What Happens When Disney Buys Your Company?

The Disney-Fox deal must seem like an amazing dream come true for fans of X-Men, Fantastic 4, Avatar, The Simpsons, etc., but it might also seem like a nightmare for employees within both organizations. It’s fun to imagine what happens when the X-Men join the Avengers, but it’s also easy to overlook the reality on the ground for employees and contractors at Disney and Fox, because an acquisition like this tends look very different from the inside.

I know because I’ve been there. I was working at a Silicon Valley, social-gaming, start-up called Playdom when Disney bought the company for $765 million in 2010 — to establish Disney’s footprint in social and mobile gaming. My experience at Playdom might or might not be replicated at Fox, but it’s worth sharing as a cautionary tale. The big thing to remember is, a lot of people inside and outside of these companies are going to be affected, probably in ways they don’t expect.

According to THR, as many as 5-10K jobs could be lost at both Disney and Fox, relative to job redundancies and/or projects that are now stalled, halted, or killed. So, pretend that you’re a grip or a screenwriter on a project like Fox’s Gambit (an X-Men film, starring Channing Tatum), which is suddenly twisting in the wind. Odds are that a lot of Fox projects will remain up-in-the-air until this deal is finalized. I’m sure Marvel’s Kevin Feige is carefully weighing Gambit to see how or if it fits into his MCU design. Currently, Marvel produces three films per year, but the bigger question is whether they can pump out two or three more? If not, it’s back to the shelf for Gambit (and all of the people currently working on that project).

I joined Playdom just days after the Disney purchase was being announced. It was incredibly exciting news, until it wasn’t. At the time, there were about 15 game projects at varying stages of development, including several live games on Facebook. Within a few weeks following the announcement several projects grinded to a halt, hiring was frozen, and rumors began flying. Disney had a 6-month, hands-off approach that was intended to avoid these problems, but it only served to inflame fears and tensions.

Then came the feeding frenzy, and it was ugly. Disney authorized Playdom to create 2 or 3 new games using Marvel and Pixar characters (Lucasfilm had not been purchased yet). The entire organization effectively went to war with itself to get their hands on these properties. I pitched a Marvel game for Facebook, which was quickly greenlighted… and then an executive handed it to another team, because politics. I left the company six months later, along with a lot of other employees — brain drain is often a serious problem with these kinds of deals. Playdom was renamed to Disney Interactive, many of the remaining developers moved to other parts of Disney, and four years later Disney closed down what was left of the studio.

Obviously, Playdom and Fox are completely different organizations with far different focuses, but I suspect that some of these patterns will repeat — I’ve seen it happen at other high-tech and entertainment companies over the years, it’s not that unusual (unfortunately).

Deals like Disney-Fox are meant to create efficiency, reduce competition, and accelerate project development. To achieve these goals a lot of changes and cuts must occur, and that means layoffs for many folks. Hopefully Disney has learned a lot since Playdom, but it’s a massive, massive company that moves like a battleship. Best to steer clear of battleships, in my experience (unless you’ve got a bigger battleship, of course).

SOURCE: THR, NY Times, Variety