A blockbuster, $US60 billion deal that could dramatically reshape the global entertainment business - with major implications for Australia's media landscape - could be announced this week.
Disney, the storied media and theme parks giant, was last week widely believed to be closing in on a deal to acquire assets from 21st Century Fox, the TV and entertainment conglomerate controlled by Australian-born billionaire Rupert Murdoch.
That's according to myriad well sourced reports emanating from the US business and trade press (including the Murdoch-owned Wall Street Journal).
Of course, in these situations, there is no guarantee a deal will be agreed and announced, let alone approved by regulators and shareholders. And other parties such as Comcast and Verizon have also been linked with the process.
Disney did not respond to an emailed request for comment for this article, while a spokesperson for Fox declined to comment.
Here in Australia, most of the discussion about this tantalizing, potential transaction has centred on what it means for the Murdochs.
That is understandable, since Rupert is one of the most successful and powerful business figures this nation has produced, and what his sons and heirs end up doing (one of them might join Disney now) has been a topic of conjecture for years
Yet there is another aspect to this strongly rumoured transaction that is getting less attention - and it might ultimately be much more significant.
It would finally put a company, and not just any company - one of the most iconic media and entertainment companies in history - in a position to take on Netflix, and maybe even win.
"This would lay down the gauntlet for the rest of the industry... with basically all smaller players looking much more exposed," Macquarie analysts wrote last week.
Netflix-killer
Disney, made famous by a cartoon mouse and its epynomous theme parks, probably controls the greatest collection of media assets in the world.
But like almost everyone else in media, it is facing stiff challenges from changes in consumer behaviour, as the internet destroys legacy business models.
Consumers are quitting pay TV (or not subscribing in the first place), and a slump at the box office suggests they aren't keen on going to cinemas as much as they used to either.
"Disney is not moving quickly and decisively," BTIG analyst Rich Greenfield, a critic of the company, wrote last week.
"Most of Disney's content creation is tied to legacy, inflexible business models. Disney movies go to theaters exclusively, 90 days later they enter home entertainment and several months later end up on Netflix."
Over the past two years, Disney shares have gone slightly backwards, while Netflix shares have gained 60 per cent.
Earlier this year, Disney announced plans to fight back. It said it will pull its content from Netflix in 2019, and launch a direct to consumer streaming service of its own.
It has already made one significant acquisition to further that aim.
Earlier this year, it paid $US1.6 billion to lift its stake in BAMtech, the backend streaming provider for (Disney controlled) 24-hour sports network ESPN, pro-wrestling company WWE, Major League Baseball and many others, to 75 per cent.
As things stand, Disney has signalled it wants to position its streaming service as a cheaper alternative to Netflix.
Greenfield thinks that is a mistake.
He thinks it should fully embrace the internet, and include all of its best brands and content on the service, including ESPN, the dominant sports channel in the US.
"Disney needs to swing big if it hopes to reposition its business model to align with where the consumer is going" he says.
A mega-deal with Fox, which would leave Disney with a truly ridiculous portfolio of content, might give the company reason to rethink its approach.
As US pop culure website the The Ringer last week pointed out, through a deal with Fox, Disney would re-unite two of Hollywood'smost popular and lucrative entertainment franchises (Marvel's action heroes, and Star Wars) under one roof.
The streaming landscape, which in Australia includes Netflix, Stan (part owned by Fairfax Media, which publishes this column) and Amazon, is starting to look crowded.
With the infrastucure and content in place, Disney has the chance to build something very compelling.
Going all out would be a bold and risky move - destroying (declining) pay TV revenue - but it might be necessary.
In any case, all of this may be trivial in comparison to the bigger picture.
Disney has an enviable track record with big deals. But so would the people sitting on the other side of the table.
Without knowing the (potential) deal structure, it is too early to know whether this really does signal the Murdoch family's retreat from the entertainment business - possibly due to family dynamics, possibly due to concerns about the internet.
But it would definitely illustrate Disney's desire to double down on it.
