Comcast makes offer to merge with Disney

[caribbeanme]

comcast's ceo has been saying 15%. his valuation may be different, he may be wrong, or he may be downplaying the parks. we'll see if that number changes down the road...

 

[wtg2000]

This reminds me of the expression, "better the devil you know than the devil you don't." (Or as Buffy quips - "what happens when you know them all?")

So, which do we want?

It struck home to me last night watching the news. They showed Disney - parades, rides, corporate HQ with 7Dwarfs statues. Then they showed Comcast - a cable truck and an HQ straight out of your local industrial park.

Even with the parks it's a case of what they can do for Comcast's bottom line. Is there even a saviour out there that will lavish on the parks the kind of respect that Disney fans expect? In this day and age of corporate business I doubt it.

 

[crusader]

There's a savior out there.

Someone making inroads in plastic land who grew up with the same passion for this company many here have.

Someone in the neighborhood stuck on a corporate ladder a rung or two down silently networking while strengthening and assisting some other CEO.

Someone with credibility and source.

 

[tfc3rid]

Who? Steve Jobs? Jeff Katzenberg?

He better show up soon...

 

[crusader]

You're looking in the wrong place. Steve Job's doesn't have a passion for Disney so where's his drive going to come from? Is he going to continue to market his computer business or transition it into an in-house art/tech overhead division similar to WEDWAY completely subsidized by operations and licensing deals? and............

What name does he use on future animation releases?

Maybe he's tired of running Apple but gets to keep it anyway using Disney. I'd rather see Disney gobble him up.

I don't know enough about Katzenburg's track record. Sinbad certainly didn't help the Traditional Animation campaign but Speilburg sees something in him. What else is he good at?

 

[noblemickey]

Eisner and Frank Wells saved Disney from the scrap heap a while back with the financial backing of Bass Brothers. Maybe there is someone else out there who sees a real opportunity to make some money and keep Disney, Disney. They might be able to sell off some lesser performing divisions or those that don't compliment the whole to make a Disney saving deal possible. I sure hope so. I just don't think it will be best for those of us who go to WDW frequently or the other Disney theme parks, to have an even bigger corporate GIANT who doesn't care much about the theme parks because they are even a smaller piece of the pie. Can you see a deterioration of the parks because they don't mean as much to a Comcast or other Corporate Giant? Maybe Roy Disney and Mr. Gold know an individual or individuals that have very deep pockets who can once again come to the rescue. Who knows, maybe even Eisner or Katzenberg, etc. might put something together. The last time a white knight appeared we had a decade or more of real success. Certainly a lot of reasons go in to why that success occurred but it does show the potential for someone or someones to come to the rescue. For those who say it doesn't matter who owns Disney, shame on you and your callus attitude toward a true icon of Americana..

 

[wtg2000]

One editorial I read said that Comcast really wants ABC. I would think they also want ESPN, and the Disney film library. I wonder if there's a chance Disney could sell them ABC, ESPN and the other broadcasting segments and keep the Disney core.

 

[DisDuck]

just a comment on Burke. The quote that I read used the 'squeeze' not 'increase' revenue by 800m to 1.3b. 'Squeeze' does not sound good to me. Seems more like what some folks having been saying about Eisner.

 

[*Robin*]

Alright, I'm sorry if this is an idiotic question, but can someone explain to me a "hostile" takeover?

Does this mean they just come in and take over because they can, and have the money to back it up, and does the board have any say? I have no comprehension of this whole thing.

What are the real odds that it's actually going to happen? Reading through all this, I'm really a bit horrified at the whole thing...

 

[HorizonsFan]

Well, since this has brought many others out of retirement, I thought I'd join the party...
I think we've all known something had to give for a long time now. I personally didn't think that Eisner would leave on his own and was too powerful to be forced out, so this is the logical outcome.
There are only a few companies with the power to takeover Disney. None of them are the best choice from a theme park POV, but things couldn't go on like they are for much longer without doing permanent damage to the Disney name.
So the way I see it, it's either a slow death by milking from Eisner or the possibility that things could return to their former glory. As slim as the chances are that the theme parks could be the way they once were, they are zero with Eisner at the helm.
Which is worse; stagnation or the unknown?
Alright, Baron. It's time to speak up now...

 

[YoHo]

A Hostile Takeover means the company trying to take over bypasses the board and goes directly to the shareholders.



As to the Value of the Disney Name and the Film Library.
I'm not convinced either has much value to Comcast.

They don't need to own the library to have the pay-per-view rights and Eisner has made the Disney name sinomonous with Crap, Snowglobes and plush for years. If all they want is the Television and cable assets and don't care about the content creatio, then Disney the name is useless.

 

[dkostel]

Pardon my ignorance - exactly what does it mean "going directly to the shareholders"? Will we all be voting on this (I can't even get my annual report mailed to me).

 

[caribbeanme]

hey robin + dkostel,

this page on www.mouseplanet.com, about a quarter of the way down, does a good job of explaining a hostile takeover...

http://www.mouseplanet.com/dan/bm040212as.htm

there wouldn't be a vote, but if you decide to sell to comcast, then you've "voted" yes to the merger. oftentimes, in the case of companies with investors with large stock holdings, a few of them selling all their stock can end up making the difference and giving the acquirer control of the company (or more than 50% of shares).

same thing for voting-- now that eisner is facing a reelection vote, a few institutional investors following the advice of analysts/consultants (for example, institutional shareholder services or iss) to vote "no" on eisner's reelection can make a difference..


hope it helps!

 

[*Robin*]

Thanks so much! That's exactly what I wanted to know...

I really should get over there more often!

But at least NOW I get it...

thanks!!

 

[treesinger]

Originally posted by barbeml
Comcast is a wretched company. Their business practices border on the criminal. They show blatant contempt for their customers, from the executive suite to the customer service line. Their services are unreliable. Their employees are rude and cluelesss.

I can't see any good in this, either.

Perhaps it depends on where you live. I've found Comcast to be extremely reliable (in the last couple years) in their cable and broadband services. I've never been treated with contempt. Service is slow at times, but if that is the only fault I can find, I can't consider them wretched.

That's not to say that I haven't heard horror stories from others, but my experience has ben good in general.

That said, I STILL don't want Comcast Proper to run WDW. It will only work if they allow them to have independence like the Flyers.

 

[barbeml]

treesinger--lucky you.

If it was only the constant cable outages (Superbowl Sunday was the most recent) and the fact that the cable modem at work goes out every single day, that would be one thing.

Just before leaving for WDW 2 years ago, I made the mistake of paying my cable bill EARLY. MY reward? Six months of threats and collection letters from Comcast, even though my bank and I sent them proof of payment (the check they cashed) a dozen times (three times from the bank directly). I made dozens of phone calls and wrote at least six letters (copied to their corporate offices in Philly).

Never once did they admit that they credited my payment to the wrong account, despite the proof of the cancelled check. After six months and countless hours, I decided to fax the "custromer service" office the whole story with supportung documents every half hour until someone called me. I started at 9AM--I did not get a call until 6:00 that night, and the woman finally said they must have made a mistake, and this was the first she heard of it. Right.

To add insult to injury, I received a VERY NASTY letter from a VP in the Philly office basically saying the billing error was all in my imagination.

This is just the worst example of my dealings with them. Promised credits for outages have never materialized.

If cable contracts were not monopolies in NJ, Comcast would be out of business here. Our Township held a hearing on renewing their contract. They were flooded with complaints, but the right palms were greased and nothing has changed.

Sorry for the long post.

 

[treesinger]

Ok, let's dissect...this is the press conf. that Comcast held. You can see it at Jimhillmedia.com

BRIAN ROBERTS president and CEO of Comcast

We think that we can achieve things for our customers that will allow them to access the best of the Disney content, the best of the ESPN content, the best of ABC and Miramax and all the wonderful library and new content in the years ahead

First and foremost, this is about broadcasting and broadcast content.

We have invited, you know, several members of the Disney board to join the Comcast board and we really want to try and see if we can get the company off to a terrific start.

I really really want to see this list!

The Walt Disney Company is a leader in entertainment, obviously, with kids, sports, news and movies. The four most important areas for content for customers, whether they're getting that content from television or any other medium. Obviously, the brands are legendary with Walt Disney and what they've created. And we're very respectful and mindful of the incredible brand and the institution that is the Walt Disney Company.

Ok, I can accept that. Let's hope they follow through the way we want them to.

That -- to me and to us -- is what happens in the space that we operate in and we think that our company is ready for this rather large and dramatic next step. We're very fortune -- in order to figure out how to make it work that we have, who just handled our last large step, Steve Burke. President of Comcast Cable as David mentioned. Who worked at the Walt Disney Company for 12 years and has worked in three of the four divisions that Disney has in senior leadership roles. And Steve is very intimate with where Disney's been, where Disney is and where it might go in the future. So it gives me great pleasure that one of the ways that we're feeling optimistic about where we can take this company is the culture that we've created to attract people like Steve Burke

If Burke really is this good, then maybe he is going to turn into the Disney President under Comcast management. Although, I get the funny feeling that Burke may be the one who sold this idea to his superiors in the first place.

STEVE BURKE

And we've identified two major categories of improvements that derive from putting these two companies together and I'll go through each of them....

The first category is restoring the operating performance at the various Walt Disney Company divisions to where it was not too long ago. If you look at the ABC network and owned stations, ABC is a weak No. 4 (etc.)...

The second area which we feel we have real expertise is by improving the performance of the cable channels that the Walt Disney Company currently owns

This should scare us to death. That the first two areas that they focus on are NOT the parks, animation or the legacy.

But -- more importantly -- I think we've identified a number of thing that we haven't be quantified that we believe are ways that the Walt Disney Company's operations could be significantly improved...

Since about 1999, the Disney animated studios have not produced the kind of quality product. And our feeling is that the Disney animation business is absolutely central to the heart of what the Walt Disney Company is...
And also to reach out to other companies who make animated, quality animated product like Pixar and others. To try to make sure that -- over time -- the Walt Disney Company regains its position as THE place for great children's animation. ...
Animation drives the Walt Disney Company. It drives the success of the consumer products businesses and the theme parks. And we feel that it's very, very important that that animation business be supported and cause it to thrive in the future...

The second area where we think that there's room for revitalization and improvement are the Disney theme parks. It's hard to think of a product or service in the United States that families love more than the Disney theme parks. And we believe that there are ways to revitalize those businesses, restore some of the creative spark to the attractions and hotel and concessions side of those businesses. And also cross-promote and advertise more aggressively.

Ok, they talk the talk, but it sounds like they haven't thought that part through. That is also scary since Burke was such an integral Disney guy not so long ago.


More later...

 

[treesinger]

More from Steve Burke...

It's what can you do -- let's assume you make improvements to the Walt Disney Company's operations -- what can you do just by putting these two companies together?...
The first and foremost area of priority, I think, will be launching successful new cable channels

Yikes!

The second area ... We believe that television is changing very rapidly due to the introduction of new technology. The cable industry is almost fully rebuilt. Digital technology is being rolled out on the cable side. The satellite companies are rushing to get more interactive features. And our feeling is the Disney library, the ESPN asset and -- of course -- ABC and all of its various properties could be tremendously valuable on these new platforms. And that's a way to create value for the Disney assets. It's also a way to create value for Comcast Cable.

Follow the bouncing ball. "ESPN and ABC".

We think that the Disney movies and attractive windows and video on demand makes a tremendous amount of success. We think time shifting ABC product

Still following the bouncing ball?

What we're finding is people love the ability to pause, go backwards or fast forward with television. And we intend to give them that ability throughout our footprint. And I believe that most cable companies are going to try and do the exact same thing. So that should be a real opportunity. Now and -- of course -- ESPN and all of ESPN's brands and the ability to make those interactive as television evolves that way.

Bouncing ball, bouncing ball...

Wouldn't be wonderful if you could have a subscription on demand package of Disney programming for your kids? Would people pay $9.95 a month for that? I know I would. I have 5 kids and the idea of being able to give them more Disney product would be very exciting for them

*sigh* I don't know WHAT to say.

But I think the same thing could be true for ESPN or ABC. All of those products, I think, are waiting to be further used on all of these new technologies for consumers benefit.

Boing! Boing!

But E! Entertainment, Style, the Golf Channel, Outdoor Life, the Comcast SportsNet. We're launching a video game channel called G-4, another channel called TV One. This is an area of the business that we feel we understand. We have a proven track record. And we believe the combination of our expertise in handling assets and experience and the wonderful treasure trove of assets inside the Walt Disney Company would be a great thing for both companies and our shareholders.

Let the pillaging begin!

More later...

 

[treesinger]

more from Brian Roberts Q and A

Q: Can you discuss the extent to which your offer is opportunistic? In other words, is your timing in any way dictated by the turmoil that's going in Disney right now? Would you be making this offer if this were not going on at this point?

That sounds like an old-fashioned professional dodge.

Q: Have you spoken with Roy Disney and have his impression on the deal at all?

Don't know if I believe him...

Q: If this merger were to take place, how long do you think it would take? And what will consumers benefit?

A: Okay. Um, I think that these things tend to take about a year. You know, for ... Maybe a little less. But typically, that's what about AT&T Broadband took. That's what Newscorp / DirecTV took.

I think what consumers get is very ... is a great question. Is pretty fundamental.

First of all, consumers want to control ... the Internet, to me, proves that consumers want to be able to control what they get, when they get it, how they get it. They want access to lots and they want to do it on their schedule. And there are billions and billions of websites that have thrived with giving people choice.

Comcast has all been about -- since 1962 in Tupelo, Mississippi. Where the company got its first community antennae television system -- was giving people more choice in television. Today, we offer hundreds of channels. Tomorrow, we want to give you video on demand.

We've doing video on demand in Philadelphia for about 9 months now,a year. We have 3000 hours plus of content available. Some of it's NBC, some of it's cable channels, some of it is HBO on demand, movies. Not a fully rich line-up. But it's a start.

The average digital customer in Philadelphia inn the last month, January, half the customer used video on demand 13 times a month on average. We believe the way people interact with their television is absolutely going to change in the future. And consumers want to get the content ...

Well, high definition sets are selling 10 to 20 thousand a week. High definition subscriptions. Broadband? We're selling 30,000 hook-ups a week the last year. More than we thought and more than we did the year before.

The content -- the richness of the sports, the movies, the news, ABC. All the wonderful content changing and being experimental. And moving windows, letting people have on their high definition TV sets. Yeah, you can get there eventually.

But if you're in one company working together, it accelerates that. And I really believe that it's a competitive world. We are trying to give the consumers choice. That's who's going to win.

We have satellite. 20 million homes in America bought a satellite dish. DSL from the phone companies competes with our high speed internet. Disney competes against other content companies. And the question is: By working together, can you make your products more desirable to customers? And then they're going to take it.

Not a single mention of the parks or future animation. Uh-oh.

Ok, that's all for me on the press conference.

 

[treesinger]

Originally posted by barbeml
treesinger--lucky you.

If it was only the constant cable outages (Superbowl Sunday was the most recent) and the fact that the cable modem at work goes out every single day, that would be one thing.

Just before leaving for WDW 2 years ago, I made the mistake of paying my cable bill EARLY. MY reward? Six months of threats and collection letters from Comcast, even though my bank and I sent them proof of payment (the check they cashed) a dozen times (three times from the bank directly). I made dozens of phone calls and wrote at least six letters (copied to their corporate offices in Philly).

Never once did they admit that they credited my payment to the wrong account, despite the proof of the cancelled check. After six months and countless hours, I decided to fax the "custromer service" office the whole story with supportung documents every half hour until someone called me. I started at 9AM--I did not get a call until 6:00 that night, and the woman finally said they must have made a mistake, and this was the first she heard of it. Right.

To add insult to injury, I received a VERY NASTY letter from a VP in the Philly office basically saying the billing error was all in my imagination.

This is just the worst example of my dealings with them. Promised credits for outages have never materialized.

If cable contracts were not monopolies in NJ, Comcast would be out of business here. Our Township held a hearing on renewing their contract. They were flooded with complaints, but the right palms were greased and nothing has changed.

Sorry for the long post.

Sounds like something I went through with Aetna/USHC.