Bean Counters and shortsightedness

[PolymerSkywalker]

That is correct. Has lost around $14 Billion thus far. Lost a little less than a $1 Billion last quarter, and has lost approximately $4 Billion in the last 12 months.

 

[HokieRaven5]

Correct me if I am wrong, but Disney+ is not making money, in fact it’s bleeding money (read this a while ago but can’t site source as I don’t remember- so is this factually true? Anyone?). So yes, media Disney fan base may be ok or growing. But funding for their new shows and movies are coming from the parks, hence the problem.

Disney from the beginning has stated that Disney+ wasn’t going to be profitable until sometime during Fiscal 2024.

Yes streaming and the studios are currently losing money, which is why they cleared $5.5B in overhead costs in the media side to lower their SG&A costs that are the real reason why streaming isn’t profitable currently.

It’s a narrative that keeps going around but the parks money funneling into Hollywood isn’t really accurate. While dwindling the Linear Markets still make enough profits to cover the losses associated with streaming/studios. Couple that with still not distributing a dividend in an effort to cover for those losses.

 

[Aluminum Falcon]

Correct me if I am wrong, but Disney+ is not making money, in fact it’s bleeding money (read this a while ago but can’t site source as I don’t remember- so is this factually true? Anyone?). So yes, media Disney fan base may be ok or growing. But funding for their new shows and movies are coming from the parks, hence the problem.

i think you may be oversimplifying. Netflix operated at a loss for a while but survived without having a theme park to pull from. If you could provide numbers to back up your assertion then we'd be cooking, at this point it seems more like your assuming one thing leads to another, and business is not that simple. Typically companies break off different segments, and don't use 1 to fund another, it is up to Disney+ to find their own way of funding

 

[Aluminum Falcon]

Disney from the beginning has stated that Disney+ wasn’t going to be profitable until sometime during Fiscal 2024.

Yes streaming and the studios are currently losing money, which is why they cleared $5.5B in overhead costs in the media side to lower their SG&A costs that are the real reason why streaming isn’t profitable currently.

It’s a narrative that keeps going around but the parks money isn’t funneling into Hollywood isn’t really accurate. While dwindling the Linear Markets still make enough profits to cover the losses associated with streaming/studios. Couple that with still not distributing a dividend in an effort to cover for those losses.

Not to mention when they made their cuts they not only didn't let go anyone on the parks side but kept hiring more CM's. Just trying to illustrate how Disney (just like most companies) runs different segments of their business separate from one another.

 

[wabbott]

Disney from the beginning has stated that Disney+ wasn’t going to be profitable until sometime during Fiscal 2024.

Yes streaming and the studios are currently losing money, which is why they cleared $5.5B in overhead costs in the media side to lower their SG&A costs that are the real reason why streaming isn’t profitable currently.

It’s a narrative that keeps going around but the parks money isn’t funneling into Hollywood isn’t really accurate. While dwindling the Linear Markets still make enough profits to cover the losses associated with streaming/studios. Couple that with still not distributing a dividend in an effort to cover for those losses.

It's not a "narrative," it is what is happening at this very time. Parks is being starved of maintenance, capital, and personnel to keep the overall bottom line in the black. Projects that should be completed in a year's time are taking 3 and 4 years, so as to spread out the capital costs over time. The company claims it cannot hire lifeguards to open Blizzard Beach. Baloney. If you pay them enough, they will show up for work, every time.

The reason DMED is not very profitable is simple. They're making too many movies and TV programs that aren't drawing viewers.

 

[Aluminum Falcon]

It's not a "narrative," it is what is happening at this very time. Parks is being starved of maintenance, capital, and personnel to keep the overall bottom line in the black. Projects that should be completed in a year's time are taking 3 and 4 years, so as to spread out the capital costs over time. The company claims it cannot hire lifeguards to open Blizzard Beach. Baloney. If you pay them enough, they will show up for work, every time.

The reason DMED is not very profitable is simple. They're making too many movies and TV programs that aren't drawing viewers.

i would argue that the parks are still recovering from the pandemic, and have already started making strides in the right direction. Disney raised their going rate so it is a little disingenuous to say that paying more money will bring in people, just saying throw money at a problem isn't typically in a companies best interest.

Disney+ seems to be on track, they already have more subscribers than projected from the beginning they projected between 140-165 million subscribers by end of fiscal 24' they are already at that mark even while losing subscribers. So your point about original content doesn't seem to hold water. They were upfront about profitability from the beginning, and still look to be on track at this point.

I understand that people are upset with the company, this all just seems to be convenient at this point

 

[wabbott]

We will all know more a week from today.

 

[HokieRaven5]

It's not a "narrative," it is what is happening at this very time. Parks is being starved of maintenance, capital, and personnel to keep the overall bottom line in the black. Projects that should be completed in a year's time are taking 3 and 4 years, so as to spread out the capital costs over time. The company claims it cannot hire lifeguards to open Blizzard Beach. Baloney. If you pay them enough, they will show up for work, every time.

The reason DMED is not very profitable is simple. They're making too many movies and TV programs that aren't drawing viewers.

It’s a narrative that the parks $ is funneling into Hollywood. The heads of the parks making the choices to make the cutbacks on maintenance costs was directions given under Chapek for operation of that division. But the parks Capex isn’t going to streaming it was just lining the C-Suite’s pockets or refilling the coffers of DPEP because they went from $6.7B in OI from FY19 to $8.8B from FY20-22.

It’s also not as simple as pay more these days. A lot of the younger generation is finding other means of earning $$ that allows them more flexibility than what Disney offers. The closures accelerated that mindset among the workforce. That’s a different conversation though.

Meanwhile, media, despite losses and losing traction still brought in 20.5B in OI over that same 3 year period.

 

[jade1]

I can see the junior executive now: "Let's spend money in a way that doesn't increase our revenue!"

Who knows, maybe they will come up with a way some day where spending "does" increase revenue.

 

[Smugpugmug]

We will all know more a week from today.

Aw, I totally forgot that the Q3 earnings report is next week. I'll be on vacation so I'll miss all the drama that'll 100% ensue after the call.

 

[HokieRaven5]

Aw, I totally forgot that the Q3 earnings report is next week. I'll be on vacation so I'll miss all the drama that'll 100% ensue after the call.

Should be lots of reaction as Disney loses somewhere around another 6-8M+ D+ subscribers in India because of Cricket.

 

[Aluminum Falcon]

Aw, I totally forgot that the Q3 earnings report is next week. I'll be on vacation so I'll miss all the drama that'll 100% ensue after the call.

so true

 

[Aluminum Falcon]

Should be lots of reaction as Disney loses somewhere around another 6-8M+ D+ subscribers in India because of Cricket.

i'm sure that will be blamed on Disney not pulling in more of the younger generation though, or nickel and diming everyone

 

[Smugpugmug]

Should be lots of reaction as Disney loses somewhere around another 6-8M+ D+ subscribers in India because of Cricket.

Ugh, I'll have to check in on the chaos while I'm sitting on a beach chair with a beer in hand.

 

[wabbott]

It’s a narrative that the parks $ is funneling into Hollywood. The heads of the parks making the choices to make the cutbacks on maintenance costs was directions given under Chapek for operation of that division. But the parks Capex isn’t going to streaming it was just lining the C-Suite’s pockets or refilling the coffers of DPEP because they went from $6.7B in OI from FY19 to $8.8B from FY20-22.

It’s also not as simple as pay more these days. A lot of the younger generation is finding other means of earning $$ that allows them more flexibility than what Disney offers. The closures accelerated that mindset among the workforce. That’s a different conversation though.

Meanwhile, media, despite losses and losing traction still brought in 20.5B in OI over that same 3 year period.

We're just going to have to agree to disagree on the way forward for the company and how its capital should be deployed for the long term. So far, investors agree with me, as reflected in the price of DIS stock. The day after Iger was reappointed CEO (9/20/22) the stock was at around $100/sh. Today it's at 86. Meanwhile the S&P 500 has gained about 10%. It's true that the stock market doesn't make correct judgements over the short term. But it does set the value of the company, every trading day of the year. And long-term the market is never wrong.

 

[HokieRaven5]

We're just going to have to agree to disagree on the way forward for the company and how its capital should be deployed for the long term. So far, investors agree with me, as reflected in the price of DIS stock. The day after Iger was reappointed CEO (9/20/22) the stock was at around $100/sh. Today it's at 86. Meanwhile the S&P 500 has gained about 10%. It's true that the stock market doesn't make correct judgements over the short term. But it does set the value of the company, every trading day of the year. And long-term the market is never wrong.

I said nothing on how the capital of the company should be deployed. Just was pointing out that it’s not DPEP $ going to cover DMEDs losses.

Wall Street overcorrecting to their overreaction over streaming is what it is. If the Parks moved the needle on Wall Street it’d be moving up based on the parks being more profitable than ever, no? Wall Street only seems to care about the Media side of things right now and where it’s headed, and the dividend, and the next succession.

 

[Aluminum Falcon]

We're just going to have to agree to disagree on the way forward for the company and how its capital should be deployed for the long term. So far, investors agree with me, as reflected in the price of DIS stock. The day after Iger was reappointed CEO (9/20/22) the stock was at around $100/sh. Today it's at 86. Meanwhile the S&P 500 has gained about 10%. It's true that the stock market doesn't make correct judgements over the short term. But it does set the value of the company, every trading day of the year. And long-term the market is never wrong.

i think investors agree that Disney needs to turn things around and that's about it.

 

[Aluminum Falcon]

I said nothing on how the capital of the company should be deployed. Just was pointing out that it’s not DPEP $ going to cover DMEDs losses.

Wall Street overcorrecting to their overreaction over streaming is what it is. If the Parks moved the needle on Wall Street it’d be moving up based on the parks being more profitable than ever no? Wall Street only seems to care about the Media side of things right now and where it’s headed, and the dividend.

could we call it a streaming bubble?

 

[HokieRaven5]

could we call it a streaming bubble?

Probably, Wall Street got so enamored with how many subscribers D+ had early on.

 

[wabbott]

Wall Street only seems to care about the Media side of things right now...

I agree with this. And, imo, the uncertainty of the future of the entire media universe. Streaming has increased the library of 'content' many, many fold. And that is just that much more competition that new, original content has to compete against. How many tv viewers say to themselves, "let's watch a rerun of an old TV series that we used to like 40 years ago, instead of the new stuff that isn't very good."