Apple buying Disney?

[disboardlover]

While I would love if Disney remains independent and not beholden to any other company ever, if they were to be bought, Verizon, Comcast and a whole host of other companies would have me more worried than a marriage with Apple. One need only look at history (both when Disney was far weaker in the 80s and almost destroyed by corporate raiders and when Comcast wanted them in 2004) that given enough access to wall street money, any large corporation can make a bid to buy, and then promptly sell off assets to pay for the debt incurred.

Despite many people's perception of Apple right now, it isn't that much removed from how Disney has been viewed through its history by various folks. Some love 'em, while others can't stand 'em.

I can see a scenario where Apple can create a holding company and make the current tech company a subsidiary, and then add Disney as another subsidiary. Given what I know of the cultures of both companies, this would be preferred over anyone else owning Disney, though an independent Disney is still the best choice. This would allow Disney to continue to do its best in entertainment, but now with the financial backing of the technology side of the business which throws off much more cash than they could ever spend, and both sides can help each other.

A few extra bullets that don't necessarily increase any possibility of this, but add some context of the Apple/Disney history:

• Bob Iger (CEO of Disney) is still on the board of Apple
• Many of the top creatives at Disney Animation (e.g. John Lasseter, Ed Catmull) are from Pixar, whose primary owner was Steve Jobs.
• There has been a history of Disney and Apple working together over the last 12-15 years to test out or even pioneer new models of consumption for content (e.g. digital distribution of movies and ABC shows on iPods and iPads), something expanded quickly to other platforms once proven to be lucrative.
• There is no risk that Disney content would be exclusively for Apple platforms as the worldwide market share of other platforms like Android and/or Windows is dominant. So, it would make sense to continue to be everywhere.

 

[lockedoutlogic]

While I would love if Disney remains independent and not beholden to any other company ever, if they were to be bought, Verizon, Comcast and a whole host of other companies would have me more worried than a marriage with Apple. One need only look at history (both when Disney was far weaker in the 80s and almost destroyed by corporate raiders and when Comcast wanted them in 2004) that given enough access to wall street money, any large corporation can make a bid to buy, and then promptly sell off assets to pay for the debt incurred.

Despite many people's perception of Apple right now, it isn't that much removed from how Disney has been viewed through its history by various folks. Some love 'em, while others can't stand 'em.

I can see a scenario where Apple can create a holding company and make the current tech company a subsidiary, and then add Disney as another subsidiary. Given what I know of the cultures of both companies, this would be preferred over anyone else owning Disney, though an independent Disney is still the best choice. This would allow Disney to continue to do its best in entertainment, but now with the financial backing of the technology side of the business which throws off much more cash than they could ever spend, and both sides can help each other.

A few extra bullets that don't necessarily increase any possibility of this, but add some context of the Apple/Disney history:

• Bob Iger (CEO of Disney) is still on the board of Apple
• Many of the top creatives at Disney Animation (e.g. John Lasseter, Ed Catmull) are from Pixar, whose primary owner was Steve Jobs.
• There has been a long history of Disney and Apple working together in the last 12-15 years to test out or even pioneer new models of consumption for content (e.g. digital distribution of movies and ABC shows on iPods and iPads), something expanded quickly to other platforms once proven to be lucrative.
• There is no risk that Disney content would be exclusively for Apple platforms as the worldwide market share is dominant on other platforms like Android and/or Windows. It would make sense to continue to be everywhere.

Excellent insights...

I actually think apple can and would buy Disney whenever they feel like it...but if they did it would be a sign they see their tired line of products starting to fail and would be looking for guaranteed cash...

...that's what would worry me.

This idea that disney can't be bought...and that is wouldn't be approved in a heartbeat...is foolish.

Comcast buying Verizon would get an antitrust look because of cable and internet service...

But at&t bought time warner with barely a flinch...nobody cares as long as you buy the right congressman/regulators..

 

[disboardlover]

Excellent insights...

I actually think apple can and would buy Disney whenever they feel like it...but if they did it would be a sign they see their tired line of products starting to fail and would be looking for guaranteed cash...

...that's what would worry me.

This idea that disney can't be bought...and that is wouldn't be approved in a heartbeat...is foolish.

Comcast buying Verizon would get an antitrust look because of cable and internet service...

But at&t bought time warner with barely a flinch...nobody cares as long as you buy the right congressman/regulators..

I agree: from an antitrust POV, I am more concerned with the infrastructure companies for internet access (e.g. at&t wireless, Comcast Cable) owning content than a platform/technology company like Apple owning a content company, and yet, Comcast owns Universal and at&t is likely to get Time Warner.

As for Apple being tired, their culture is one of organic growth on the tech side and they buy tons of small tech companies, but historically have been hesitant to buy other large tech companies, despite Wall Street pushing it. They have never been organized to be a large bureaucracy like some corporations (including Disney). Their cash stockpile is due to almost to a once in a lifetime product (iPhone).

The day they try to buy another large tech company to appease Wall Street would be more worrisome. The huge amount of cash they generate is better spent buying their own stock, paying dividends, or buying a complementary business, if they do a large purchase of at all.

 

[Michael Lopez]

Not sure about this. It's not like Disney is hurting for money or not succeeding.

 

[tcufrog]

I'd rather Apple buy a company like Hulu.

 

[Whatsthegoodword]

Not sure about this. It's not like Disney is hurting for money or not succeeding.

THIS. Disney is not vulnerable right now. With that being said, where's the guaranteed benefit to Disney shareholders in becoming an Apple subsidiary? I don't see it.

...and that quoted article above that calls theme parks "non core" assets are missing the point. Without the theme parks, Disney is just another movie company with no way to endlessly monetize their IP.

 

[tcufrog]

Disney isn't just movie company. They also make a crazy amount of money on merchandising and they are heavily involved in TV. That being said, I see the merchandising, movie, TV, and travel parts of their businesses as heavily intertwined. None of them would be as successful without the others. For example, the TV show "Once Upon a Time" is based primarily on the Disney movies, not the original stories. They are now selling merchandise related to the TV show not the IP it was based on. I don't think the TV show would be nearly as successful if it was based on the original stories.

 

[Whatsthegoodword]

Disney isn't just movie company. They also make a crazy amount of money on merchandising and they are heavily involved in TV. That being said, I see the merchandising, movie, TV, and travel parts of their businesses as heavily intertwined. None of them would be as successful without the others. For example, the TV show "Once Upon a Time" is based primarily on the Disney movies, not the original stories. They are now selling merchandise related to the TV show not the IP it was based on. I don't think the TV show would be nearly as successful if it was based on the original stories.

I think you realize this, but that's my point. Disney is unique. Breaking them apart would reduce the worth and "value" of the independent parts, methinks.

 

[Mattimation]

I'd rather Apple buy a company like Hulu.

Disney actually owns 30% of Hulu, so Apple buying Disney would give them Hulu too.

 

[Josh Hendy]

If Apple was to make an offer at say 40% of Disney's share price then it is almost certain that a majority of shareholders would accept, no matter how skeptical anyone is of the long term benefit of being a subsidiary of Apple.

These are not movie or theme park fans they're a bunch of speculators. A quick 40% profit IS the benefit.

Management and board cannot legally reject a serious takeover offer, they will have to hold a shareholder vote.

 

[manning]

If Apple was to make an offer at say 40% of Disney's share price then it is almost certain that a majority of shareholders would accept, no matter how skeptical anyone is of the long term benefit of being a subsidiary of Apple.

These are not movie or theme park fans they're a bunch of speculators. A quick 40% profit IS the benefit.

Management and board cannot legally reject a serious takeover offer, they will have to hold a shareholder vote.

But can create a poison pill

 

[old lady]

I wish I could buy Disney and I bet a lot of fans would.

 

[I'm a foo fighter]

I wish I could buy Disney and I bet a lot of fans would.

Neat