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For Disney’s Iger, a Bold Move That Will Define His Legacy

Robert A. Iger has made several high-profile purchases as Disney’s chief executive, but his deal for 21st Century Fox dwarfs them all.Credit...Qilai Shen/Bloomberg, via Getty Images

LOS ANGELES — Robert A. Iger is nothing if not consistent.

As chief executive of the Walt Disney Company, Mr. Iger, 66, awakens at 4:30 every morning, and every time he announces plans to retire from the Magic Kingdom, he ends up extending his reign, as he did on Thursday for a fourth time.

But the most important consistency that Mr. Iger has exhibited since taking over Disney in 2005 may involve becoming the corporate equivalent of a guardian selected by protective fathers. “He is tremendously good at it,” said Mario Gabelli, the longtime media investor.

He formed a deep relationship with Steven P. Jobs, persuading the Apple impresario to part with Pixar Animation Studios, even after Mr. Jobs clashed with Mr. Iger’s predecessor, Michael D. Eisner. Disney bought Pixar in 2006 for $7.4 billion, and Mr. Iger now sits on the Apple board. Next up was Isaac Perlmutter, who entrusted Mr. Iger with his baby, Marvel Entertainment. Everyone wanted Lucasfilm. But it was Mr. Iger who persuaded George Lucas to sell his “Star Wars” studio to Disney for $4 billion in 2012.

Mr. Iger’s crowning achievement — should he be able to win regulatory approval and pull off an integration — came on Thursday when Rupert Murdoch entrusted much of his life work not to his own sons but to Mr. Iger. Disney paid $52.4 billion for the bulk of Mr. Murdoch’s 21st Century Fox in a deal with ripple effects from Hollywood and Silicon Valley to audiences worldwide.

“Bob has consistently been the most strategic and curious in the industry,” said Peter Chernin, Mr. Murdoch’s former top lieutenant and chief executive of the Chernin Company, which has built a vast portfolio of digital businesses. “He’s the guy least interested in maintaining the status quo and the one genuinely trying to wrestle with where the world is going.”

Mr. Iger, who started his career in the 1970s as a weatherman, has stumbled at times while running Disney. Several of his smaller acquisitions, among them the video-focused Maker Studios and Playdom, an online game company, have been misfires. Efforts to plan out his succession have resulted in the departures of two talented senior executives.

Disney has also recently contended with subscriber losses at ESPN and ratings turbulence at ABC. John Lasseter, the Pixar co-founder who became Disney’s top animation executive, said last month that he would step aside for a six-month “sabbatical” because of behavioral “missteps.”

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Mr. Iger, left, and Rupert Murdoch, who agreed to sell most of 21st Century Fox to Disney for $52.4 billion.Credit...The Walt Disney Company Handout/European Pressphoto Agency

But Disney has mostly soared under Mr. Iger’s leadership, noted Mr. Gabelli, whose Gamco holds roughly $350 million in Fox shares. Since Mr. Iger took over Disney, annual profit has more than tripled, totaling $8.98 billion in the fiscal year that ended in September.

“To get Disney, Marvel, Pixar and Lucasfilm to even operate on the same planet is a herculean task,” said Jeffrey A. Sonnenfeld, a dean of leadership studies at the Yale School of Management. “As media barons go, I would put Bob in a category of one.”

Now, however, just as Mr. Iger approaches what appears to be the end of his career — his new retirement date is in late 2021 — he has made an eye-popping bet that will, for better or worse, make everything he has already accomplished seem like a footnote. The 21st Century Fox acquisition is Disney’s largest, surpassing its 1995 purchase of Capital Cities/ABC for $19 billion, or roughly $31 billion after adjusting for inflation.

Mr. Iger intends to use the Fox businesses, which include the 20th Century Fox studio and a chain of 22 regional sports networks, to supercharge a plan to reposition Disney.

To a large degree, ESPN, bought as part of the Capital Cities deal, has powered Disney for two decades. But traditional television, built on third-party cable and satellite subscriptions, is now in decline as people watch more content online. Mr. Iger sees Netflix-style subscription streaming services as a new growth engine and has announced plans to rely on three of them, with each benefiting from the Fox assets. (Two of the services will be new, and one will be Hulu, which Disney would now control.)

Success is far from guaranteed.

Netflix and Amazon have a huge head start. Disney will have to learn new businesses on the fly. It will be difficult for Disney to integrate 21st Century Fox for reasons of size and culture: Fox is much rowdier. James L. Brooks, a creator of “The Simpsons,” which will move to Disney in the merger, on Thursday posted an image on Twitter “with respect.” It showed an angry Homer Simpson strangling Mickey Mouse.

While most investors and analysts cheered the merger, Doug Creutz, an analyst at Cowen and Company, wrote in a research note that Disney’s bid to compete with Netflix was “a lost cause” given that tech companies “have deep pockets and no mandate to turn an economic profit in the near term.” Other analysts praised Mr. Murdoch for exiting Hollywood while criticizing Disney for buying traditional television assets — cable channels like FX and satellite television providers like Sky.

Also, the deal needs approval by antitrust regulators. While President Trump seemed to give it his endorsement on Thursday, pushback has already begun.

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“As media barons go, I would put Bob in a category of one,” one observer said of Mr. Iger.Credit...Justin Lane/European Pressphoto Agency

“I’m concerned about the impact of this transaction on American consumers,” Senator Amy Klobuchar, Democrat of Minnesota, said in a statement on Friday. Ms. Klobuchar, the Senate antitrust subcommittee’s ranking member, asked for a hearing to ensure “appropriate oversight.”

Mr. Iger, who declined to comment for this article, expressed confidence on Thursday about winning the approval of regulators.

“If they look at it from a consumer point of view,” he said, “they should quickly conclude that the aim of this combination is to create more high-quality product for consumers around the world and to deliver it in more innovative, more compelling ways.”

As Hollywood began to get its head around the acquisition, it was seen as either the sad ending of an era or the exciting beginning of one.

The film business has not seen significant consolidation in generations — perhaps not since 1935, when 20th Century Pictures and Fox Film merged to form 20th Century Fox, going on to deliver classics like “How Green Was My Valley,” “The Sound of Music” and “Wall Street.” Now that Disney is a content colossus, analysts expect a wave of Hollywood mergers, as companies like Viacom, CBS, Sony, Lionsgate and Metro-Goldwyn-Mayer look to gain scale.

Some in Hollywood, including many film executives at Fox, which faces downsizing under Disney control, saw the merger as the waning of the traditional entertainment business: Disney wanted Fox’s assets to accelerate its push to deliver television shows and movies over the internet and fight Apple, Amazon and Netflix in the streaming video wars.

Filmmakers, writers and producers began to moan that all of their creative impulses would now be subject to algorithm approval.

But others had the opposite perspective: By supersizing Disney — the only major pieces of 21st Century Fox not included in the deal were Fox News, the FS1 sports channel and the Fox broadcast network — Mr. Iger had engineered Hollywood’s best chance for survival. After all, rather than being swallowed by a Silicon Valley giant, Fox’s creative businesses will be managed by an entertainment veteran.

“With this deal, Bob is really saying, ‘You can all make bets on platforms and algorithms,’” Mr. Chernin said. “‘I am going to make my bet on content and control how that content reaches consumers.’”

A version of this article appears in print on  , Section A, Page 1 of the New York edition with the headline: With Fox Deal, Chief of Disney Tests His Magic. Order Reprints | Today’s Paper | Subscribe

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