Any Opinions On...

[Peter Pirate 2]

The day that Disney breaks up?

Someday the company will be sold off, for the second time (the first was taking the Co. public, of course). Does anyone necessarily see this as a good thing or a bad thing?

I'm wondering (hoping) that if the Parks (and what ever affiliating divisions) are sold to a concern that may value quality perhaps there is a chance for a positive future. But then again if it's another public Co. that buy's then the Wall St. game probably has to continue, right?

Any thoughts?

 

[Figment632]

This will never happen the parks will never be sold from the company.

 

[DC7800]

The day that Disney breaks up?

Someday the company will be sold off, for the second time (the first was taking the Co. public, of course). Does anyone necessarily see this as a good thing or a bad thing?

I'm wondering (hoping) that if the Parks (and what ever affiliating divisions) are sold to a concern that may value quality perhaps there is a chance for a positive future. But then again if it's another public Co. that buy's then the Wall St. game probably has to continue, right?

Any thoughts?

Can we even begin to speculate on how the company might be divided up? So many unknowns. It seems rather unlikely that someone interested in California would not be interested in Florida, or vice versa, though what about (currently partial) control of overseas parks? What if the Vacation Club, for instance, were under a different corporate parent from the parks? That's not so implausible, and possibly my greatest fear.

In my dreams the parks and related divisions (resorts, cruise line, DVC, etc.) would be taken private to a party interested in maintaining traditional Disney standards.

 

[Disco]

Even if Disney's parks don't bring any profits they account for huge sums of gross cash flow and tremendous assets. This gives a company a lot more flexibility and muscle when compared to say a tech company like Apple. When looking at Apple's stock you might value the company higher than Disney but all it takes is a couple years of bad products and the company would be worth nothing as they have no real assets.
The more parks Disney adds the more stable it is (unless they operate at a loss over like a decade long period). They would never sell off the parks division no matter how profitable the other divisions are.

 

[anthony2k7]

Even if Disney's parks don't bring any profits they account for huge sums of gross cash flow and tremendous assets. This gives a company a lot more flexibility and muscle when compared to say a tech company like Apple. When looking at Apple's stock you might value the company higher than Disney but all it takes is a couple years of bad products and the company would be worth nothing as they have no real assets.
The more parks Disney adds the more stable it is (unless they operate at a loss over like a decade long period). They would never sell off the parks division no matter how profitable the other divisions are.

doesn't apple have a ridiculous amount of cash in the bank though?

it seemed a while ago that Apple (or directly Steve Jobs) taking control of Disney could have maybe been ideal. Love or hate apple, they have a brand that they strive to maintain and innovate with, both of which are values Disney seem to have lost in recent years. Unfortunately it seems Steve Jobs has things going on now which mean this isn't likely anytime soon if at all.

 

[Peter Pirate 2]

I'm not talking of Disney selling it's parts as much as current Disney selling (like when Comcast came calling). It is going to happen and IMO it will happen before Iger retires.

It seems true that probably no one would want it as it is so at some point certain parts would be valuable on the market, no?

 

[nytimez]

I don't think this is outside of the realm of possibility, but I don't understand why you might think this is an inevitability. I would call the odds of this remote.

Large companies are rarely broken up just for the sake of a sale -- this usually happens when a company has run afoul of regulators, or when a company is in dire straits and needs a cash infusion... so it sells off part of itself.

And few companies could buy Disney as a whole at this point. The simple math of it -- Disney is just worth too much to buy. I believe Disney is even worth more than Comcast now, so that ship has sailed.

 

[Peter Pirate 2]

I don't think this is outside of the realm of possibility, but I don't understand why you might think this is an inevitability. I would call the odds of this remote.

Large companies are rarely broken up just for the sake of a sale -- this usually happens when a company has run afoul of regulators, or when a company is in dire straits and needs a cash infusion... so it sells off part of itself.

And few companies could buy Disney as a whole at this point. The simple math of it -- Disney is just worth too much to buy. I believe Disney is even worth more than Comcast now, so that ship has sailed.

OK. My memory may be failing me. Was Disney in big trouble when Comcast came knocking? Because I know that deal was very close to being accepted.

 

[nytimez]

OK. My memory may be failing me. Was Disney in big trouble when Comcast came knocking? Because I know that deal was very close to being accepted.

It wasn't close to being accepted -- it was a hostile bid. It happened at the height of the Michael Eisner vs. Roy Disney battle. Disney was in enough trouble that the CEO was forced out.

 

[ChrisFL]

I recall hearing rumors that back in the early 80's, before Eisner took over, that there were thoughts of splitting up the divisions and even the parks...for example, EPCOT Center would have been sold off to another company.

I am glad that they were kept together at WDW obviously, however sometimes I wonder if it would be beneficial for a unique park like Epcot now to have a high-tech major shareholder, like 50% with Disney, or run things more like OLC does in Tokyo, with licensing of the attractions and just to bring back the idea of Epcot actually being futuristic

 

[DizCaptain]

Well, if such an event actually were to happen, I think I good overview would be...

It is a dark time for the Rebellion. Although the Corporate Money Star has been destroyed,

Igerian troops have driven the Rebel forces from

their hidden base and pursued them across the galaxy.

Evading the dreaded Corporate Money Machine, a group of freedom fighters

led by John Lasseter (maybe?) has established a new secret base in Texas.

The evil lord Iger, obsessed with finding Lasseter,

has dispatched thousands of remote probes into the far reaches of

space...

Just a little thing I wrote...inspired by Lucasfilm. Has a great plotline if you ask me...

 

[lovemickeyshouse]

They can sell Disney World after I die but not before cause I love Disney .I will say that there Wedding department is a disgrace the way they charge extra for the stupidest things and had a rude sales woman.

 

[TisBit]

As others have said, I doubt that you will see Disney break up at this point. While people may disagree with the way that Disney is going, they are doing at a decent profit, which protects the business.

If the company were to break apart, it would end. Do not expect anyone to come in and want to hold the "Disney" standard just for the sake of holding that standard. They will look to maximize profits and the brand name, that is the name of the game. If anyone would want to invest millions/billions in re-establishing some sense of Disney tradition, it will be Disney itself and they will do it internally.

As for the people that feel that Disney has gone so far down hill, well that has been said every time there has been a change. When Roy took over after Walt's death, many people did not like the changes in the company. When Eisner took over from Roy, many people didn't like the changes and complained. Now we are on to Iger and the tradition will continue regardless of who has the top spot, but in the end Disney has still set the standard, unfortunately it is a standard even they can not live up to. It is a model that lives in everyone's mind, but is difficult to pull off in real life.

 

[Faldred]

I can't imagine a "Disney break up" to the extent it's suggested here. Yes, maybe sell off some of the peripheral operations from the media side, like Touchstone, ABC, et. al. (although with ESPN being the most profitable part of the company, why?), but anything with the actual Disney name on it is unlikely to ever be sold off as just a piece.

As to a comment upthread, I'm one of those who like the idea of Apple buying Disney. I think Disney's media empire infrastructure would help Apple's future plans, and Apple's design and business ethic is a lot closer to Walt's original vision than the current bean counters running the show.

Oh, and Apple has enough cash on hand to buy 50+% of Disney, even with a price premium for a buyout.

 

[pilferk]

I'm not talking of Disney selling it's parts as much as current Disney selling (like when Comcast came calling). It is going to happen and IMO it will happen before Iger retires.

It seems true that probably no one would want it as it is so at some point certain parts would be valuable on the market, no?

It would be VERY tough for this to happen. Disney is SOOO huge that, short of a firesale type catastrophe (because their stock plummeted based on financial results), you'd be hard pressed to break it up. You'd have to satisfy a gazillion shareholders in buyout and there are precious few companies that could afford that kind of cash outlay. And a stock swap would basically turn into Disney "owning" the company that "bought" them with only about a half dozen realistic exceptions (since I don't see too many manufacturing companies wanting to buy what is essentially an entertainment company).

I don't see it happening...at least not any time soon. You might have different majority owners, who acquire the stock through normal methods, but I don't think you'll see a real "buyout" where Disney becomes a subsidiary brand/company.

Edit: And for those mentioning Apple.....you'd hand Disney Stockholders about 25% (without any premium) of Apple should Apple "buy" Disney based on valuation by share. Apple values at 320 billion outstanding ($347 per share with 921 million shares outstanding), Disney at 82 billion outstanding ($43 per share with 1.9 BILLION shares outstanding) at this exact moment. That's a tough takeover to pitch to your shareholders on BOTH sides...and it would make it tough for Apple to acquire Disney in a pure cash deal, too.

 

[pilferk]

OK. My memory may be failing me. Was Disney in big trouble when Comcast came knocking? Because I know that deal was very close to being accepted.

Big trouble? Eh..they weren't on great footing.

http://money.cnn.com/2004/02/11/news/companies/comcast_disney/

Stock price was about 1/2 what it is now, with the same number of outstanding shares. Eisner was to blame for a good part of that (though not all of it). With the acquisition of Pixar, and a couple other pieces, Disney's only gotten bigger and stronger.

Comcast's stock price, on the flip side, was running about $7 more per share back then than it is right now...or about 27% higher.

Today, Disney values out on the market at about 81 to 82 billion.

Comcast values out on the market at about 50 billion.

Edit: Honestly, the Comcast bid was never taken all that seriously. It undervalued Disney's assets by a pretty decent margin (about 6 billion). I'm not sure you can even consider it a serious buy out attempt, all things considered.

 

[Faldred]

Edit: And for those mentioning Apple.....you'd hand Disney Stockholders about 25% (without any premium) of Apple should Apple "buy" Disney based on valuation by share. Apple values at 320 billion outstanding ($347 per share with 921 million shares outstanding), Disney at 82 billion outstanding ($43 per share with 1.9 BILLION shares outstanding) at this exact moment. That's a tough takeover to pitch to your shareholders on BOTH sides...and it would make it tough for Apple to acquire Disney in a pure cash deal, too.

I doubt Apple would do a stock swap purchase. It would be strictly from the giant stockpile of cash they've built up. They could easily purchase 50% plus 1 share at a 25% premium over current market prices, and still not completely deplete the kitty.

And it's not like they're paying dividends or anything. That money is being saved up specifically for one or more significant buyouts. My personal opinion is that Apple's recent directions indicate that their next major move could very well be in the media world, and Disney's film, TV, and radio holdings (print too, right?) would allow them to enter the game as a big fish, not an upstart.

Or, they could have a totally different plan for that money. Who knows? But it's fun to speculate.

 

[skiingfast]

Could this happen sure?

Could Apple do it? Yeah right. That's not how things work in the real world. Apples is worth just several billions of dollars in assets and hundreds in hope of future profits. Profits that mostly aren't guaranteed. Nobody has to buy an iphone they all have alternatives.

Comcast has customers that have little alternative to pay the cable bill next month. Their future profit has a good prospect of being realized.

Disney has real assets. Lots of valuable land. Lots of buildings. And lot of media that is realizing profits over a long term.

If you look at book values of all three companies. You would expect Disney to be able to buy the other two.

But if Disney or part of Disney were to be sold, the likely buyer isn't a company with a household name, most people would of heard of. It would be an investment group. These companies have real money and real credit. And they buy chunks of companies, that is what they do.

 

[Big]

Disney is not the majority owner of the Tokyo parks, for what it's worth.

 

[pilferk]

I doubt Apple would do a stock swap purchase. It would be strictly from the giant stockpile of cash they've built up. They could easily purchase 50% plus 1 share at a 25% premium over current market prices, and still not completely deplete the kitty.

Or, they could have a totally different plan for that money. Who knows? But it's fun to speculate.

Current SEC documents show Apple having between 25B and 40B in cash on hand (depending on the filing you look at).

That's not even 50% (or just barely, in terms of top end) of the stock valuation of Disney, right now. And it would completely wipe out Apple's cash on hand (which they're not going to do, because it would have huge impact on their per share price).