Two of the most famous brands in entertainment, Fox and Disney, are bidding farewell to Century City.
Walt Disney confirmed Tuesday that it will vacate the prestigious Fox Studio lot, which has been a major resident since Disney purchased a large portion of Rupert Murdoch’s 21st Century Fox entertainment assets in 2019. However, it was characterized by a provision that Disney would move as a tenant for at least seven years.
Disney’s lease for space at Fox’s Pico Boulevard property in Los Angeles will expire in March next year.
The company has no plans to renew its lease and will instead leave by the end of the year, said a Disney insider who is not allowed to publicly speak.
The move puts pressure on owner Fox Corp. to find new tenants in soundstages and office spaces where films and television shows have been created for generations. Famous films that brought it to life include The Miracles of 34th Avenue, The Seven Year Itch, and The Sound of Music. The lot also features rooms of writers from Fox Sports, Fox Broadcast Network and “The Simpsons.”
According to regulatory filings, Fox receives $50 million a year to lease the space.
Disney is the biggest tenant, but Fox executives say they are bullish on finding new residents.
“Fox Slot is second to none in terms of location, premium production, and available production facilities,” Fox said in a statement Tuesday.
Disney has gradually cut Fox DNA since the transaction. In 2020, Disney retired from “Fox” branding from logos and assets acquired from Fox, minimizing disruption with assets that remained part of the Murdoch Empire, including Fox News.
Since the acquisition, dozens of television studios and FX network executives have remained in Lott’s longtime offices. It is a popular perk for those living in Los Angeles’ West Side, allowing them to maintain a short commute.
For the past six years, Fox Building 103, located on the southeast corner of Lott, has been a Disney post base.
However, Disney has taken steps to move its team to Burbank over the past year. Disney has its own historic studio lot and an adjacent complex that houses ABC and Disney animations.
Disney’s goal is to bring together a creative hub for television groups, including executives who remained in Fox Slot, according to knowledgeable people who were not allowed to comment.
The company declined to comment on plans for Disney-owned television productions remaining in the Fox Slot, including the dramas “9-1-1” and “9-1-1: Lone Star,” produced by Ryan Murphy, Brad Falchuk and Tim Minnea.
The early outline of the Disney Fox Transaction – coordinated by Disney’s CEO Bob Iger and Murdoch – had imagined the Century City compound as one of the assets included in the sale to Disney.
However, Murdoch’s eldest son, Lachlan, who serves as Fox’s chief executive, claimed that Shirley Temple, Marilyn Monroe and Mel Brooks had embraced his company in the best real estate they once worked for. (Studio founder William Fox purchased 99 acres of land between Santa Monica Boulevard and Pico Boulevard 101 years ago. After being financially assaulted in the 1963 film Cleopatra, Fox sold most of the backlot.
Lachlan Murdoch, whose office is in the Art Deco Management Building, saw Fox Lott as part of his company’s heartbeat. He also recognized the value of soundstages and supplemental production facilities in high demand for production to support the launch of several streaming services.
However, production in Los Angeles has not recovered from the 2023 writers and actors’ strike, and many filming is seduced by other states and countries with generous tax incentives.
The shift comes as Fox seeks approval for the city for a $1.5 billion expansion of its Century City location. This is a project that envisages the addition of more than 2 million square feet of new building space, including multiple new soundstages, post-production facilities and a new office building in front of the star.
As part of its redevelopment, four historic bungalows near the centre of the lot will be moved to another location near Olympic Boulevard.
Disney’s departure does not stifle Fox’s ambitious plans for the expansion of Century City, according to executives who were not allowed to speak publicly. The Fox project is in the preliminary approval stage with the city.
Disney scooped up valuable franchises through Fox’s acquisitions, including “Avatar,” “Alien,” Marvel’s “X-Men,” and “Deadpool.” Disney also won management of Hulu, a streaming service that maintains its home base in Santa Monica.
Still, some analysts and investors say Disney is being overpaid and overpaid for the property. This undermined the Burbank Entertainment giant in 2020 when the Covid-19 pandemic hit.
That spring, Disney took on additional debt after theme parks were closed, cinemas were closed, and sports leagues were called timeouts.
Disney has been trying to cut costs for the past few years.
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