property. Universal would have to hold on tight to its existing intellectual property and strike deals with whoever they could like Netflix, Nintendo, 21st Century Fox, ViacomCBS, Hasbro, etc just to continue to compete.
A Roger Rabbit film would be greenlighted immediately with Mickey Mouse and the Looney Tunes characters.
Would they have renamed the company to Disney-Warner Company? What about calling the corporate parent “The WD” because well Walt and Warner plus D for Disney? Or would Disney still just be the name similar to how the Fox deal went down?
What assets would Disney sell after the deal? I’m imagining they would trim it down quite a bit similar to what they did after 21st Century Fox.
What would 21st Century Fox do if it missed its chance to merge with Disney?
A Disney-Warner merger would’ve hurt Hollywood a lot more than Disney-Fox.
Would the DOJ actually stop this deal? I mean having Marvel and DC under one roof is a red flag from just a comic publishing standpoint.
Disney buying Warner over Fox means they never get The Simpsons, the rest of the Marvel characters, Avatar, and Blue Sky Studios.
It’s always fun to ponder these business deals that never happened. It’s strange to think how things would’ve been different for Disney if this would’ve went down. Just think where we are at in the streaming wars right now. A Disney-Warner combination would’ve been the outright winner by a country mile. Think about how this would’ve affected the theme parks. It would have been a colossal change.
For many it’s a good thing that this deal never happened but for some others I’m sure they spend some time thinking about this gamechanging “What If…?”
Disney Q2, Upfront Fun, and MoffetNathanson Conference
Despite all the recent political turmoil, Disney was able to have a normal Q2 earnings call. Chapek revealed that Disney overall has passed 205 million subscribers. Disney+ sits at 137 million as they eye adding a cheaper ad-tier option. Chapek also discussed Disney’s synergy machine. (Read my full analysis and recap on Q2 here)
Bob Chapek made an appearance at the Disney Upfronts and said Disney is “the most powerful force in the industry.”
Disney announced a major deal with the XFL. One has to wonder if The Rock could be eyeing an overall Disney deal down the line?
Marvel once again delivered at a Disney event. It’s funny how reliant Disney has become on Kevin Feige and Marvel Studios to create buzz and bring in the special content — even for its marketing and advertising partners.
Disney CFO Christine McCarthy took part in a Q&A at the MoffettNathanson Conference. Yes, she forgot what the Galactic Starcruiser was called but there were some important takeaways from this Q&A. Plus she continues Disney’s streak of bringing up Encanto, and this time it was specifically talking about how Encanto could be integrated into the parks in both a transitional way and a permanent way.
Plus, despite Disney’s political turmoil over the past few months. Disney Careers still lists Imagineering jobs relocating to Florida by late 2024. So, the Lake Nona Disney Parks, Experiences, and Products campus is full steam ahead, don’t let the Reedy Creek political theater make you think otherwise.
PODCAST PLUGS — This is the Waycast: Obi-Wan Kenobi, Moon Knight Finale, and Doctor Strange Discussion
Moon Knight Finale: (Apple Podcasts) (Spotify)
Doctor Strange in the Multiverse of Madness Discussion: (Apple Podcasts) (Spotify)
Join Sara Edwards and Giovanni Delgadillo every week as they break down and analyze Obi-Wan Kenobi. (Apple Podcasts) (Spotify)
LINKS OF THE MONTH
— Great interview with Michael Waldron, the screenwriter behind Doctor Strange in the Multiverse of Madness. (Variety)
—Meet The Disney Imagineer Bringing 'Guardians Of The Galaxy' To Epcot (Bustle)
— LARPing Goes to Disney World. (The New Yorker)
— Disney’s Florida Fiasco Is Still Going On, As President Biden Weighs In. (Deadline)
— Bob Chapek met with Jeffrey Katzenberg. Michael Eisner met with Geoff Morrell. What is this a chapter from DisneyWar 2? (Business Insider)
—Vanity Fair did an extremely newsworthy profile about Star Wars as it expands its Disney+ footprint. (Vanity Fair)
— Meow Wolf plans a Texas expansion. (Boardwalk Times)
— Kevin Mayer and Tom Staggs’ Candle Media acquire Exile Content and ATTN. (The New York Times)
— Bob Iger Investing: The Former Disney CEO Invests In Funko, a toymaker, and GoPuff, a food delivery service.
— A fascinating look at Disney’s Kareem Daniel. (The Ankler)
— Guardians of the Galaxy: Cosmic Rewind overview and why it takes EPCOT into a new era. (Boardwalk Times)
Thank you all for reading and supporting Boardwalk Times: Stories from the Seashore.
We will see you next month! Please follow us on social media @BoardwalkTimes and visit boardwalktimes.net for more commentary, news, and opinions on the worlds of Disney and themed entertainment.