DIS Shareholders and Stock Info ONLY

[wabbott]

https://variety.com/vip/how-paramou...d=48&cx_testVariant=cx_1&cx_artPos=1#cxrecs_s​

How Paramount+ and Peacock Could Succeed in Streaming After All​

by Tyler Aquilina
November 14, 2023 - 6:00am PST

One longstanding question of the streaming wars has been whether the proverbial lightweights among the major combatants — namely Paramount+ and Peacock — could truly fight in the same weight class as the business’ heavyweights.

With subscriber bases a fraction of the size of Disney+, and far smaller even than that of middleweight competitor Warner Bros. Discovery, it has long seemed that the two services were not long for this world. Indeed, VIP+ questioned at the start of this year whether their parents, Paramount Global and NBCUniversal, respectively, should be in the direct-to-consumer business at all given the challenges and pain seemingly required to achieve the necessary scale for success.

But achieving that scale, or at least attempting to achieve it the way these companies have been, may no longer be necessary. As the landscape of the entertainment business has shifted dramatically this year, a new potential path forward for Paramount+ and Peacock is becoming clearer.

Much of that way forward is tied to the end of the peak TV era, which fueled the birth of these platforms in the first place. While the heady streaming gold rush made it seem logical to spend exorbitantly on a flood of premium content, in hindsight it never really made sense for every studio to try to build robust slates of prestige direct-to-consumer programming.

The output of Paramount+ and Peacock was always more trickle than flood anyway. Between 2020 and 2022, Paramount+ released just 94 unique series (including those it put out as CBS All Access), while Peacock released 119; in the same window, (HBO) Max produced 174, while Disney+ and Hulu released a combined 241.

Now that every studio has declared its intent to pull back on content spending, there’s even less need for the smaller players to invest heavily in premium programming. Paramount+ and Peacock would benefit far more by leaning into their strengths, which the former already seems to have realized: It’s been cutting down on expensive dramas outside of “Star Trek” and “Yellowstone” spinoffs, by far its most popular properties.

But perhaps these platforms’ greatest strength lies in their strong ties to their corporate parents’ linear TV operations. Peacock and Paramount+ offer livestreams of users’ local NBC and CBS affiliates, respectively, including the crown jewel of linear TV — NFL broadcasts — and other live sports.

It’s no coincidence, then, that the services’ biggest months of subscriber sign-ups were tied to major sporting events, per data from Antenna. The biggest spikes for both Paramount+ and Peacock occurred when their respective broadcast sibling aired that year’s Super Bowl, and “moments accompanied by NFL games are responsible for 10 of the 15 spikes identified” in the past two years, Antenna analysts wrote in a recent report.

Not only that, “Beyond NFL football, Antenna data indicates a diverse set of live sports — including the Olympics, UEFA, the [FIFA] World Cup, and more — driving acquisition for both Paramount+ and Peacock,” the report added.

This is indicative of the two platforms’ key target audience: cord-cutters who still want to watch linear content, particularly live sports. Rather than using prestige TV to lure audiences into a package that includes this content, Paramount and NBCU should therefore be looking to acquire sports fans and use a smaller slate of original scripted content to keep those users in between major sporting events.

Doing so should help reduce the massive expenses these companies have been sinking into streaming and thus reduce the levels of subscriber scale needed to justify their spending.

Indeed, direct-to-consumer losses at Paramount and NBCU are already narrowing, thanks to reduced content spending (due in large part to this year’s talent strikes) as well as the revenue-boosting strategies the companies have pursued. Paramount, for one, now expects its investment in streaming to peak ahead of schedule, which was music to Wall Street’s ears (at least temporarily).

In the current market, keeping expenses under control will be more significant to success in streaming than massive subscriber bases. If Paramount+ and Peacock can walk this fine line by playing to their strengths and recentering their content strategies, they may be able to stay in the game after all — or at least until their parents become M&A targets.

 

[Obi-J Kenobi]

I'm afraid that Wish will have to do better than current expectations to get anywhere near that total.

https://deadline.com/2023/11/box-office-wish-napoleon-projection-1235591106/#comments

Then I revise my comment to maybe Wish can break even for TWDC? That would be a start at least.

I think TWDC potentially has the three largest box office losses this year: HM (-$200M +/-), Indy 5 (-$200M +/-), and maybe the Marvels beats out The Flash (-$200M +/-).

It ought to be eye opening for the TWDC film studios how badly the films are performing.

 

[BrianL]

Then I revise my comment to maybe Wish can break even for TWDC? That would be a start at least.

I think TWDC potentially has the three largest box office losses this year: HM (-$200M +/-), Indy 5 (-$200M +/-), and maybe the Marvels beats out The Flash (-$200M +/-).

It ought to be eye opening for the TWDC film studios how badly the films are performing.

The film's budget is reported to be around $200M. It's hard to know if that includes P&A, but likely not, so let's call it $250M. The box-office take should be about 2x to break even, and I think it has a shot at that over the holidays. That said, there are intangibles too. If Disney can sell enough Valentino the talking goat plushies, they will be just fine with it.

 

[HokieRaven5]

Then I revise my comment to maybe Wish can break even for TWDC? That would be a start at least.

I think TWDC potentially has the three largest box office losses this year: HM (-$200M +/-), Indy 5 (-$200M +/-), and maybe the Marvels beats out The Flash (-$200M +/-).

It ought to be eye opening for the TWDC film studios how badly the films are performing.

That’s why they’re transitioning to less movies per year. Takes time as most of these movies were funded during Iger’s first run or during the Chapek years.

 

[Obi-J Kenobi]

The film's budget is reported to be around $200M. It's hard to know if that includes P&A, but likely not, so let's call it $250M. The box-office take shoudl be about 2x to break even, and I think it has a shot at that over the holidays. That said, there are intangibles too. If Disney can sell enough Valentino the talking goat plushies, they will be just fine with it.

I have a high school friend that lives and works in Hollywood. He was accountant for a studio, not TWDC, and now is an accountant for a non-studio business. He told me that the quick and short ballpark estimate for the public to use is to total the reported budget, advertising (which isn't often announced but he said for tentpoles is about $100M) and multiple by 1.5.

So, the Marvels reported budget is $220M (not including reshoots and taking into account a $50M tax credit from the UK) and assume a marketing budget of $75M (which I giving TWDC the benefit of the doubt that they saw advanced ticket sales and withdrew ad dollars) and multiple that figure by 1.5 and the Marvels would need to make $440M (+/-) to break even.

Again, this is how my friend explained how to calculate a decent ball park estimate.

 

[BrianL]

I have a high school friend that lives and works in Hollywood. He was accountant for a studio, not TWDC, and now is an accountant for a non-studio business. He told me that the quick and short ballpark estimate for the public to use is to total the reported budget, advertising (which isn't often announced but he said for tentpoles is about $100M) and multiple by 1.5.

So, the Marvels reported budget is $220M (not including reshoots and taking into account a $50M tax credit from the UK) and assume a marketing budget of $75M (which I giving TWDC the benefit of the doubt that they saw advanced ticket sales and withdrew ad dollars) and multiple that figure by 1.5 and the Marvels would need to make $440M (+/-) to break even.

Again, this is how my friend explained how to calculate a decent ball park estimate.

Yeah, it's not exactly the same for every movie, just a decent rule of thumb. P&A is alwyas the wildcard because it varies so much and is sometimes tied in with other projects too. The box-office take can vary a little too as the studio gets almost all of the ticket price at first, then it tapers down. Those contracts with exhibitors can vary a bit though. It is pretty well safe to say that if they hit the 2x multiplier then everyone is happy. After that, it's all gravy!

 

[Obi-J Kenobi]

That’s why they’re transitioning to less movies per year. Takes time as most of these movies were funded during Iger’s first run or during the Chapek years.

Agreed.

And next year may be a struggle too. TWDC has 3 tentpoles: Mufasa, Deadpool 3 and Inside Out 2. It has to hit them out of the ballpark. I'm sure all three will have large budgets too. Perhaps KOTPOTA or the Amateur will break through? TWDC's fingers are crossed obviously.

I'm not sure anyone is asking for a Mufasa movie, but it will probably do well with families. I'd be a little nervous if I was in charge at TWDC because Wicked releases Thanksgiving next year and I have a hunch that movie is going to do huge box office numbers, have great legs, and could negatively impact Mufasa box office over the Christmas holidays.

If TWDC was really interested in making Deadpool 3 as successful as possible and draw a larger audience, it should be renamed to Deadpool 3some. That's a serious idea and I'm not humoring the title. I just cannot fathom TWDC authorizing Marvel to do the right thing and take the correct approach with this franchise's coarse, irreverent focus. That is a massive weakness of Bob Iger, in my opinion. Deadpool 3 should be profitable regardless.

 

[firefly_ris]

The Lion King is my favorite Disney film of all time, and yet if I never see the live action version for the rest of my life it will be too soon. Underwhelmed and couldn't care less. So as 1 single person out of the entire world, the Mufasa movie does not interest me. I am curious how well it would do and how many other avid TLK fans were/are not interested in the live action version. I'm kind of thinking yet again the budget required to make it will not make it profitable.

 

[wabbott]

A harbinger of Freeform's future?

https://www.hollywoodreporter.com/t...y-canceled-freeform-animated-show-1235646857/

Freeform’s Animated Comedy ‘Praise Petey’ Canceled
The series was the cable network’s first attempt at animation.

November 14, 2023 9:39am PST
by Lesley Goldberg

Freeform has run out of praise for Praise Petey.

The Disney-owned cable network has canceled the adult-leaning animated comedy fronted by Schitt’s Creek alum Annie Murphy after a single season.

Series creator Anna Drezen (Saturday Night Live) broke the news with a heartfelt post on social media, writing: “I have heard that making a non-IP show during covid that premieres during a double strike in the dead of summer was not ideal for viewership.” She notes that the show is still available to stream on Hulu “as of right now,” indicating that there could be plans for the show to be removed from the platform as Disney looks to cut costs by another $2 billion.

Freeform ordered the series, which was exec produced by animation kings Mike Judge and Greg Daniels, in December 2021 as head of originals Jamila Hunter planned to push the younger-skewing cable network into animation with the show as well as two other projects that were being developed in the space as Freeform became the syndicated home for repeats of Family Guy.

Since then, Freeeform has changed its leadership with ABC’s Simran Sethi adding oversight of the cable network where she previously cut her teeth under Karey Burke. Freeform has since canceled Single Drunk Female and The Watchful Eye. Of Freeform’s scripted originals, only three shows remain: the final season of Grown-ish, Good Trouble and Cruel Summer, the latter of which remains on the bubble.

 

[wabbott]

https://finance.yahoo.com/quote/DIS?p=DIS

The Walt Disney Company (DIS)
NYSE - Nasdaq Real Time Price. Currency in USD

91.07+1.63 (+1.82%)
At close: 04:01PM EST

91.07 0.00 (0.00%)
After hours: 4:54PM EST

 

[Elijah Abrams]

https://finance.yahoo.com/quote/DIS?p=DIS

The Walt Disney Company (DIS)
NYSE - Nasdaq Real Time Price. Currency in USD

91.07+1.63 (+1.82%)
At close: 04:01PM EST

91.07 0.00 (0.00%)
After hours: 4:54PM EST

What's causing the rise in Disney's stock?!

...and I thought their stock would continue to fall.

A harbinger of Freeform's future?

https://www.hollywoodreporter.com/t...y-canceled-freeform-animated-show-1235646857/

Freeform’s Animated Comedy ‘Praise Petey’ Canceled
The series was the cable network’s first attempt at animation.

November 14, 2023 9:39am PST
by Lesley Goldberg

Freeform has run out of praise for Praise Petey.

The Disney-owned cable network has canceled the adult-leaning animated comedy fronted by Schitt’s Creek alum Annie Murphy after a single season.

Series creator Anna Drezen (Saturday Night Live) broke the news with a heartfelt post on social media, writing: “I have heard that making a non-IP show during covid that premieres during a double strike in the dead of summer was not ideal for viewership.” She notes that the show is still available to stream on Hulu “as of right now,” indicating that there could be plans for the show to be removed from the platform as Disney looks to cut costs by another $2 billion.

Freeform ordered the series, which was exec produced by animation kings Mike Judge and Greg Daniels, in December 2021 as head of originals Jamila Hunter planned to push the younger-skewing cable network into animation with the show as well as two other projects that were being developed in the space as Freeform became the syndicated home for repeats of Family Guy.

Since then, Freeeform has changed its leadership with ABC’s Simran Sethi adding oversight of the cable network where she previously cut her teeth under Karey Burke. Freeform has since canceled Single Drunk Female and The Watchful Eye. Of Freeform’s scripted originals, only three shows remain: the final season of Grown-ish, Good Trouble and Cruel Summer, the latter of which remains on the bubble.

At least Disney is looking to give Freeform to A+E Networks. Perhaps that would restore the channel to Spectrum subscribers.

And next year may be a struggle too. TWDC has 3 tentpoles: Mufasa, Deadpool 3 and Inside Out 2. It has to hit them out of the ballpark. I'm sure all three will have large budgets too. Perhaps KOTPOTA or the Amateur will break through? TWDC's fingers are crossed obviously.

Kingdom of the Planet of the Apes looks like it'll be successful like the previous entries in the rebooted POTA franchise, but The Amateur? I sincerely doubt that. In fact, the original 1981 film adaptation is rather obscure. There is also still no sign of a new date for The Bikeriders.

I also think that Disney should have another big studio (either Sony Pictures or Paramount Pictures) handle the distribution for one (or two) of the four Marvel Studios films coming in 2025 (or five if Armor Wars ends up getting a 2025 date).

 

[wabbott]

Trian Partners (Nelson Peltz) SEC filing. Now owns 32.8 million shares (about 1.8 % of total shares outstanding) of DIS

https://www.sec.gov/Archives/edgar/...lForm13F_X02/Q32023-tfmlp-info-table_2023.xml

 

[fatmanatee]

What's causing the rise in Disney's stock?!

...and I thought their stock would continue to fall.

Good news on inflation yesterday, everything was up. Prior to that, probably a sense that they’re getting things under control. Earnings report was decent enough. Good news on D+ subscribers.

 

[Jason_V]

I also think that Disney should have another big studio (either Sony Pictures or Paramount Pictures) handle the distribution for one (or two) of the four Marvel Studios films coming in 2025 (or five if Armor Wars ends up getting a 2025 date).

That was already tried at the beginning of the MCU with Iron Man, Iron Man 2, Thor and Captain America. All rights went back to Disney in 2010.

I was on the Paramount lot talking with home video folks in 2010/2011 and they couldn't stop talking about how good the deal was for Paramount, money-wise.

What positive do you see in Disney splitting up distribution rights? Seems like an unnecessary headache and money split to me.

 

[BrianL]

That was already tried at the beginning of the MCU with Iron Man, Iron Man 2, Thor and Captain America. All rights went back to Disney in 2010.

I was on the Paramount lot talking with home video folks in 2010/2011 and they couldn't stop talking about how good the deal was for Paramount, money-wise.

What positive do you see in Disney splitting up distribution rights? Seems like an unnecessary headache and money split to me.

That's not exactly what happened. Paramount was the distributor for Mervel Studios before Disney bought Marvel, a buy which was largely motivated by the success of Iron Man. Disney had to keep the Paramount logo on the pictures contractually for a time even after the buy though.

 

[Jason_V]

That's not exactly what happened. Paramount was the distributor for Mervel Studios before Disney bought Marvel, a buy which was largely motivated by the success of Iron Man. Disney had to keep the Paramount logo on the pictures contractually for a time even after the buy though.

Mmm...that's what I said. OG comment was that Paramount or Sony should distribute some Marvel movies for Disney.

I then commented that Paramount distributed early MCU. And rights went back to Disney in 2010 (I didn't mention Disney buying them, I guess that's what you're calling out...?)

 

[BrianL]

Mmm...that's what I said. OG comment was that Paramount or Sony should distribute some Marvel movies for Disney.

I then commented that Paramount distributed early MCU. And rights went back to Disney in 2010 (I didn't mention Disney buying them, I guess that's what you're calling out...?)

But the rights didn't "go back" to Disney nor did Disney try to use different distribtuors. Marvel did, but then Disney bought them and took all distribution rights in house, even for the already released movies, which is why they paid Paramount so much.

 

[Jason_V]

Got it. Semantics.

Point stands that Marvel was distributed by others in the past. I by go back to that now?

 

[BrianL]

Got it. Semantics.

Point stands that Marvel was distributed by others in the past. I by go back to that now?

I do agree that parting it out to multiple distributors would be a terrible move. The distributors get most of the money! That's why those deals are so important and why Sony won't just give up those Spider-Man rights. Disney had to buy Fox as a whole to get the the other Marvel and outstanding Star Wars rights.

 

[wabbott]

This is new information. ValueAct Capital is a different firm than Nelson Peltz' Trian Partners.

https://valueact.com/

https://www.cnbc.com/2023/11/15/activist-investor-valueact-has-been-building-a-stake-in-disney.html

Activist investor ValueAct has been building a stake in Disney

Published Wed, Nov 15 2023 - 9:00 AM EST
Kenneth Squire@13DMonitor

Key Points

• ValueAct Capital began buying Disney this summer during the Hollywood strikes and it is now one of the investor’s largest positions, the Activist Spotlight has learned.
• The activist has been in dialogue with Disney’s management and is still growing their position, according to the Activist Spotlight.
• ValueAct believes that Disney’s theme parks and consumer products businesses are alone worth low $80s per share.

In this article

• DIS+2.62 (+2.88%)

ValueAct Capital has taken a significant stake in Disney (DIS) and has been in dialogue with Disney’s management, the Activist Spotlight has learned. This is a new stake not previously disclosed in filings or media reports.
Here’s a breakdown of the situation:

Company: Walt Disney Co.​

Business: Disney
is one of the most iconic entertainment companies globally. It operates through two segments, Disney Media and Entertainment Distribution; and Disney Parks, Experiences and Products. Disney engages in film and TV content production and distribution activities, as well as operates television broadcast networks and studios.
Stock Market Value: $167 Billion ($91.07 a share)

Activist: ValueAct Capital​

Percentage Ownership: n/a
Average Cost: low $80s per share
Activist Commentary: ValueAct has been a premier corporate governance investor for over 20 years. ValueAct principals are generally on the boards of half of ValueAct’s core portfolio positions and have had 56 public company board seats over 23 years. ValueAct has filed 89 13D’s in their history and has had an average return of 57.57% versus 17.52% for the S&P 500 over the same period.

Behind the scenes:​

ValueAct knows technology very well as seen by their active investments at Salesforce, Microsoft, and Adobe where they had board seats. They also know media well as active investors at the New York Times, Spotify and 21st Century Fox.

ValueAct began buying Disney this summer during the WGA and SAG strikes and it is one of the firm’s largest positions. The activist investor has been in dialogue with Disney’s management and are still growing their position today.

ValueAct believes that Disney’s theme parks and consumer products businesses and their $10 billion in EBIT (earnings before interest and taxes) are alone worth low $80s per share, ValueAct’s approximate cost basis in the stock.

The theme parks unit has a high return on capital, allowing Disney to further monetize its intellectual property. Amongst its peers like Warner Bros, Paramount and Netflix, Disney is the only one who has this advantage. Moreover, this is a business that is not threatened by technology, but enhanced by it.

For example, Disney’s Genie app, which allows park visitors to be guided through the parks in a way that minimizes their wait time, greatly enhances the visitor experience. Moreover, Disney has recently announced that it will be investing $60 billion into theme parks, which will be money well spent.

This theme park valuation implies an almost zero valuation for the rest of Disney’s business that includes ESPN, theatrical movie releases, Disney+, Hulu and its television networks. Like digital news and music, video streaming was greatly disrupted by the internet and the low cost of capital from 2016 to 2021 afforded streaming companies, almost unlimited capital to acquire customers at any cost. Then with rising interest rates and inflation, that bubble burst in 2022 and there was a massive re-rating of assets globally.

Many of the high-growth companies that had easy access to capital now find themselves the most capital constrained they had been in a long time. This gives a huge advantage to companies like Disney, which has a market leading brand and an incumbent business model with strong customer relations.

Now, these streaming wars are in the process of resolving and companies are focused more on profitability than acquiring customers at any cost. This means cutting costs and creating growing and sustainable revenue.

ValueAct has experience in both of these areas. At Salesforce, where ValueAct CIO Mason Morfit is on the board, margins have gone from 18% to 32% while the stock has gone from $130 to $220 in 10 months. Disney has already announced an aggressive cost cutting plan, but it is the revenue opportunity that is more interesting here.

At portfolio companies like Adobe, Microsoft, Salesforce, Spotify and the New York Times, ValueAct has advocated for and assisted in creating bundles, pricing tiers and advertising stacks that have led to less churn, more pricing power, higher average revenue per user and even better advertising technology.

Both the New York Times and Spotify increased their bundles (NYT with Wordle, the Athletic, etc.; Spotify with podcasting and audiobooks) and both increased subscription pricing. The New York Times’ stock went from $30 per share to $45 per share and Spotify went from approximately $80 per share to $175 per share. Disney has numerous opportunities for bundling, price tiers, etc. and there are many ways this can work out through its present assets, M&A, alliances and licensing, but intelligently bundling its products will lead to more stable and valuable revenue. Based on similar situations that ValueAct has been involved in, this could lead to up to $15 billion of EBIT for the media assets and a Disney stock price as high as $190 per share.

ValueAct has a history of creating value through board seats, including at Salesforce and Microsoft, but has also added value as active shareholders in situations like Spotify and the New York Times.

I would expect that they would want a board seat here and as someone who has a reputation of working amicably and constructively with boards, the Disney board should welcome them with open arms. Aside from their extensive experience at technology companies and media companies and their innovative and relevant history of growing sustainable revenue at similar companies, there is one other reason shareholders should welcome them to the board.

Bob Iger returned to Disney in 2022 with an initial two-year contract with the explicit goal of righting the ship. The board formed a succession planning committee at that time. Iger subsequently extended his employment agreement through 2026 but longer-term succession remains one of the board’s most important priorities. Having a shareholder representative on the board is very helpful in that area particularly one like ValueAct, whose CIO participated in one of the most audacious and successful CEO successions ever when Satya Nadella replaced Steve Ballmer as CEO of Microsoft. Someone with that experience and perspective would be invaluable in navigating CEO succession at Disney.

Finally, we cannot ignore the fact that Disney is presently the target of a proxy fight by Nelson Peltz and Trian Partners that is turning somewhat confrontational. This certainly gives the Disney board an alternative they were not expecting.

Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.