Comments on the Comcast Deal

[Another Voice]

Let's just say that if one believes the whispers about, the Disney-Comcast deal that was being discussed for months and months was always considered a true merger, one that would benefit both companies. The "content and distribution" game can be played both sides of the field.

The question is how could Disney pay for a big merger? They will not issue more stock (and dilute current shareholder's position even more), they already have a Matterhorn of debt and the credit rating of a corner used-car lot, and does anyone believe that Naked Mike can run a cable company well based on Disney's performance? A Disney offer for Comcast would have to include an new CEO, and The Enemy will not allow that.

Expect Disney to make a run at Pixar or Yahoo! or a slightly more digestible company.

P.S. – Mr. Crusader…"Expose the reality of the industry and become labelled as an excusor."

Huh?

Exactly which planet hasn't heard the news that Hollywood is filled with talentless, greedy people? Hate to be the one to burst the bubble, but we all kinda got that already.

As far as I can tell, your basic position is that Disney should embrace and exceed Hollywood in its excess. The Disney should make ever dumber, even cheaper, even more demeaning movies than the norm because anything that make money for Disney is inherently a good thing.

The existing Hollywood studios are collapsing under their own weight and idiocy. Excusing Disney's championing of the that trend is only going to hurry Disney's complete failure. It seems, sir, you too are infected with the "anything for money" disease that is killing Hollywood.

 

[crusader]

Funny how you didn't answer my questions about Jackson.

No Voice,

My position is: Disney is part of Hollywood and has to play the same game of survivor within that cesspool every other production outfit does.

That means they need to balance the good with the bad and the ugly. That also means they need players who can compete and succeed not just as creative geniuses but as business tycoons.

That's the scale. You always tend to remark on one side and I'm seemingly always replying in the adverse. I don't disagree with your comments about quality so much as I disagree with your lack of reply about the realistic parameters surrounding your industry and how that interrelates to the actual pumping station which feeds the money stream.

You know - That stream where all the Burbank paychecks dwell.

I don't want to see Disney fail because they couldn't harbor a shark to ward off the predators. I want this company to equipt itself with whomever and whatever it takes to prevent extinction. I also want this company to operate all divisions with the best talent in the industry.

That's it.

P.S If the Hollywood studios are collapsing that's because the stream is overpopulated and a dam is about to burst. How do you propose Disney adapt and survive this next round of evolution without key players who can be ruthless if they need to and demonstrate solid leadership.

Not every form of creativity is displayed through art.

 

[raidermatt]

Maybe not so stupid after all.

Maybe not.

I still think it would be a purely defensive move, and would be ripped apart as not truly being in the shareholders best interest. Disney's stock would likely take a huge hit, losing its bump up due to being a takeover target, then losing some more as an attempted acquirer.

But who really knows what Eisner will try in order to save his bacon, or at least make a bigger deposit into his bank account.

That means they need to balance the good with the bad and the ugly. That also means they need players who can compete and succeed not just as creative geniuses but as business tycoons.

Fine, and they are sorely lacking in the good, and their bad and ugly ain't getting the job done.

 

[crusader]

Fine, and they are sorely lacking in the good, and their bad and ugly ain't getting the job done.

HA!

But you are exaggerating a bit. All they need is some brass and bullet to protect the good and things will turnaround.

The talent is out there ready for hire. The themeparks are making positive changes and the films of late have been very successful.

Animation and network television are the largest problems which I suspect they are working on.

Eurodisney is next and California Adventure will have to wait with only ToT right now.

It's funny how many individuals out there have taken the headlines as gospel and think Comcast now owns Disney. Most of what I'm hearing usually involves sombody recently dumping Comcast stock. Whoops!

Ah yes! That awesome world of breaking news we should all take a lesson from and learn to appreciate.

 

[wtg2000]

Irony: the Frontierland fort at DLP is called Fort Comstock!

An email from my brother:

LAZARUS AT LARGE

Comcast cashing in on porn

David Lazarus

If they wanted, Comcast subscribers could have watched "Table Top Sex" on the Spice channel Thursday night. Or they could have caught "Boob Mania 6." Or "Barely Legal 39."

Comcast, the nation's largest cable company, is one of the most far- reaching distributors of pornography, offering subscribers a moaning, groaning melange of what's euphemistically called "adult entertainment" -- and profiting handsomely from the deal.

Comcast's multibillion-dollar bid to take over Walt Disney Co., the world's most recognizable family brand, is thus eye-opening in more ways than one.

Critics say the co-opting of Mickey Mouse by a prominent porn purveyor would bestow a new level of legitimacy on an industry that, through the years, has crawled out of the shadows to become an accepted member of the business community.

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/02/13/BUGEN4VSS11.DTL

 

[YoHo]

Originally posted by crusader
My position is: Disney is part of Hollywood and has to play the same game of survivor within that cesspool every other production outfit does.

And why exactly do they have to play that game? Why can't they make a new game? It's happened before. It will happen again. Why are you stuck in this notion that the current Hollywood game is the only game in town?

 

[raidermatt]

The talent is out there ready for hire. The themeparks are making positive changes and the films of late have been very successful.

The talent's been out there.

You're looking at short term results, which are always going to vary. Always have.

Animation and network television are the largest problems which I suspect they are working on.

I know they are working on ABC because they told us two years ago they were working on it. Haven't quite worked it out yet, have they?

Of course, they are only working on it because they broke it.

Animation? Yeah, they are working on it... buy closing their successful studio, and losing a relationship with the real talent in the industry.

Ah yes! That awesome world of breaking news we should all take a lesson from and learn to appreciate.

Big picture, my friend.

The point is that the company is vulnerable becuase of mismanagement. Whether Comcast goes through or not doesn't change that.

 

[DisneyKidds]

The point is that the company is vulnerable becuase of mismanagement. Whether Comcast goes through or not doesn't change that.

Matt, I really hope this is how the Board and the Street read the events.

It would be terrible if Comcast's "failure" to acquire Disney is interpreted by many to mean that Disney wasn't so vulnerable afterall - a conclusion we don't want heading into the Stockholder's meeting. The last thing we need is for Eisner to have ammo and the Board to have a reason to prop him up.

I agree with you that the company is vulnerable and I don't think Disney has been putting in the effort they should be to "work on" the largest problems. While the Comcast thing may not be over, a "failed" attempt by Comcast could lead some to conclude otherwise. even though we know the truth .

There are just too many directions all this could go in at the moment. Fun to watch though................as long as the investments we have in Disney stock and DVC don't take a hit that is.

 

[crusader]

Originally posted by raidermatt
The talent's been out there.

You're looking at short term results, which are always going to vary. Always have.

Careful Matt. Analysts will prove Eisner is a genius in terms of long-term shareholder value for this company compared to the industry average. Disney's return has a great enduring track record particularly through the crash. The more you support this position the more favorable the big cheese appears to your viewpoint.

I'm looking at what's going on in real time. You can toss up the short term speech all you want but the bottom line is that any movement in a positive direction is exactly what this company should be doing right now.

What are you saying? They shouldn't have to?

You sound as if division problems are some foreign, unique concept to an organization and don't exist within the vast majority of corporations. That's a crock!

 

[MELSMICE]

Anyone hear the announcement today that Disney bought the Muppets?

 

[YoHo]

Originally posted by crusader
Careful Matt. Analysts will prove Eisner is a genius in terms of long-term shareholder value for this company compared to the industry average. Disney's return has a great enduring track record particularly through the crash. The more you support this position the more favorable the big cheese appears to your viewpoint.

But isn't this exactly opposite of what Roy and now IIS are saying. Einser has been piss poor for long term shareholder value for approximatly the last 10 years. Unless you intend to go 20 years back, but then you have Wells and Katzenberg and a million other differences. No, if IIS won't back him, you'll see the pundits back down.

 

[raidermatt]

Analysts will prove Eisner is a genius in terms of long-term shareholder value for this company compared to the industry average.

Only recently have analysts really gotten on Eisner's case... that didn't stop the stock from floudering for years prior.

If Disney's long term industry performance is the best (not saying that it is), that would explain why so many are investing elsewhere.

What are you saying? They shouldn't have to?

No, I'm saying the leopard hasn't changed his spots, so the best move for the company is a change in leadership.

You sound as if division problems are some foreign, unique concept to an organization and don't exist within the vast majority of corporations. That's a crock!

No, they exist elsewhere. Disney just hasn't been able to manage these issues (along with others) to the satisfaction of investors.

There are just too many directions all this could go in at the moment.

I agree.

 

[GrimGhost]

Interesting poll....

http://money.cnn.com/POLLSERVER/results/8976.html

 

[crusader]

But isn't this exactly opposite of what Roy and now IIS are saying.

You have to read between the lines.

The analysts are reporting on the performance in terms of the industry and the S&P:

http://moneycentral.msn.com/investor/invsub/results/compare.asp?Page=InvestmentReturns&Symbol=DIS

Roy is concentrating on the stock price which falls in line with the 10 year history. (click on the 10 year summary)

The real story is in looking at the financials over the past 5 years. This comparison is only the P&L but it does tell us a few things: Look at the increased cost of sales figures in comparison to sales. Yet income remained stable. That's the balance with the cuts.

http://moneycentral.msn.com/investor/invsub/results/statemnt.asp?Symbol=DIS

 

[Another Voice]

"I disagree with your lack of reply about the realistic parameters surrounding your industry and how that interrelates to the actual pumping station which feeds the money stream."

"How do you propose Disney adapt and survive this next round of evolution without key players who can be ruthless if they need to and demonstrate solid leadership."


People go to see good movies that interest them.

Those are the parameters.

It doesn't matter how ruthless the CEO is at cutting costs, what great leadership is shown in the board room, the financial marvel at creating new derivatives and how finding the country with the most favorable exchange rate.

All the public cares about is what flickers up there on the screen.

The realistic fact surrounding Hollywood is that the Pixars and the Peter Jacksons – the people that actually care about what they make – tend to be more successful than the churn 'em studios. That's why Finding Nemo was a massive hit while a string of movie made by ruthless, business savvy, key players (The Hulk, Matrix Revolutions, Charlie's Angels 2, The Haunted Mansion) all turned into massive financial disasters. Sure there are occasional flukes, but then again sometimes the million dollar slot machine pays off too. The question is do you want to bet the mortgage each month on a lucky pull?

Eisner worries so much about the financials because he knows nothing about making a good movie. It's easier to fret about what you can control rather than what you can't. Buying cable stations to show movies sounds good to business morons – but becomes pointless unless you can show movies that people actually want to see. Eisner focused on where he thought the easy money was; he did not understand (as most of the Major Media Monsters didn't understand) the basic dynamics. The Media Bubble was simply akin to the Internet Bubble – and now cold hard reality is setting in.

Disney needs to focus on high quality products that maximize their chance for returning high returns. Disney released 22 films last year – 2 were a hit (and they actually only made one of them). Don’t you think it'd be much more cost effective to make 10 films a year to get those 2 hits? It's the sharpshooter vs. the shotgun – and the bullets cost $100 million each.

The idea that one has to be big to survive is likewise just a myth. No one is going after Dreamworks. No one is going after Pixar. It's because the key to a successful takeover is that the new team can run the business better than the existing crew. Who is going to put up several billion dollars on the belief they can make better movies than John Lassiter and the rest of the crew at Pixar? And what is Dreamworks with Steven Spielberg?

Yet everyone knows a blindfolded monkey flipping a coin can make better decisions than Naked Mike. And that's why Disney is up on the block.

A Disney that was good at what it did would be invulnerable to take-over.

 

[crusader]

How do you know Jackson's model doesn't mimic Lucas'?

You know the story: Create a franchise and milk it for all it's worth.

And how do you explain the phenomenal box office success of the Adam Sandler and Mike Myers films along with the Scream and American Pie series? What about Elf? I could go on and on and on to demonstrate how time and time again lower quality cheap scripts are produced and generating major returns.

You're using Dreamworks as a model knowing full well what your position is on Shrek and that Katzenburg failed miserably with Sinbad. That seems contradictory to me.

The public pays for all diversions of entertainment. Some are hits some are solid gold flops because we decide spontaneously based on no calculated rhyme or reason.

All you guys care about is how your job is utilized in the industry. That's fine. I certainly can appreciate that.

But that doesn't support any of this philosophical idealistic drivel touted in a world which doesn't get why we go to the movies in the first place. To be entertained. Plain and simple.

The audience doesn't necessarily respond the way the artist perceives. That's always been the gamble. That's why there's so much thrown into the mix.

The parameters are: pay salaries - support the guild - and keep the cameras rolling - within budget. The rest of it is deal - deal - deal - barter - steal. And hope it pays off.

It's because the key to a successful takeover is that the new team can run the business better than the existing crew.

The key to a successful takeover has nothing to do with new management. It has to do with power.

 

[crusader]

It doesn't matter how ruthless the CEO is at cutting costs, what great leadership is shown in the board room, the financial marvel at creating new derivatives and how finding the country with the most favorable exchange rate.

Ok stop. You're only focusing on the CEO as financier. When I mention ruthless and strength, I'm talking about the art of the deal.

It is vital to have that level of solid leadership in a CEO in Hollywood.

I asked you how much Jackson's take was on LoTR. From what I've gathered it was a 10% gross on the films. You want to use him as the poster child for what everybody should be doing then let's explore this a bit more.

Jackson spent decades to get here with only the Frighteners making it to the box office and basically losing its' audience. The trilogy demanded 300 mil upfront to produce which was a hugh gamble on a guy with no track record.

So what is Peter doing for his next project? (which you failed to answer in a previous request) - a King Kong remake for Universal. How original. And he's getting paid an obscene, unprecedented contractual amount.

He's also considering making The Hobbit - which is why I correlated Lucas in the first place.

Here's the story.
http://sns.tribune.com/entertainmen...30,0,302421.story?coll=sns-ap-movie-headlines

This is your template for Disney to follow? How do you propose they do this without having the best brass in key positions to pull off negotiations which benefit the company in this new wave of screw the studio movie making?

 

[Another Voice]

Such hatred for Lord of the Rings.

What is your point sir? That only lousy movies make money so Disney is perfectly justified in shovling out dung like George of the Jungle 2? That Disney shouldn't bother with trying to make something people like because you didn't like Lost in Translations? That your rumor about Peter Jackson's share of LOTR upsets up - so Jerry Bruckeheimer's even higher stake in National Treasures and King Arthur is magically more justified?

Yup, Peter Jackson is remaking the original King Kong because it was the first movie that got him hooked on films as a child. It's been a life-long dream of his. And now he can do it. And yes - he made The Frigheteners, but he also made Heavenaly Creatures. But exactly how does this justify Disney's factory production of Bad Company and Reign of Fire?

You are demanding that Disney lower itself to the bottom - yet all the money is made at the top.

Hollywood is a gamble. All entertainment is a gamble. But some people try to err on the better side of the gamble - to trust the audience, to try and strive, to make what is good in hopes it will be popular.

Stuffed suits, like Naked Mike and his supporters, take a greedy and cynical veiw of their audience. They trick and pander. They cater to low tastes and drive down expectations. They fail most of the time, but there are enough quirks to make them fall for the false promise of easy money. They race in an endless spiral downward.

Sorry - I refuse to live in that world.

Mr. Crusader - if your veiw of Disney is Peter Pan 3 - Wendy Gets Some with Adam Sandler as Peter and Mike Meyers as Hook - then kill Disney now and spare the world your foolishness.

P.S. Have you ever made even a five mintue film?

 

[raidermatt]

The public pays for all diversions of entertainment. Some are hits some are solid gold flops because we decide spontaneously based on no calculated rhyme or reason.

Far too narrow a view... which is a pattern with your perspectives.

Yes, some successes, as well as some failures, are unexplainable.

But in the end, like just about anything else in business, its about odds and probabilities.

Invest significantly in quality, and do it right, and you'll have a better chance of more frequent success. Part of doing it right, of course, includes audience appeal. But it goes much further than just trying to make something easy that people will pay for, and its that piece that you are missing.

 

[crusader]

Matt,

I'm not disagreeing with you on most of that post. If I seem narrow minded it is merely in balancing the scales. Far too often here, I read comments which support a position not entirely representative of the situation.

I think the investment should be in quality as well as quantity. Disney released 22 films last year which employed more individuals than I care to count. If they scale that back to AV's proposal which falls more in line with the Pixar 1 per year ratio, what does that do to the operations of this company? and......

Doesn't that only mean that another studio gains market share while the Mouse shrinks down to nothing? Because the movies will continue to be released under the current formula we all see at our megaplexes.

It's not a feasible structure to work within such constraints without killing your ability to remain solvent on this level.