Comments on the Comcast Deal

[crusader]

The contention is that the model most companies are using with Hollywood is wrong.

Considering how long Hollywood has survived I wouldn't be so quick to dimiss the model. It's fueled by money, power, greed and manipulation.

Just because the artists/writers don't care for something doesn't make it any general contention. They knew what business they were getting into. What the heck are you talking about?

 

[raidermatt]

If Disney stock continues to climb, Comcast will have to increase that ratio considerably.

Yes, you are right, they will not get Disney for what worked out to be the $26.47 offered.

They knew that when they offered, and the investors knew it as well, which is why the stock immediately jumped beyond that mark, and is staying there (so far).

If it turns into a bidding war, Comcast could get pushed out of the picture. Its just that there won't be a scenario in the near future where Disney could actually acquire them, since the main reason the stocks are moving in opposite directions is the takeover bid.

 

[YoHo]

Originally posted by crusader
Considering how long Hollywood has survived I wouldn't be so quick to dimiss the model. It's fueled by money, power, greed and manipulation.

Just because the artists/writers don't care for something doesn't make it any general contention. They knew what business they were getting into. What the heck are you talking about?

How long Hollywood has thrived has pretty much zero to do with how the model has done.

The "Model" can pretty much be traced to the late 80's 90's with TWX/SOny/Disney and None of those companies are exatly humming along cleanly, nor do any of them consistantly produce blockbusters without the help of the small production companies.
Disney is traditionally a Production company. That is where there talent lies. Eisner is no Gerald Levine.

 

[lucky_bunni]

Originally posted by Another Voice
TimeWarner, Viacom and NewsCorp...might want to get even bigger just to support their bloat.

I love the use of "bloat", the perfect word to describe these awful companies (and their CEOs) forming all over America! It gave me a chuckle, thanks AV!

 

[crusader]

The "Model" can pretty much be traced to the late 80's 90's

No way. You make it sound as if everything Hollywood touched turned to gold in Walt's day and individuals like the Warner Bros, and Metro Goldwyn and Meyer never participated in greed, corruption, and manipulation to make money off hollywood starlets in exploitive cheap productions. Think Jane Mansfield.

Just because the CEO isn't the founder today and Hollywood has moved from the proprietorship it was founded on into a corporate regime doesn't make the game any uglier or the atmosphere worse.

 

[YoHo]

Dude, I didn't say that everyone was pure as the golden sun and nothing bad happened. Only that the basic buisness plan for how to run a hollywood company has significantly changed and that that model is a bad model.

Jack Warner, Metro Goldwin and Meyer were powered by greed to be sure, but they were small companies making and selling a single type of product. It simply worked better.

 

[crusader]

Alright I get it.

You think the smaller the company the better it operates. I contend any company can be managed and operated successfully on a divisional level and still consolidate under one portfolio to remain independent.

(there were 4 bros at Warner by the way - and they didn't get along)

So why aren't there any small guns left from the good old days? All we have now are the independents and they're struggling without some serious venture capital.

Because one false move can deliver a fatal blow if you can't make deals in Hollywood. It's not a blacklist. It's a black plague.

Money talks. BS walks.

You can blame it on mergers and acquisitions but diversity is really what keeps companies alive. Mergers are nothing more than cleverly disguised acquisitions where some fool honestly believed they were equally important to the other and lost.

Why can't Disney operate successfully the way its' structured now? It makes sense to me for a media company to retain holdings, particularly a network and have more leverage.

 

[Another Voice]

"Considering how long Hollywood has survived I wouldn't be so quick to dimiss the model."

Yep –

Paramount Pictures was first eaten by Gulf+Western and now it's in Viacom stomach.
Warner Brothers Studios was first chewed up by Time Life, then by AOL
Columbia Studios has gone from Coca-Cola to Sony.
20th Century Fox fell apart more times than a Joan Rivers face lift before it was consumed by News Corp.
Universal has been owned by companies from three continents.
MGM was bought by an insurance company before being pawned off to an oil tycoon who decided he a Veags casino was a better investment.

Yup – the Hollywood model is working just the same magic for Disney as it worked for all the others.


"Why can't Disney operate successfully the way its' structured now? "

Because they built a massive corporate sturctrue stuffed with money-bleeding, ego drive businesses on the assumption they can turn out a Lion King, a Pirates and a Nemo each year - but are unwilling to put in the effort required to make the kinds of films that will give you that kind of return.

 

[YoHo]

Originally posted by crusader
Alright I get it.

You think the smaller the company the better it operates.

No, No no no no no no no.

I think that Hollywood runs on a buisnessmodel INCOMPATIBLE with multi-arms. Leverage and synergy and all those buzzwords that give Eisner his jollies DON'T WORK. At least not as a core buisness plan.

Making movies successfully cannot be managed the way running a television company or a publishing company.

It is by its nature a cottage industry very incompatable with other types of buisness.

This is why most of Hollywood isn't producing as much good product as they used to and the good companies that do produce are small affairs that only distribute with the big houses.

 

[bretsyboo]

I would just like to say that that is one manly parrot.

Furthermore I think everyone of you are wrong about everything you have said, and I am not willing to let you challenge that.

 

[Lobey]

Two great articles on the BBC Web site this morning:

The end of the Disney fairytale?

So where did it all go wrong?

Many analysts would immediately point the finger at Disney's 61-year-old chief executive Michael Eisner, and it has to be said that there is a great deal of evidence against him.

Profile: Michael Eisner

But although, from time to time, Mr Eisner's excuses may have been convincing, it also seems clear that he has made several inexplicable blunders that have cost Disney dear - for example, his much publicised failure to salvage Disney's lucrative distribution deal with the computer animation firm Pixar.

 

[vernon]

Another interesting comment, from Brian Roberts of Comcast today was that he would plan to repair the relationshiip with Pixar, advertise the themeparks on Comcast's cable services and offer Disney films on the pay per view chanel. Those acts/plans seem to belong more to a company that is looking to spend money (particularly on animation and park) than one that's looking to sell off those assets at the first opportuninty.

Everyone is getting very excited about it "not being Disney" anymore if Comcast goes ahead, but let's not forget that the last Disney working on the board left because he was forced out by Eisner. It's not "Disney" at the moment people, it's a publicly owned company with a board of directors that seem to be yes men to a chairman that is only interested in lining his own pockets. A man that seems to realise his time is limited and wants to screw as much out for himself in as short a time as possible. What Disney needs is a board that's looking at the long term interests of the company.

I have a feeling that Eisner was working/thinking about selling to Comcast (if not, why Philly?) anyway but his price was too rich and Comcast have seen an opportunity to get the company without greasing his palm. I can see where a lot of the merger makes sense in joint interests and that the parks and animation areas can be left as a financially viable separate entities within the general umbrella of the holding company. They can be major contributers to the overall figures so I see no need for them to be sold. If, as seems to be the case, Comcast think they can be greater contributers with some investment and better management we all benefit.

 

[Galahad]

Originally posted by crusader
YoHo, my problem with Jobs is this:

http://www.fastcompany.com/magazine/78/jobs.html

There is a need to be fluid in a company. In Hollywood, production is assembly driven to sustain the industry. Every once in a while creativity becomes a substantial investment but it's volatile and audiences are fickle.

If you look at Pixar, they have the ability to afford the time and money necessary to perfect their work one project at a time, because they aren't burdened by the same financial demands other producers within the industry are - yet. And that's a major YET!!!

They're a 20 year old company with only 5 major releases to show for it. They exhaust their cash funding payroll. Their joint venture relieved them of a great deal of pressure but not anymore and now they have their hand out.

And don't discount Microsoft's beating Apple in the on-demand market. Why would you want Disney tied to a deal with a tech company who can't compete commercially in a worldwide user market? Do you really think Jobs will bow to Gates?

How do you prevent Disney from becoming the proverbial beta in a vhs market under this umbrella?

Yeah.....what he/she said.... Jobs creeps me out at least as much as Eisner does......

 

[crusader]

Correct me if I'm wrong AV but last time I looked Disney did
release a blockbuster motion picture by the name of
"Pirates" just last year in 2003.

I was referring to their holdings by the way - not the management when I posed the corporate structure question.

And yes, you are correct that all the proprietors who founded the hollywood studios have gone the way of the stepford wife. Why? Because power, corruption, greed and manipulation has always been the business model for hollywood and you can't implement it without becoming a faceless souless money pumping machine.

That's what makes your world go round.

See ya at the box office.

 

[Another Voice]

"Correct me if I'm wrong AV but last time I looked Disney did release a blockbuster motion picture by the name of "Pirates" just last year in 2003."

And the blockbuster for the summer of 2002? - Reign of Fire?

Did the $100 million gamble on Bad Company get the quarterly number up?

And this up coming summer - is Eisner going to confidently tell the shareholders that National Treasures is going to push the company to his promised 30% growth rate. I mean, he did call Pearl Harbor a "sure thing" and look how the stock soared after that smart move.

Can you guarantee a blockbuster big enough and in each and every quarter that's goign to be big enough to pay off an $11 billion corporate debt?

Please, Mr. Crusader, tell us how this business model works!


"Because power, corruption, greed and manipulation has always been the business model for Hollywood and you can't implement it without becoming a faceless soulless money pumping machine."

Yes, that evil gnome Peter Jackson made a billion dollars from his cynical, mass produced The Lord of the Rings ploy that tricked the audience into seeing a passionless, shoddy movie. Everyone knows that John Lassiter doesn't really care about the movies, all he cares about is selling plush of fish.

I mean it must be so obvious to you that Disney/Hollywood crunch them out machine is the only way to go. Ben & J-Lo Gigli is a money-making machine. Everyone around is marveling the numbers that Win a Date With Tad Hamilton is doing. And look at the heights of corporate success that Warner Brothers reached with two Matrix movies this year. Must have taken the sting out of loosing both Daredevil and The Hulk - each a super winner.

Nope, Mr. Crusader, your cynical "it's all about the money, so Disney has a right to make crappy movies" has proved wrong time after time after time. That attitude is an excuse used by talentless people to explain their laziness, and for fanboys to excuse away their devotion when it is not earned.

Disney is in this mess because too few people want to see Disney movies, watch Disney TV stations or go to Disney theme parks. The way out of the problem is for Disney to offer products the public want to buy - rather than products people might be willing to settle for.

That will get them to the box office.

See ya' at Disney's Jersey Girl.

 

[crusader]

Here we go again.

Expose the reality of the industry and become labelled as an excusor.

Nice.

How much Money did Jackson personally pocket by the way? And what's this I hear about his latest project?

Sure I've said it before, sometimes creativity is granted the bucks.

Now answer a few questions for me: How many movies are playing in theatres right now?

How many movies were released into theatres in 2003?

How much money was spent to produce, market and distribute all releases in your industry in 2003?

Now take the total box office take - and map out where it went by recipient so we can see who really pocketed how much.

Then talk to me about how lengthy production projects which are consumed with creativity is the only true profitable way anybody is making money in your industry.

 

[lodgelady]

I have a feeling that Eisner was working/thinking about selling to Comcast (if not, why Philly?) anyway but his price was too rich and Comcast have seen an opportunity to get the company without greasing his palm.

I am wondering if that is one of the triggers to Roy and Stan having to leave the board. Maybe Eisner was paving the way for this Comcast deal.....also maybe he had this deal in mind when he decided he could keep playing hardball in negotiations with Pixar?

At any rate, if we here on the Rumors and News board were getting wiffs of this Comcast merger news months ago, I am sure it WAS NOT a surprise to any Disney Co. execs, including Roy.

 

[hulabird]

Eisner's Last Stand
The Motley Fool - February 13, 2004 10:10

If you are Disney (NYSE: DIS) CEO Michael Eisner, time is not on your side. Two months ago, Roy Disney Jr. and Stanley Gold started flaming your performance as they stepped down from the company's board. Last month, it was Pixar's (Nasdaq: PIXR) Steve Jobs slinging pain as he broke off contract negotiations for what had been a lucrative partnership for Disney. This month, it was Comcast (Nasdaq: CMCSA) arguing that your company's assets would be better milked with fresher hands. Next month? Maybe you should call in sick to what will be a heated annual meeting.

With monthly dissidents like these who needs a calendar?

It's pretty clear now that Eisner's days as the head of Disney are numbered. Don't worry, he's packing a beauty of a golden parachute. The only thing that may hurt on the way out is swallowed pride.

The shame here is that Disney was starting to look pretty good in the near term. Fresh attractions are being constructed at the parks just as the tourism industry is starting to pick up. ABC's ratings are still in the cellar, but the ad market is improving, and General Electric's (NYSE: GE) NBC will have some voids in the fall season. Thanks to the surprising success of Pirates of the Caribbean, the company's brand name in live action flicks got some needed dusting. And, sure, Pixar may be ready to bolt come 2006, but it's still got two more features to release through Disney's distribution channels.

So if the mad rush to trip up Eisner almost feels orchestrated, well, it is. Everyone smells blood and waiting for the clotting process may make the hunt obsolete. Roy and Stanley realize that their voices would grow quieter as Disney's fiscal performance grows louder. Pixar's bargaining chips wouldn't be as heavy in demanding as much as it had, if Disney wasn't perceived as such an in-house lightweight in animation of late. And Comcast? If Disney's fortunes were to improve in the short term, the reasons to sell would diminish as the asking price would spike.

But that doesn't help Eisner now. He's caught in the web. He can't argue that Comcast's offer is insultingly low because his own efforts couldn't get the share price that high. He can't afford to lob shots at someone like Roy who bears the family name of the company he's running. The thorny ripcord is the only way out. Sure. It will hurt. But then the clotting process will have all the time in the world to heal.

Longtime Fool contributor Rick Munarriz owns shares in both Disney and Pixar. He would also like to point out that Pixar's excellence earned it a recommendation in Motley Fool Stock Advisor last year, and that a revitalized Disney may be worthy of that same kind of analytical loving.



While Disney's latest animated feature tanked at the box office over the weekend, can Disney still emerge as the Teacher's Pet? Is SaveDisney.com productive or counterproductive to the future of Disney? All this and more -- in the Disney discussion board. Only on Fool.com.


(Just some info I saw today on my broker's site.)

 

[one_cat]

Anyone read the article in the la times today?

One day after Comcast Corp. ripped the cord on its unsolicited $51-billion bid for Walt Disney Co., Comcast Chief Executive Brian L. Roberts and top lieutenant Stephen B. Burke flew West to meet with Disney and Comcast investors and deliver a simple message: They'll walk away before they'll overpay.

"What we're not going to do is go crazy to get this," said one person close to the Comcast camp, describing a key point they would make to investors. Roberts and Burke were in Denver on Thursday and were expected to call on money managers in Los Angeles today.

Yet Wall Street continued to bid up Disney shares, driving the price as high as $28.41 on Thursday, the best level since mid-2001. It closed at $28, up 40 cents on the New York Stock Exchange, after soaring $3.52 on Wednesday.

Disney shares now are trading at a 19% premium to the value of Comcast's stock-swap offer — seemingly a sure sign that investors expect Comcast to raise its bid, or to be topped by another buyer.

Some Disney shareholders said the stock was rising for another reason: They said Wall Street was favorably reevaluating the company's assets and the level of earnings they might produce in coming years, with or without a significant restructuring move by Disney management.

The Comcast offer was "a value-awakening event" for Disney, said Robert Olstein, manager of the Olstein Financial Alert stock mutual fund in Purchase, N.Y., which owns about 1 million Disney shares.

Olstein said his analysis of Disney's assets and earnings power gave the company a value of $31 to $32 a share.

The range of $30 to $33 was widely used by other money managers and analysts as well on Wednesday and Thursday.

The Comcast bid, however, valued Disney at $26.47 a share as of Tuesday. The value of the offer — 0.78 share of Comcast for each Disney share — has declined as Comcast's stock has dropped since the bid was made. Comcast slid $2.70 on Wednesday and $1.17 on Thursday, to close at $30.06 on Nasdaq.

At Comcast's stock price Thursday, its offer valued Disney at $23.45 a share. That isn't enough for Olstein, among others.

---

Looks like stockholders are valuing Disney a little higher than comcast expected. At this rate if the deal does happen and comcast sweetens the pot sufficiently, disney shareholders would own comcast not the other way around. With todays market on the dis stock (down 79 cents) it doesn't look like anyone is really taking this seriously anymore.

 

[KNWVIKING]

Maybe not so stupid after all.

By Damian Reece City Editor
Independent Digital (UK) Ltd
14 February 2004

Disney shareholders are bracing themselves for counter bids to emerge next week for the media empire under siege from a hostile bid from the cable television group Comcast.

One option being talked about on Wall Street, however, is Disney reversing the tables and launching its own counter bid for Comcast.

Were Michael Eisner, the Disney chief executive, to adopt the so-called Pac Man defence - named after the computer game - it would create as big a sensation as Comcast's original bid for Disney. But analysts believe it cannot be ruled out as one of Disney's possible defence strategies.

"It is as likely as any of the other bidders being touted around," said Angela Kohler, a media analyst with Federated Securities Corporation, the US fund management firm. Potential rivals for the Magic Kingdom are expected to spend the long President's Day weekend preparing their own offers to counter Comcast's all-share bid which was unveiled on Wednesday.

Putative bidders mentioned by analysts include Time Warner, Pixar, Viacom, Liberty Media and even Microsoft, although several of these would face stiff regulatory hurdles and would be forced to make material disposals of existing TV interests before being allowed to buy Disney. Disney already owns the ABC television network, a string of cable channels and the ESPN sports network.

Although a Pac Man counter bid for Comcast would probably struggle to find support among Comcast shareholders, Mr Eisner has already referred to the possibility.

Asked by an analyst on Thursday about the company's acquisition strategy, Mr Eisner joked: "Acquisitions? Oh, we're buying Comcast. No, terrible answer. Turn off those cameras."

In answer to questions over whether Disney needed to join a distribution company such as Comcast, Mr Eisner said: "There are great distribution companies, there are great content companies. They can be together. They don't have to be together. We feel we're running a pretty good company as it is."

Comcast's shares continued to fall yesterday, ending down 16 cents at $29.90. Its stock has fallen by 12 per cent in the three days since it unveiled its bid, wiping more than $6bn off the value of its all-share offer. Although Disney shares fell almost 4 per cent yesterday, they have gained 12 per cent since the offer was revealed and are still trading above the offer price. Comcast's proposed takeover deal, including the assumption of almost $12bn debt, was worth $60bn last night.