Disney has a wholesome, family-friendly image. Will acquiring Fox create a culture clash?

Dec. 14, 2017 5:02 AM PT

Stewie Griffin, meet Mickey Mouse.

The foulmouthed toddler of Fox’s animated series “Family Guy” is a diaper-clad troublemaker whose florid vocabulary and diabolical machinations probably would get him kicked out of the Magic Kingdom.

But with Walt Disney Co.’s game-changing plan to acquire key 21st Century Fox assets, including its movie and TV production studios, Stewie could soon find himself a corporate cousin to Disney’s wholesome cast of animated characters from movies including “Aladdin” and “Zootopia.”

20th Century Fox has consistently pushed the envelope in the realm of mainstream TV and cable programming, exploring the dark side in FX’s “American Horror Story,” and bawdy comedy with Fox’s “Family Guy” and “The Simpsons.” On the movie side, the studio recently scored big with R-rated titles such as “Deadpool” and “Logan.”

The entertainment industry will be waiting to see if Disney’s squeaky-clean image ends up clashing with Fox’s edgier aesthetic. While some experts predict problems, others see a smoother transition, citing Disney’s track record of allowing multiple brands to flourish with relative autonomy within the enchanted castle.

“I don’t think there’s a risk of the Disney label being diluted,” said Martin Kaplan, who worked at Disney for 12 years in feature films and is now a professor at the USC Annenberg School for Communication and Journalism.

“The issue is similar to what happens in a supermarket if you have more products, more kinds of cereal,” he said. “My guess is that [Disney] will welcome that ability to produce pictures for lots of different audiences.”

Under Chief Executive Bob Iger, Disney has embraced family-friendly tentpoles with its acquisition of Pixar in 2006. The blockbusters that the studio releases under Marvel Entertainment and Lucasfilm don’t go beyond a PG-13 rating.

Fox has pursued a more diversified entertainment mix, especially at its cable properties.

Its FX and FXX networks have earned critical acclaim and awards for their edgy programming, said Todd Juenger, an analyst of Bernstein & Co.

“They are also filled with violence, language, and sexual themes that absolutely do not fit with the ‘Disney’ brand,” he wrote in a recent investor note. FX’s highly touted limited series “The Assassination of Gianni Versace: American Crime Story,” which debuts in January, features a graphic murder and delves into the world of drugs and male escorts.

On the movie side, Fox has historically been all over the map. For every “Miracle on 34th Street” and “The Sound of Music,” there is a gory sci-fi thriller such as “Alien” or a raunchy comedy such as “There’s Something About Mary.”

Years ago, Disney was in the business of releasing movies for mature audiences. In the 1990s, the company released R-rated movies through its Miramax and Hollywood Pictures divisions. Disney gave the Weinstein brothers a lot of freedom to run Miramax, which it acquired in 1993, allowing them to distribute movies such as “Pulp Fiction” and “Trainspotting.”

But it wasn’t always smooth sailing. They clashed over titles deemed too controversial, including the gay-themed “Priest.” Disney refused to let Miramax release “Dogma” in 1999 due to the movie’s irreverent take on Catholicism.

Under Iger, Disney has mostly relinquished its positions in the mid-budget movie market. The company shut down Hollywood Pictures in 2009 and sold off Miramax a year later. Touchstone Pictures has lain mostly dormant in recent years. The once-prolific label that Disney launched in the ’80s to reach beyond the kid market was behind such hits as “Pretty Woman” and “Enemy of the State.”

With the Fox acquisition, Disney is once again in R-rated territory. In a conference call with analysts Thursday, Iger said that he sees no problem releasing 20th Century Fox’s upcoming “Deadpool 2” with an R-rating, featuring a wise-cracking and randy superhero.

“We think there might be an opportunity for a Marvel-R brand for something like ‘Deadpool,’ ” he said. “As long as we let the audiences know what’s coming, we think we can manage that fine.”

Disney’s focus in the short term will be on launching its own streaming services to compete with Netflix, and filling the new consumer pipeline with content. The studio will ultimately have to decide how it will balance kid-oriented Disney titles and properties owned by Fox.

On Thursday, Iger suggested Hulu, the streaming service owned by Disney and other studios, would be the destination for more adult-oriented fare, including content from Fox.

“This will come down to their streaming needs. They need to have a greater variety of content that goes beyond Pixar, Marvel and the Disney-branded content,” said Tom Nunan, a lecturer at the UCLA School of Theater, Film and Television and a veteran movie and TV executive.

He said he remains optimistic about the Disney-Fox marriage. “The Disney company has done a good job at maintaining the cultures at Pixar and Marvel.”

At $52.4 billion, the Fox deal easily dwarfs any acquisition Disney has undertaken. Some experts say that the 20th Century Fox brand could remain intact and operate under its existing name, at least in the near term, though layoffs are expected to eliminate operational redundancies. Disney expects to realize about $2 billion in cost-saving synergies.

Fox is still reeling from a round of buyouts last year that saw a few hundred employees leave its movie and TV divisions.

The combining of the two corporate cultures will depend largely on whether top 20th Century Fox executives such as Stacey Snider on the film side and Dana Walden in TV will stay on. Walden has led Fox’s TV division for two decades, with Gary Newman. Snider joined Fox in 2014 and took over the film studio this year.

Through all the corporate drama, the Disney super-brand probably will emerge unscathed even after swallowing a major competitor.

“Once you have a high-trust brand like Disney, it has a lot of flexibility,” said Jamie O’Boyle, a senior analyst at the Philadelphia-based Center for Cultural Studies and Analysis.

“I don’t think this is going to change its core culture at all — the ‘Walt’ culture.”

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@DavidNgLAT

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UPDATES:

Dec. 15, 6:05 p.m.: This article was updated throughout with additional commentary.

8:30 a.m. : This article was updated to include comments from Disney CEO Bob Iger to analysts.

This article was originally published at 5:00 a.m. on Dec. 14.