Elijah Abrams
Mouseketeer
- Joined
- Feb 6, 2020
Is that plateau the vMVPD providers like YouTube TV, Fubo, Philo, Sling, and Hulu+Live TV?
DIS Shareholders and Stock Info ONLY
- Thread starter hhisc16
- Start date
HokieRaven5
DIS Veteran
- Joined
- Mar 5, 2020
Pretty sure those all still pay the linear providers for access to their channels so they would fit more under the category of ”Cable”, some of those already cost as much as a monthly cable subscription.
I’d put those in with your DirectTV, FiOs, Xfinity, [insert local cable provider]
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
Advertising rates are under pressure. That's where linear makes money. and where streaming will have to in the future.
Elijah Abrams
Mouseketeer
- Joined
- Feb 6, 2020
Well which "plateau" were you thinking of?
HokieRaven5
DIS Veteran
- Joined
- Mar 5, 2020
One where there’s a more stable amount of users on what is currently cable such as those platforms, and a stable amount of users on streaming and everything isn’t still in flux
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
Nothing new here.
https://www.ft.com/content/4630ad12...traffic/partner/feed_headline/us_yahoo/auddev
Bob Iger’s Disney comeback hampered by TV woes and box office flops
Streaming losses forecast to eat into profits when media group reports results this week
Christopher Grimes in Los Angeles and Ortenca Aliaj and Anna Nicolaou in New York
8/7/23
https://www.ft.com/content/4630ad12...traffic/partner/feed_headline/us_yahoo/auddev
Bob Iger’s Disney comeback hampered by TV woes and box office flops
Streaming losses forecast to eat into profits when media group reports results this week
Christopher Grimes in Los Angeles and Ortenca Aliaj and Anna Nicolaou in New York
8/7/23
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
https://finance.yahoo.com/news/disney-creates-task-force-explore-100717483.html
Disney creates task force to explore AI and cut costs - sources
Dawn Chmielewski and Krystal Hu
Tue, August 8, 2023 at 5:07 AM CDT
Walt Disney has created a task force to study artificial intelligence and how it can be applied across the entertainment conglomerate, even as Hollywood writers and actors battle to limit the industry's exploitation of the technology.
Launched earlier this year, before the Hollywood writers' strike, the group is looking to develop AI applications in-house as well as form partnerships with startups, three sources told Reuters.
As evidence of its interest, Disney has 11 current job openings seeking candidates with expertise in artificial intelligence or machine learning.
The positions touch virtually every corner of the company - from Walt Disney Studios to the company's theme parks and engineering group, Walt Disney Imagineering, to Disney-branded television and the advertising team, which is looking to build a "next-generation" AI-powered ad system, according to the job ad descriptions.
A Disney spokesperson declined to comment.
One of the sources, an internal advocate who spoke on condition of anonymity because of the sensitivity of the subject, said legacy media companies like Disney must either figure out AI or risk obsolescence.
This supporter sees AI as one tool to help control the soaring costs of movie and television production, which can swell to $300 million for a major film release like "Indiana Jones and the Dial of Destiny" or "The Little Mermaid." Such budgets require equally massive box office returns simply to break even. Cost savings would be realized over time, the person said.
For its parks business, AI could enhance customer support or create novel interactions, said the second source as well as a former Disney Imagineer, who declined to be identified because he was not authorized to speak publicly.
The former Imagineer pointed to Project Kiwi, which used machine-learning techniques to create Baby Groot, a small, free-roaming robot that mimics the "Guardians of the Galaxy" character's movements and personality.
Machine learning, the branch of AI that gives computers the ability to learn without being programmed, informs its vision systems, so it is able to recognize and navigate objects in its environment. Someday, Baby Groot will interact with guests, the former Imagineer said.
AI has become a powder keg in Hollywood, where writers and actors view it as an existential threat to jobs. It is a central issue in contract negotiations with the Screen Actors Guild and the Writers Guild of America, both of which are on strike.
Disney has been careful about how it discusses AI in public. The visual effects supervisors who worked on the latest "Indiana Jones" movie emphasized the painstaking labors of more than 100 artists who spent three years seeking to "de-age" Harrison Ford so that the octogenarian actor could appear as his younger self in the early minutes of the film.
Disney has invested in technological innovation since its earliest days. In 1928 it debuted "Steamboat Willie", the first cartoon to feature a synchronized soundtrack. It now holds more than 4,000 patents with applications in theme parks, films and merchandise, according to a search of the U.S. Patent and Trademark Office records.
Bob Iger, now in his second stint as Disney's chief executive, made the embrace of technology one of his three priorities when he was first named CEO in 2005.
Three years later, the company announced a major research and development initiative with top technology universities around the world, funding labs at the Swiss Federal Institute of Technology in Zurich and Carnegie Mellon University in Pittsburgh, Pennsylvania. It closed the Pittsburgh lab in 2018.
Disney's U.S. research group has developed a mixed-reality technology called "Magic Bench" that allows people to share a space with a virtual character on screen, without need for special glasses.
In Switzerland, Disney Research has been exploring AI, machine learning and visual computing, according to its website. It has spent the last decade creating "digital humans" that it describes as "indistinguishable" from their corporeal counterparts, or fantasy characters "puppeteered" by actors.
This technology is used to augment digital effects, not replace human actors, according to a source familiar with the matter.
Its Medusa performance capture system has been used to reconstruct actors' faces without using traditional motion-capture techniques, and this technology has been used in more than 40 films, including Marvel Entertainment's "Black Panther: Wakanda Forever."
"AI research at Disney goes back a very long time and revolves around all the things you see being discussed today: Can we have something that helps us make movies, games, or conversational robots inside theme parks that people can talk to?" said one executive who has worked with Disney.
Hao Li, CEO and co-founder of Pinscreen, a Los Angeles-based company that creates AI-driven virtual avatars, said he worked on multiple research papers with Disney's lab while studying in Zurich from 2006 to 2010.
"They basically do research on anything based on performance capture of humans, creating digital faces," said Li, a former research lead at Disney-owned Industrial Light & Magic. "Some of these techniques will be adopted by Disney entities."
Disney Imagineering last year unveiled the company's first initiatives in an AI-driven character experience, the D3-09 cabin droid in the Star Wars Galactic Starcruiser hotel, which answered questions on a video screen and learned and changed based on conversations with guests.
"Not only is she a great character to interact with and always available in your cabin, which I think is very cool, behind the scenes, it's a very cool piece of technology," Imagineering executive Scott Trowbridge said at the time.
Disney creates task force to explore AI and cut costs - sources
Dawn Chmielewski and Krystal Hu
Tue, August 8, 2023 at 5:07 AM CDT
Walt Disney has created a task force to study artificial intelligence and how it can be applied across the entertainment conglomerate, even as Hollywood writers and actors battle to limit the industry's exploitation of the technology.
Launched earlier this year, before the Hollywood writers' strike, the group is looking to develop AI applications in-house as well as form partnerships with startups, three sources told Reuters.
As evidence of its interest, Disney has 11 current job openings seeking candidates with expertise in artificial intelligence or machine learning.
The positions touch virtually every corner of the company - from Walt Disney Studios to the company's theme parks and engineering group, Walt Disney Imagineering, to Disney-branded television and the advertising team, which is looking to build a "next-generation" AI-powered ad system, according to the job ad descriptions.
A Disney spokesperson declined to comment.
One of the sources, an internal advocate who spoke on condition of anonymity because of the sensitivity of the subject, said legacy media companies like Disney must either figure out AI or risk obsolescence.
This supporter sees AI as one tool to help control the soaring costs of movie and television production, which can swell to $300 million for a major film release like "Indiana Jones and the Dial of Destiny" or "The Little Mermaid." Such budgets require equally massive box office returns simply to break even. Cost savings would be realized over time, the person said.
For its parks business, AI could enhance customer support or create novel interactions, said the second source as well as a former Disney Imagineer, who declined to be identified because he was not authorized to speak publicly.
The former Imagineer pointed to Project Kiwi, which used machine-learning techniques to create Baby Groot, a small, free-roaming robot that mimics the "Guardians of the Galaxy" character's movements and personality.
Machine learning, the branch of AI that gives computers the ability to learn without being programmed, informs its vision systems, so it is able to recognize and navigate objects in its environment. Someday, Baby Groot will interact with guests, the former Imagineer said.
AI has become a powder keg in Hollywood, where writers and actors view it as an existential threat to jobs. It is a central issue in contract negotiations with the Screen Actors Guild and the Writers Guild of America, both of which are on strike.
Disney has been careful about how it discusses AI in public. The visual effects supervisors who worked on the latest "Indiana Jones" movie emphasized the painstaking labors of more than 100 artists who spent three years seeking to "de-age" Harrison Ford so that the octogenarian actor could appear as his younger self in the early minutes of the film.
Disney has invested in technological innovation since its earliest days. In 1928 it debuted "Steamboat Willie", the first cartoon to feature a synchronized soundtrack. It now holds more than 4,000 patents with applications in theme parks, films and merchandise, according to a search of the U.S. Patent and Trademark Office records.
Bob Iger, now in his second stint as Disney's chief executive, made the embrace of technology one of his three priorities when he was first named CEO in 2005.
Three years later, the company announced a major research and development initiative with top technology universities around the world, funding labs at the Swiss Federal Institute of Technology in Zurich and Carnegie Mellon University in Pittsburgh, Pennsylvania. It closed the Pittsburgh lab in 2018.
Disney's U.S. research group has developed a mixed-reality technology called "Magic Bench" that allows people to share a space with a virtual character on screen, without need for special glasses.
In Switzerland, Disney Research has been exploring AI, machine learning and visual computing, according to its website. It has spent the last decade creating "digital humans" that it describes as "indistinguishable" from their corporeal counterparts, or fantasy characters "puppeteered" by actors.
This technology is used to augment digital effects, not replace human actors, according to a source familiar with the matter.
Its Medusa performance capture system has been used to reconstruct actors' faces without using traditional motion-capture techniques, and this technology has been used in more than 40 films, including Marvel Entertainment's "Black Panther: Wakanda Forever."
"AI research at Disney goes back a very long time and revolves around all the things you see being discussed today: Can we have something that helps us make movies, games, or conversational robots inside theme parks that people can talk to?" said one executive who has worked with Disney.
Hao Li, CEO and co-founder of Pinscreen, a Los Angeles-based company that creates AI-driven virtual avatars, said he worked on multiple research papers with Disney's lab while studying in Zurich from 2006 to 2010.
"They basically do research on anything based on performance capture of humans, creating digital faces," said Li, a former research lead at Disney-owned Industrial Light & Magic. "Some of these techniques will be adopted by Disney entities."
Disney Imagineering last year unveiled the company's first initiatives in an AI-driven character experience, the D3-09 cabin droid in the Star Wars Galactic Starcruiser hotel, which answered questions on a video screen and learned and changed based on conversations with guests.
"Not only is she a great character to interact with and always available in your cabin, which I think is very cool, behind the scenes, it's a very cool piece of technology," Imagineering executive Scott Trowbridge said at the time.
HokieRaven5
DIS Veteran
- Joined
- Mar 5, 2020
Domestic Parks numbers will be interesting to see as well:
Central Florida Tourist Tax Collection Shows Year-Over-Year Decline for Third Straight Month, Downward Trend Accelerates
The June drop of 7.3% is an acceleration of decreasing tourist tax revenue, following a 3.5% downturn in April and a 6.7% decrease in May.
Central Florida Tourist Tax Collection Shows Year-Over-Year Decline for Third Straight Month, Downward Trend Accelerates
The June drop of 7.3% is an acceleration of decreasing tourist tax revenue, following a 3.5% downturn in April and a 6.7% decrease in May.
Jrb1979
DIS Veteran
- Joined
- Dec 2, 2018
If I'm going to have ads on a streaming service then it better be free.
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
The Wrap chimes in. Not a whole lot new here.
https://www.yahoo.com/entertainment/why-disney-future-air-analysis-130000660.html
Why Disney’s Future Is Up in the Air | Analysis
Lucas Manfredi
Tue, August 8, 2023 at 8:00 AM CDT
https://www.yahoo.com/entertainment/why-disney-future-air-analysis-130000660.html
Why Disney’s Future Is Up in the Air | Analysis
Lucas Manfredi
Tue, August 8, 2023 at 8:00 AM CDT
Most interesting - collections are still blowing the doors off 2019 which I believe was a record at the time.
Stepping back even further, let’s take a look at recent raw numbers of TDT collections for the past few years:
| Month | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|---|
| March | $30.8m | $31.3m | $13.9m | $17.6m | $38.7m | $39m |
| April | $24.4m | $25.9m | $795k | $17.1m | $34.9m | $33.6m |
| May | $21.6m | $22.6m | $1.2m | $16.9m | $28.1m | $26.2m |
| June | $25m | $24.3m | $2.7m | $21.7m | $32.4m | $30m |
clarker99
DIS Veteran
- Joined
- May 15, 2019
That extra context is great. As we regress back toward the pre-covid mean over the next 18 months, I cant wait for the ridiculous overreaction to ‘lower’ parks data. We may even see a dip below average for a short period, that is where the takes will be extra spicy.
As someone who has had Hulu for over 10 years, I don't mind ads. I have never paid for no ads Hulu and I am just used to the service having ads. For Peacock and Paramount, we usually only watch the new movies that hit the service like Mario Brothers this week and ads are only to start the movie. I will gladly take a lower price for ads, so long as the ads don't impede my viewing experience.
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
https://www.orlandosentinel.com/202...weather-wildfires-orlando-quarterly-earnings/
SeaWorld blames 2% attendance drop on bad weather, wildfires
By Dewayne Bevil | dbevil@orlandosentinel.com | Orlando Sentinel
August 8, 2023 at 9:56 a.m.
Attendance was down 2% at SeaWorld Entertainment’s theme parks during the second quarter, a drop that officials attributed primarily to “significantly adverse weather” and effects from Canadian wildfires.
SeaWorld’s parks saw 125,000 fewer visitors in 2023’s second quarter, which ended June 30, than they did in 2022, according to the earnings report released Tuesday by the Orlando-based company.
“Some combination of unusually hot and cold weather, rain and/or the fallout from Canadian wildfires impacted most of our markets during the quarter,” Marc Swanson, CEO of SeaWorld Entertainment, said in a news release.
SeaWorld operates 12 attractions in the United States, stretching from San Diego to Pennsylvania. In Florida, it owns SeaWorld Orlando, Discovery Cove resort, Aquatica water park, Busch Gardens Tampa Bay theme park, and Adventure Island water park. The company did not report attendance for individual attractions.
Among the company’s recent additions was Pipeline, a surfing-inspired roller coaster that debuted at SeaWorld Orlando in May, and a coral-rescue center that opened in the park’s former Turtle Trek space in June.
The SeaWorld report said the totals also reflected a dip from the high level of post-pandemic international travel.
Industry watchers have pointed to several factors affecting Central Florida tourism this summer, including record heat, a shift in travel patterns to Europe and cruise lines, economic jitters and the political climate.
The decline in attendance at SeaWorld led to a 1.7% drop in quarterly revenue, from $504.8 million in 2022 to $496 million this year, according to the report.
“In-park spending was impacted by the adverse weather and delays in construction projects resulting in prolonged closures of certain in-park facilities and other in-park disruptions during the quarter,” Swanson said. “Despite the unusual headwinds in the quarter, attendance still grew at certain of our parks and total per capita spending increased for the 17th consecutive quarter.”
Total revenue per capita increased 0.3% to $80.80 compared with the second quarter of 2022. In-park spending per capita was up 0.6% for the quarter.
During the quarter, SeaWorld Abu Dhabi opened. It’s the company’s first theme park outside of the U.S.
“We are really proud of this park, happy to see attendance well ahead of expectations to date and excited for what this park will deliver over time,” Swanson said.
SeaWorld blames 2% attendance drop on bad weather, wildfires
By Dewayne Bevil | dbevil@orlandosentinel.com | Orlando Sentinel
August 8, 2023 at 9:56 a.m.
Attendance was down 2% at SeaWorld Entertainment’s theme parks during the second quarter, a drop that officials attributed primarily to “significantly adverse weather” and effects from Canadian wildfires.
SeaWorld’s parks saw 125,000 fewer visitors in 2023’s second quarter, which ended June 30, than they did in 2022, according to the earnings report released Tuesday by the Orlando-based company.
“Some combination of unusually hot and cold weather, rain and/or the fallout from Canadian wildfires impacted most of our markets during the quarter,” Marc Swanson, CEO of SeaWorld Entertainment, said in a news release.
SeaWorld operates 12 attractions in the United States, stretching from San Diego to Pennsylvania. In Florida, it owns SeaWorld Orlando, Discovery Cove resort, Aquatica water park, Busch Gardens Tampa Bay theme park, and Adventure Island water park. The company did not report attendance for individual attractions.
Among the company’s recent additions was Pipeline, a surfing-inspired roller coaster that debuted at SeaWorld Orlando in May, and a coral-rescue center that opened in the park’s former Turtle Trek space in June.
The SeaWorld report said the totals also reflected a dip from the high level of post-pandemic international travel.
Industry watchers have pointed to several factors affecting Central Florida tourism this summer, including record heat, a shift in travel patterns to Europe and cruise lines, economic jitters and the political climate.
The decline in attendance at SeaWorld led to a 1.7% drop in quarterly revenue, from $504.8 million in 2022 to $496 million this year, according to the report.
“In-park spending was impacted by the adverse weather and delays in construction projects resulting in prolonged closures of certain in-park facilities and other in-park disruptions during the quarter,” Swanson said. “Despite the unusual headwinds in the quarter, attendance still grew at certain of our parks and total per capita spending increased for the 17th consecutive quarter.”
Total revenue per capita increased 0.3% to $80.80 compared with the second quarter of 2022. In-park spending per capita was up 0.6% for the quarter.
During the quarter, SeaWorld Abu Dhabi opened. It’s the company’s first theme park outside of the U.S.
“We are really proud of this park, happy to see attendance well ahead of expectations to date and excited for what this park will deliver over time,” Swanson said.
clarker99
DIS Veteran
- Joined
- May 15, 2019
Disney DPEP division peaked in Q1FY23 (Rev and OI)… Tomorrow they will likely report a record breaking Q3 for rev, maybe profit.
Q4 and into FY24 things are going to have very tough YoY comparable‘s, esp domestic parks. In reality things are just normalizing to pre-covid levels. Be prepared for ‘the sky is falling‘ narratives.
Q4 and into FY24 things are going to have very tough YoY comparable‘s, esp domestic parks. In reality things are just normalizing to pre-covid levels. Be prepared for ‘the sky is falling‘ narratives.
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
https://www.yahoo.com/entertainment/watch-apple-another-disney-buyer-134157316.html
Watch Out, Apple – Another Disney Buyer Could Be Emerging | PRO Insight
Peter Csathy
Tue, August 8, 2023 at 8:41 AM CDT
From Hollywood to Wall Street, all eyes in the media and entertainment industry will be trained on Disney Wednesday as it announces its latest quarterly earnings. And question No. 1 from analysts to CEO should be his thinking about M&A.
Those questions should take on more urgency now that Iger has retained former top lieutenants Kevin Mayer and partner Tom Staggs — currently running Candle Media as co-CEOs — in a “consulting capacity” to help decide ESPN’s fate. This intriguing development followed Iger’s recent uncharacteristically frank and gloomy comments that pointed to the notion of Disney shedding some of the assets it built up under his first run as CEO.
Apple is still the most obvious potential buyer for a slimmed-down Disney, as I recently noted. But Mayer and Staggs’ reentry to the Magic Kingdom could make Disney the happiest place on Earth again for them, as well as shareholders.
Disney’s stock is down over 50% from its highs a couple years back and has continued mostly on a downward trajectory after Iger’s return gave it an early buzz. Particularly troubling are plunging revenue and profits for ESPN and Disney’s other cable networks (down 6% to $14 billion and 29% to $3 billion, respectively, for the first six months of fiscal year 2023, which cover October through March). And Mickey sees troubling transformational headwinds everywhere amidst increasingly tech-driven media’s new world order.
At first blush, it seems odd for Mayer and Staggs to be retained in a “consulting” capacity, don’t you think? It’s not as if they don’t have other things to do. Both run an expanding media holding company which now includes Reese Witherspoon’s Hello Sunshine, bought by Candle for a reported $900 million, and Moonbug Entertainment, acquired for a cool $3 billion.
But look closer and follow the money. Candle Media is backed by Blackstone, the massive private equity fund that manages $1 trillion in its M&A coffers. You heard me right, that’s “trillion” with a capital “T” — a lot of cheese if you’re trying to catch a mouse.
You can see the picture emerging here. Mayer ran Disney’s strategic planning group for years and engineered all of its massive game-changing acquisitions of the past two decades, an M&A spree that was the envy of the entertainment world. Most notably, these includedPixar ($7.4 billion), Marvel Entertainment ($4 billion) and Lucasfilm ($4.05 billion) — all incredible bargains in hindsight. How’s that for a franchise trifecta! Yes, Mayer also led the $71 billion acquisition of Fox’s entertainment assets where many pundits believe Disney overpaid, but don’t hold that against him. The jury is still out on that one. Even if that deal doesn’t ultimately pan out, a .750 slugging percentage is pretty damn good.
The point is that Mayer is a deal guy through and through, and Candle Media’s raison d’etre is M&A. Besides perhaps Iger, no one knows Disney’s assets, or what to do with them, better than he does. And then there’s his partner Staggs, who also spent years at Disney, ultimately serving as its COO.
Mayer, Staggs and their Blackstone benefactors theoretically could mastermind a takeover of all of Disney by leveraging massive debt, as well as cash. But that’s not likely, particularly in this era of continuously rising interest rates. Much more likely would be for Mayer and Staggs to buy what they deem to be Disney’s tastiest morsels. Since they are consulting for Iger about ESPN’s fate, that’s an obvious place to start. One person’s “consulting” is another person’s “due diligence” in advance of a potential acquisition.
ESPN and related properties likely would command at least one-third of Disney’s current depressed market cap of about $150 billion (a buyout premium would take the number significantly higher, of course). Disney’s “linear networks” generated about one-third of Disney’s overall revenue last quarter. Media M&A multiples on financial performance can vary widely, with upward trending relevant financials rewarded on the higher end as compared to ESPN’s current downward trend.
After an acquisition of one or more parts, Mayer and Staggs could return to the mothership to work the magic they might have hoped to as Iger’s heirs before his surprising anointment of parks chief Bob Chapek. The private equity playbook — streamlining operations, accelerating growth and getting liquid within five to seven years — could work here. Disney’s distressed stock price certainly makes this possibility more probable today.
Apple is still the leading contender to buy Disney assets for all the reasons I laid out in my earlier column before Mayer and Staggs reemerged. But private equity in the form of Blackstone runs a close second. Apart from those two mega-players, I see no other obvious buyers. Traditional media (studios, broadcasters) can’t afford it. Nor do I see any of the other tech behemoths like Microsoft, Alphabet, Amazon or Meta taking a swing. While some might see value in live sports, the brand and cultural fit just likely aren’t there for Iger. Those suitors simply aren’t worthy in his eyes.
Iger, of course, denies that ESPN is for sale, even as he searches for “strategic partners” to fund its transition to streaming. But methinks he protests too much. Why return to the tumult of Disney after already cementing his legacy of one of the great all-time Hollywood moguls? It likely means one thing, and one thing only: He has transformational M&A in mind.
Iger’s obvious win — culturally, financially and reputationally — would be either a Disneyfied Apple (Iger served on Apple’s board for years and was a close confidant of Apple co-founder Steve Jobs) or Disneyfied private equity (Mayer and Staggs now wear their Mickey Mouse ears once again).
So Disney investors, consider this column your blueprint for Wednesday’s earnings call. It’s the perfect time to probe Iger’s appetite for selling off wings of the Mouse House — and possibly inviting in new – but extremely familiar – roommates in the executive suite.
Watch Out, Apple – Another Disney Buyer Could Be Emerging | PRO Insight
Peter Csathy
Tue, August 8, 2023 at 8:41 AM CDT
From Hollywood to Wall Street, all eyes in the media and entertainment industry will be trained on Disney Wednesday as it announces its latest quarterly earnings. And question No. 1 from analysts to CEO should be his thinking about M&A.
Those questions should take on more urgency now that Iger has retained former top lieutenants Kevin Mayer and partner Tom Staggs — currently running Candle Media as co-CEOs — in a “consulting capacity” to help decide ESPN’s fate. This intriguing development followed Iger’s recent uncharacteristically frank and gloomy comments that pointed to the notion of Disney shedding some of the assets it built up under his first run as CEO.
Apple is still the most obvious potential buyer for a slimmed-down Disney, as I recently noted. But Mayer and Staggs’ reentry to the Magic Kingdom could make Disney the happiest place on Earth again for them, as well as shareholders.
Disney’s stock is down over 50% from its highs a couple years back and has continued mostly on a downward trajectory after Iger’s return gave it an early buzz. Particularly troubling are plunging revenue and profits for ESPN and Disney’s other cable networks (down 6% to $14 billion and 29% to $3 billion, respectively, for the first six months of fiscal year 2023, which cover October through March). And Mickey sees troubling transformational headwinds everywhere amidst increasingly tech-driven media’s new world order.
At first blush, it seems odd for Mayer and Staggs to be retained in a “consulting” capacity, don’t you think? It’s not as if they don’t have other things to do. Both run an expanding media holding company which now includes Reese Witherspoon’s Hello Sunshine, bought by Candle for a reported $900 million, and Moonbug Entertainment, acquired for a cool $3 billion.
But look closer and follow the money. Candle Media is backed by Blackstone, the massive private equity fund that manages $1 trillion in its M&A coffers. You heard me right, that’s “trillion” with a capital “T” — a lot of cheese if you’re trying to catch a mouse.
You can see the picture emerging here. Mayer ran Disney’s strategic planning group for years and engineered all of its massive game-changing acquisitions of the past two decades, an M&A spree that was the envy of the entertainment world. Most notably, these includedPixar ($7.4 billion), Marvel Entertainment ($4 billion) and Lucasfilm ($4.05 billion) — all incredible bargains in hindsight. How’s that for a franchise trifecta! Yes, Mayer also led the $71 billion acquisition of Fox’s entertainment assets where many pundits believe Disney overpaid, but don’t hold that against him. The jury is still out on that one. Even if that deal doesn’t ultimately pan out, a .750 slugging percentage is pretty damn good.
The point is that Mayer is a deal guy through and through, and Candle Media’s raison d’etre is M&A. Besides perhaps Iger, no one knows Disney’s assets, or what to do with them, better than he does. And then there’s his partner Staggs, who also spent years at Disney, ultimately serving as its COO.
Mayer, Staggs and their Blackstone benefactors theoretically could mastermind a takeover of all of Disney by leveraging massive debt, as well as cash. But that’s not likely, particularly in this era of continuously rising interest rates. Much more likely would be for Mayer and Staggs to buy what they deem to be Disney’s tastiest morsels. Since they are consulting for Iger about ESPN’s fate, that’s an obvious place to start. One person’s “consulting” is another person’s “due diligence” in advance of a potential acquisition.
ESPN and related properties likely would command at least one-third of Disney’s current depressed market cap of about $150 billion (a buyout premium would take the number significantly higher, of course). Disney’s “linear networks” generated about one-third of Disney’s overall revenue last quarter. Media M&A multiples on financial performance can vary widely, with upward trending relevant financials rewarded on the higher end as compared to ESPN’s current downward trend.
After an acquisition of one or more parts, Mayer and Staggs could return to the mothership to work the magic they might have hoped to as Iger’s heirs before his surprising anointment of parks chief Bob Chapek. The private equity playbook — streamlining operations, accelerating growth and getting liquid within five to seven years — could work here. Disney’s distressed stock price certainly makes this possibility more probable today.
Apple is still the leading contender to buy Disney assets for all the reasons I laid out in my earlier column before Mayer and Staggs reemerged. But private equity in the form of Blackstone runs a close second. Apart from those two mega-players, I see no other obvious buyers. Traditional media (studios, broadcasters) can’t afford it. Nor do I see any of the other tech behemoths like Microsoft, Alphabet, Amazon or Meta taking a swing. While some might see value in live sports, the brand and cultural fit just likely aren’t there for Iger. Those suitors simply aren’t worthy in his eyes.
Iger, of course, denies that ESPN is for sale, even as he searches for “strategic partners” to fund its transition to streaming. But methinks he protests too much. Why return to the tumult of Disney after already cementing his legacy of one of the great all-time Hollywood moguls? It likely means one thing, and one thing only: He has transformational M&A in mind.
Iger’s obvious win — culturally, financially and reputationally — would be either a Disneyfied Apple (Iger served on Apple’s board for years and was a close confidant of Apple co-founder Steve Jobs) or Disneyfied private equity (Mayer and Staggs now wear their Mickey Mouse ears once again).
So Disney investors, consider this column your blueprint for Wednesday’s earnings call. It’s the perfect time to probe Iger’s appetite for selling off wings of the Mouse House — and possibly inviting in new – but extremely familiar – roommates in the executive suite.
clarker99
DIS Veteran
- Joined
- May 15, 2019
Disney DMED is going to report another poor quarter for Q3.
Linear will likely bounce back a bit vs 1st half the year.
Studios may report their worst quarter ever. Studios are in big trouble but nothing can save them this FY as they have no releases left till FY24 and I am not sure they have upped their licensing game yet.
Dis+ Hotstar will shed millions of users which are super low rev$ bc of cricket and everyone will overreact, International will add a couple million and domestic will like be slightly down/flat. I am hoping to see a decent rise in core $/sub.
Q3 is fixing to be DMED’s ‘bottom’. Disney has basically put all the bad it can into this quarter before the cuts start to affect results for Q4 and beyond.
Linear will likely bounce back a bit vs 1st half the year.
Studios may report their worst quarter ever. Studios are in big trouble but nothing can save them this FY as they have no releases left till FY24 and I am not sure they have upped their licensing game yet.
Dis+ Hotstar will shed millions of users which are super low rev$ bc of cricket and everyone will overreact, International will add a couple million and domestic will like be slightly down/flat. I am hoping to see a decent rise in core $/sub.
Q3 is fixing to be DMED’s ‘bottom’. Disney has basically put all the bad it can into this quarter before the cuts start to affect results for Q4 and beyond.
Aluminum Falcon
DIS Veteran
- Joined
- Aug 9, 2021
Here's hoping
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
All major averages down today around 1/2 % or so. But there's this.
https://finance.yahoo.com/quote/DIS?p=DIS
The Walt Disney Company (DIS)
NYSE - Nasdaq Real Time Price. Currency in USD
88.16+1.33 (+1.53%)
As of 03:54PM EDT. Market open.
https://finance.yahoo.com/quote/DIS?p=DIS
The Walt Disney Company (DIS)
NYSE - Nasdaq Real Time Price. Currency in USD
88.16+1.33 (+1.53%)
As of 03:54PM EDT. Market open.
HokieRaven5
DIS Veteran
- Joined
- Mar 5, 2020
Appreciate your actual analysis and breakdowns of the financials through this thread. Hopefully this is the case going forward for DMED.
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