In mid December, Disney struck a deal to buy 21st Century Fox assets including film, tv and international businesses. The deal is worth $52.4 billion. According to Aishwarya Venugopal and Jessica Toonkel of Reuters the deal is expected to close in a year or a year and a half. In the meantime the Disney machine will begin to integrate the Fox assets into the Disney world of merchandising or the Disney store is going to expand. Both Michael Eisner and Bob Iger have done a masterful job of using Disney assets to expand the reach of the company. As part of the deal, Mr. Iger will be not be retiring but working for another two years.

The deal with Fox shareholders is they are to receive 0.2745 Disney shares for each share held and Fox shareholders should own 25% of Disney. Disney will buyback $20 billion of its shares to offset dilution. (this buyback will be helped by the new tax bill passed by the President as it reduces Disney corporate tax).

At present Disney breakdown of revenues is 44% from media networks (cable, tv and radio); 31% from the Disney parks (Florida and California); 14% from Studios; 9% from Consumer Products (if you bought toys for kids were they Disney brands?) and 2% interactive. The 21st Century Fox deal will drop the 44% down, increase the 14% and create a stronger reach in Europe.

Linking to dividend paying stocks, when many of the baby boom generation was growing up one of the shows on TV was the Wonderful World of Disney on Sunday evenings. Now days many families do not watch TV on Sunday evenings because there are more choices on the internet. In this case, Disney made the successful transformation from a small distributor to a global media giant. It has been relatively easy to participate in and something everyone could easily invest in. Investing does not have to be complicated, but it does require keeping up with the trends in the world.

There are more questions than answers, till the next time – to raising questions.