A Fox in the Mouse House

The Walt Disney Co.’s $66.1 billion purchase of key 21st Century Fox assets will create a dominant force in the content business, with the combined company controlling 40% of the movie and TV studio output in the country, more than half of the regional sports networks available to customers and a growing stable of pay TV channels that can fuel future over-the-top offerings in the next two years. It will also provide a more compelling bundle come affiliate-fee renewal time.

Related: Disney Pulls Fox Trigger

While much has been written about the impact of the deal — one of the biggest in a while, not counting the pending AT&T-Time Warner merger pegged at $108.7 billion — here are five key points that could result from a pairing of the Fox and the Mouse.

Disney Could Create a Viable Alternative to Netflix: With the acquisition of Fox’s 30% interest in streaming video service Hulu, Disney will control 60% of the service after the deal is closed. While it would still have partners — NBCUniversal (30%) and Time Warner (10%) — Disney chairman and CEO Robert Iger hinted that majority ownership would possibly allow Disney to steer Hulu in a more aggressive direction. That could mean flowing more content through the service and pricing it differently. Iger has said Disney’s already-planned direct-to-consumer offerings — ESPN Plus in 2018 and a Disney-branded entertainment product in 2019 — would be priced lower than Netflix.

The Pay TV Model Is on Its Last Legs: Despite Fox’s protestations to the contrary, its decision to sell off most of its pay TV assets sends a signal that it believes the future lies in live sports and news. Disney’s take — accumulating more content to provide more choice to customers who want less — validates that point from the other side (more content means even the pickiest viewers will choose at least one of your networks).

Consolidation Among Remaining Networks Could Come: As Disney grows to Godzilla-like proportions, other networks may feel like they need to combine just to compete. But with few consolidators remaining in the sector — especially if AT&TTime Warner becomes reality — network parents such as AMC Networks, Viacom, Discovery-Scripps and other smaller companies may have to consider joining forces.

Job Losses Could Mount: Despite President Donald Trump’s contention that the Disney-Fox deal will lead to job creation, some analysts believe just the opposite will be true. Disney has identified about $2 billion in cost synergies as a result of the deal, a figure that BTIG media analyst Rich Greenfield believes will mainly be achieved through job cuts. Because of a massive overlap in the two businesses, Greenfield estimates Disney could shed 5,000 to 10,000 jobs worldwide as a result of the deal.

Future Big Media Deals Could Hinge on Being FOD (Friend of Donald): The president’s about-face on big media deals when they involve a friend — Rupert Murdoch has been a longtime supporter, and Fox News Channel is Trump’s favorite, and often his main, source of policy news — sends a strong signal to media CEOs: Lay off the “fake news” — i.e. anything critical of the administration — and your approval chances improve.