DIS Shareholders and Stock Info ONLY

[irlandaise]

What does your green and red mean?

"Red ink" is the traditional color for financial losses.

 

[clarker99]

Actually it will take more than just that to get the stock moving significantly and permantly (as opposed to the sub blip that temporarely drove it to $200). Tom Rogers (former NBC exec) was on CNBC this week saying that there are too many open issues, that Disney does not have full control over, and that is why the stock is stuck:

Hulu - all is still up in the air - do they take full control it and for how much?
ABC and the networks - what does a deal or sale look like and what is included?
ESPN - what does a partnership look like?
Carriage Fees - what kind of hits will they take? WS still doesn't know how to value the recent Charter deal. And what networks will cease to exist?
The strikes - how much of a bottom line hit will an agreement cause?
Did I miss any? Oh, how about succession?

No one remotely knows what the answers are to any of these. How does any significant new money flow into the stock before some of these issues are more clear?

I agree that there are things but if DTC churns out $500m-$1B in Operating Income FY24 (and I think this is possible), that is a $5B turnaround from its largest losses.

Heck, a break-even year is a massive win vs. the $4b loss in FY22.

Carriage Fees are under much less pressure than Advertising (and advertising's issue is more international than domestic) at least up until the last reported quarter.

These are just my take aways from the data in the 10Q's... There will always be speed bumps.

 

[clarker99]

Newest info on the left.

For those interested, Linear Affiliate Fee and Ad revenue.

 

[wabbott]

View attachment 795595
Newest info on the left.

For those interested, Linear Affiliate Fee and Ad revenue.

Yes, impotant data. DTC most likely will increase advertising steadily as viewers get used to it. That was probably the plan all along, but they couldn't say it out loud at first.

 

[wabbott]

82.89 USD +0.95 (1.16%)today
Sep 20, 2:26 PM EDT

 

[HokieRaven5]

Yes, impotant data. DTC most likely will increase advertising steadily as viewers get used to it. That was probably the plan all along, but they couldn't say it out loud at first.

DTC has always had ads. ESPN+ launched with ads, Hulu has had ads since 2008. The only DTC service that recently added an ad service was Disney+.

 

[clarker99]

Newest data on the left.

DTC ad revenue has been in slight decline. They are reporting that 60% of new Dis+ signup are going ad tier. Canada and Europe getting the ad tier shortly. An upward trend cannot be far away.

Edit: Also, the $1.99/mo for 3months promo is for the ad tier. Same with the Charter deal.

 

[RivShore]

DTC has always had ads. ESPN+ launched with ads, Hulu has had ads since 2008. The only DTC service that recently added an ad service was Disney+.

I remember the good old days of Hulu with ads being free with a cable subscription...looks like what is old is new again.

 

[HokieRaven5]

I remember the good old days of Hulu with ads being free with a cable subscription...looks like what is old is new again.

Yep, that system was fine until cord cutting started happening.

Comcast included Peacock with some of their basic tiers of cable early on but has since begun to pull back on that.

 

[RivShore]

Yep, that system was fine until cord cutting started happening.

Comcast included Peacock with some of their basic tiers of cable early on but has since begun to pull back on that.

Is it now a way to slow cord cutting? All the legacy companies can offer their streamer to cable subs "free" with ads, all of a sudden that cable bill that now includes 4 or 5 streamers and 100 channels doesn't look so bad. The Charter deal will be the test case, I guess. From a consumer perspective you just need to add Netflix and your done. You probably already have Amazon with Prime so I think that would just leave Apple, which doesn't offer that much anyway.

 

[Elijah Abrams]

So you propose selling Fox Studios before even knowing what's happening with Hulu? It is way premature for that.

My bad. Jumped to conclusions there.

 

[irlandaise]

Adding to the discussion of how movie studios can turn out more successful movies:

"The handsome earnings from both Oppenheimer and Barbie also re-establish an eternal truism that executives are loath to concede: that art made with some personal authorial sensibility appeals to the average consumer in a way that focus-grouped content made by committee cannot. The Barbie made by someone without the personality of Greta Gerwig could have gone the way of so many forgotten IP excavations, just as an Oppenheimer lacking Nolan’s tendency toward obsessive self-scrutiny could have lost sight of its ethical purpose while marveling at the bomb’s destructive power. It would be easy – and not totally incorrect – to write Barbenheimer off as a fluke, but the staying power of its less overtly commercial half testifies to the system’s proper functioning. Give a dependable talent the budget and latitude to create something good, make sure people know about it, and the grosses will follow."

From:

How Oppenheimer became the unlikeliest blockbuster of the year
https://www.theguardian.com/film/2023/sep/19/oppenheimer-box-office-barbie

 

[HokieRaven5]

Is it now a way to slow cord cutting? All the legacy companies can offer their streamer to cable subs "free" with ads, all of a sudden that cable bill that now includes 4 or 5 streamers and 100 channels doesn't look so bad. The Charter deal will be the test case, I guess. From a consumer perspective you just need to add Netflix and your done. You probably already have Amazon with Prime so I think that would just leave Apple, which doesn't offer that much anyway.

It may be a way to stem the tide and find that balance point where both economic engines can exist and make $$ for the company going foward.

The theatrical business will probably be solved with less films annually, which in turn less actors and writers to negotiate with.

 

[wabbott]

It may be a way to stem the tide and find that balance point where both economic engines can exist and make $$ for the company going foward.

The theatrical business will probably be solved with less films annually, which in turn less actors and writers to negotiate with.

IIRC, Eisner had a knack (or habit) of hiring former A list actors who had fallen on hard times and would come cheap. Think Robin Williams and Richard Dreyfus.

 

[wabbott]

Since Iger's remarks were made at an investor presentation, I guess this item belongs here.

https://finance.yahoo.com/news/disney-ceo-says-company-quiet-164854149.html

Disney CEO says company will 'quiet the noise' in culture wars -analyst
Dawn Chmielewski
Wed, September 20, 2023 at 9:48 AM PDT

(Reuters) -Walt Disney CEO Bob Iger told investors the company will "quiet the noise" in a culture war that has pitted social conservatives against the global media and entertainment conglomerate, according to an analyst note on Wednesday.

Iger’s brief statement, included in an analyst report from Needham media analyst Laura Martin, was part of an investors’ presentation on Tuesday at Walt Disney World Resort in Orlando, Florida, in which the CEO also announced Disney will double its investment in theme parks and cruise ships over the next decade.

Disney is struggling to make its streaming business profitable, improve the quality of its films, position its flagship sports brand, ESPN, to stream directly to consumers, and potentially shed its television networks. In its most recent quarter, the company beat Wall Street's profit expectations but fell short on revenue.

Disney declined comment.

The entertainment company was thrust at the center of the nation’s culture wars in 2022, when it publicly criticized Florida legislation restricting classroom discussion of sexual orientation and gender identity. Governor Ron DeSantis responded by campaigning against “woke Disney,” and working with the state legislature to strip it of self-governing authority over the parks.

Florida and Disney are locked in a legal battle over the formation of the Central Florida Oversight District board, which assumed oversight of development in the nearly 25,000 acres (100 square kilometers) of property in and around Disney’s theme parks.

It is unclear how much of the $60 billion in new investment in parks will be spent in Florida, where Disney faces increased competition from rivals such as Universal Orlando Resort. Iger previously said the company planned to spend $17 billion in investment at Walt Disney World over the next 10 years.

Parks have become a reliable profit engine for Disney at a challenging time for the company.

Disney has also faced social media backlash from conservative commentators over the casting of Halle Bailey, a Black actress, in the lead role of Ariel in “The Little Mermaid," though the movie ended up making $570 million worldwide, making it the seventh-highest grossing film of 2023 so far, according to Boxofficemojo.

Several countries last year blocked the release of the Pixar Animation Studios film “Lightyear,” which depicts a same-sex couple sharing a brief kiss.

Iger’s remarks about its content appear to mirror those he made at the company’s annual shareholder meeting in April.

At the time, Iger was responding to an investor who said the company was becoming too concerned with social issues.

“Our primary mission needs to be to entertain ... and to have a positive impact on the world,” Iger said at the time. “I’m very serious about that. It should not be agenda-driven."

(Reporting by Dawn Chmielewski in Los AngelesEditing by Marguerita Choy)

 

[Elijah Abrams]

Adding to the discussion of how movie studios can turn out more successful movies:

"The handsome earnings from both Oppenheimer and Barbie also re-establish an eternal truism that executives are loath to concede: that art made with some personal authorial sensibility appeals to the average consumer in a way that focus-grouped content made by committee cannot. The Barbie made by someone without the personality of Greta Gerwig could have gone the way of so many forgotten IP excavations, just as an Oppenheimer lacking Nolan’s tendency toward obsessive self-scrutiny could have lost sight of its ethical purpose while marveling at the bomb’s destructive power. It would be easy – and not totally incorrect – to write Barbenheimer off as a fluke, but the staying power of its less overtly commercial half testifies to the system’s proper functioning. Give a dependable talent the budget and latitude to create something good, make sure people know about it, and the grosses will follow."

From:

How Oppenheimer became the unlikeliest blockbuster of the year
https://www.theguardian.com/film/2023/sep/19/oppenheimer-box-office-barbie

Take notes, Disney!

The theatrical business will probably be solved with less films annually, which in turn less actors and writers to negotiate with.

Ugh, no! That would cause more movie theaters around the world to close down.

Anyway, I’m still a bit concerned with what will happen to Hulu, @RivShore, especially in regards to the future of the Fox Studios library. Just feels like to me that said library would be stuck in Disney’s grip forever, refusing to let it go, if Hulu was fully acquired by Disney. I just want Fox to go back to what it was before and embrace a streaming and theatrical strategy of their own respectively. None of the other film studios will want films originally set up at *old* Fox (apart from Nimona) nor quality/innovative films, and Annapurna Pictures is forming their own animation unit with former Blue Sky Studios staff, including Chris Wedge. I’m worried that Annapurna Animation will be stuck supplying their films to Netflix.

 

[clarker99]

https://twitter.com/x/status/1704687739457745371

Writers on the cusp of going back to work.

 

[wabbott]

https://www.latimes.com/entertainment-arts/business/story/2023-09-21/why-would-disney-sell-abc

Why would Disney want to sell ABC? - Los Angeles Times
Stephen Battaglio, Meg James
9/21/2023 - 3 AM PDT

---

After Walt Disney Co. completed its landmark acquisition of ABC in 1996, the entertainment conglomerate did not waste any time integrating the TV network into its corporate culture.

Every top ABC executive was required to spend the day at a Disney theme park dressed as Goofy, Pluto and other characters in the company’s universe. It was a way to get them to march in formation, as promoting the Disney brand became part of their jobs.

Having a TV network that reached nearly every household in the country helped the company launch hit movies, park attractions and Broadway shows. An episode set in Disneyland or Disney World was a given for every family-centered ABC sitcom, from “Roseanne” to “black-ish.”

ABC has long been part of the entertainment behemoth’s DNA, which is why it came as a shock when Disney Chief Executive Bob Iger said earlier this summer that he is open to spinning off the network and its eight TV stations based in such major markets as Los Angeles, New York, San Francisco and Chicago.

Iger’s comments have already generated interest from potential suitors, including Nexstar Media Group, the largest TV station owner in the country. Byron Allen’s Allen Media Group said it would offer $10 billion for the network and stations along with several of Disney’s entertainment cable channels.

Disney tamped down expectations that any deal is imminent, saying it has not made any decision to part with the assets. But just raising the potential of a deal shows how media companies that are struggling to adapt to changes in technology and consumer behavior are forced to ponder moves once considered inconceivable.

A landmark deal

To be sure, the opportunity to acquire an asset such as a major broadcast network does not come around often. ABC has only changed hands three times since it was spun off from NBC as a radio network in 1943. It was merged in 1953 with United Paramount Theaters, a chain led by Leonard Goldenson, who guided the company into the television age.

In 1985, ABC was acquired by Capital Cities Communication, a low-key owner of TV and radio stations and print publications based in Albany, N.Y., hardly an entertainment industry hub, for $3.5 billion.

Capital Cities turned out to be a transitional owner. In the early 1990s, a change in FCC rules lifted a prohibition on networks owning their prime-time shows, which opened the doors to mergers with movie and TV studios.

Enticed by ABC’s 80% stake in sports media giant ESPN, Disney stepped up, paying $19 billion.

In the ensuing years, Disney grew and diversified, but the TV business matured.
Consumers under the age of 50 have largely abandoned traditional TV for streaming video platforms when they want to watch scripted shows and movies.

“This is a smart company that has unique and compelling assets that customers care about, but it is being buffeted by the same kind of disruptive trends that we’ve seen in a lot of industries now,” said David Rogers, author of “The Digital Transformation Roadmap” and an instructor at Columbia Business School. “How do you thread this needle and transition from one set of business models to another?”

In July, Nielsen data showed that the total share of viewers watching broadcast and cable networks dropped below 50% for the first time. Streaming accounted for nearly 39%, up from 28% in July 2021. Broadcast TV’s share fell from 24% to 20% over that time, while cable’s share was 29.6%, down from 38%.

“These are not distressed assets, these are distressed business models,” Rogers said. “The business is shrinking.”

The shift has accelerated at a time when the company’s balance sheet is stretched.
Disney piled on debt four years ago to buy much of Rupert Murdoch’s entertainment assets, including the Fox movie and television studios and cable channels FX and National Geographic.

In the early days of the pandemic in 2020, after theme parks and movie theaters closed, the company took on more debt. It also suspended its stock dividend to investors. (Iger has said that he wants to reinstate the dividend by year’s end.)

The company is facing a series of notes coming due, including $1.4 billion that is maturing this year, according to Moody’s Investors Service.

Disney’s debt, minus cash and cash equivalents, is $36.7 billion, according to regulatory filings.

Moody’s gave Disney a strong A2 credit rating. The company generated $1.5 billion in free cash flow during the last fiscal quarter, and the ratings agency noted Disney has made progress whittling down its debt.

The coming months could be crucial to the company’s financial picture. Four years ago,
Disney agreed to pay Comcast Corp. at least $9 billion for the Philadelphia cable company’s 33% stake in streaming service Hulu. (Disney owns 67% after the Fox purchase).

The two companies, at that time, established a floor for Hulu’s valuation at about $27.5 billion, but Comcast Chief Executive Brian Roberts insists the streaming service is worth considerably more. Analysts have speculated that appraisals could put the value at $40 billion or more.

This means that Disney might need to come up with more than $10 billion to pay Comcast to acquire 100% of Hulu.

Such demands are putting pressure on Iger, who on the surface seems like an unlikely agent for an ABC sale, which analysts say could fetch as much as $8 billion.

Iger started his career as a studio supervisor for the network in 1974, working his way up to chief executive of what was then Capital Cities/ABC in 1994.

After Disney took over, Iger’s leadership bridged the disparate cultures of the merged companies and he eventually succeeded the mercurial Michael Eisner as chief executive.
But in recent years, he has been a harsh realist about the future of the traditional TV as it struggles to survive as streaming thrives.

“Linear television — cable and satellite — is marching in a constant direction toward a great precipice and it is going to be pushed off,” Iger said a year ago at the Code industry conference in Beverly Hills — two months before his surprise return as Disney’s CEO.

The steady loss of pay TV customers cutting the cord — about 7% a year — also threatens the retransmission fees ABC receives from cable and satellite companies that carry its stations. The network has been relying on fee increases to keep the pay-TV revenue growing, but the decline in customers will eventually cut into that pie.

“He knows the legacy linear TV business is over,” said one former network executive familiar with Iger’s thinking regarding an ABC spinoff. “He wants to do it.”

The shift to streaming

It’s not just convenience that has drawn consumers to streaming.
Big money and creative freedom offered by streaming companies has lured away name brand producers away such as Shonda Rhimes. She tuned out such hits as “Grey’s Anatomy” and “Scandal” for ABC before leaving in 2017 for an exclusive deal with Netflix.

Disney has participated in the industry-wide shift of financial resources into streaming as well, as it tries to rapidly build up the programming offerings of its subscriber-based streaming service Disney+.

The company reportedly spent $15 million per episode to make the “Star Wars”-based series “The Mandalorian,” a budget that would be unheard of for an ABC show, even during the network’s glory days.

Disney executives have also said the future of ESPN is as a direct-to-consumer streaming channel once the universe of pay-TV subscribers falls below a certain point. The company has tapped former top executives Tom Staggs and Kevin Mayer as consultants to look into strategic partners that can help in the process.

So why would another company want ABC if the future is bleak?

Unlike Disney’s direct-to-consumer business — which posted a $500 million loss in the third quarter — the traditional TV business is still profitable.

Steven Cahall, an analyst Wells Fargo, projects the combination of ABC network and stations will take in $5 billion in advertising sales and revenues from pay TV carriage fees in the 2024-25 fiscal year. That’s down from $8.3 billion reported for 2018-19.
But TV stations have high profit margins — Cahall puts ABC’s at 30-35% — thanks to political ad spending in presidential and mid-term election years. The audience for traditional TV is older, but more likely to vote, and stations located in states with contested races are flooded with candidate spots.

In 2024, spending on political ads is expected to hit $10.2 billion, up from $9 billion in the 2020 presidential cycle, with about half going to local TV stations, according to AdImpact, a firm that tracks election spending data.

On the network side, ABC has the durable reality franchise “The Bachelor” Emmy-winning sitcom “Abbott Elementary” and the annual Oscar telecast through 2028. While it ranks fourth in overall viewers among the four major broadcast networks, it had the most-watched non-sports programs among 18- to 49-year-olds in the 2022-23 season.
But its strongest assets are major sporting events such as college football, the NBA Finals and the NFL, including two Super Bowls over the next 10 years.

Those rights deals are shared with ESPN, so any new ABC owner will have to negotiate to keep those high-rated events as part of a sale, analysts have noted.

An ABC sale would not immediately provide Disney with a financial windfall. Any deal
would have to be approved by the FCC and face other regulatory scrutiny.

The earliest that ABC might change hands would be late 2024 or 2025, according to one knowledgeable industry insider who was not authorized to speak publicly.

The company will likely face blowback from Washington lawmakers over what would happen to ABC News in the event of a sale. Politicians, who like to be seen on TV by constituents back home, are expected to express concern that the division remains viable.

The division is filled with high-paid stars such as “Good Morning America” co-hosts Robin Roberts and George Stephanopoulos. A new owner — especially if it were the highly cost-conscious Nexstar or a private equity group — will want to bring those salaries down.

ABC News employees are said to be in a panic over the prospects of a new budget-slashing owner, according to a former executive for the division, especially after seeing the cutbacks at CNN that occurred after Warner Bros. Discovery took over the channel.

 

[wabbott]

https://www.ft.com/content/f3c15d38-759a-4a74-9816-93c6c09d6624​

A dealmaking denouement is under way for the decline of TV​

Anna Nicolaou
9/21/2023

Way back in 2006 in his first stint as chief executive of Disney, Bob Iger made a big splash just four months into the job with the acquisition of Pixar. It was the first of several transformational deals that would define both Iger’s career and modern Hollywood at large over the ensuing decades.

Iger, now age 72, is leading the entertainment industry into a fresh wave of dealmaking, with negotiations around the perpetually in-flux US streaming service Hulu set to begin next month.

But instead of bold moonshots on the future, this era has more of a downbeat feel, with Iger and his peers facing the unglamorous task of managing decline.

Having spent the past several years investing in streaming — and in doing so, undermining the old business of television — big media groups are now dealing with the fallout. Their CEOs have to finish the task of ripping up the US pay-TV business, one that had made these companies and the executives themselves very rich, in the least painful way possible.

This is playing out across the industry, but most publicly at Disney, after Iger in effect put up a “for sale” sign in July on Disney’s TV channels, including ABC, where he started his career. These businesses, which brought Disney nearly $5bn in operating income in the first nine months of its fiscal year, “may not be core” to the company, Iger declared on CNBC. “The disruption of [traditional TV] has happened to a greater extent than even I was aware,” he said.

To cope with this disruption, US media groups are slimming down. Warner Bros Discovery, which has slashed costs over the past year, is in talks to sell a stake in its soundtrack catalogue to Sony Music, according to people familiar with the matter. Negotiations have dragged on for several months and it is unclear if a deal will materialise, these people said.

Warner also owns CNN, another TV channel that seems continually rumoured to be up for sale. The recent hiring of respected news veteran Mark Thompson to lead the network suggests that Warner chief David Zaslav is invested in keeping the network, at least for now.

Paramount, which is controlled by Shari Redstone, this year agreed to sell the Simon & Schuster book publisher to KKR. It also tried to sell BET, one of several cable TV networks that Paramount owns, but abandoned the effort.

Unsurprisingly, private equity companies, experts in wringing cash from companies in decline, are rumoured as potential buyers for these networks. “It’s tough to find anyone who will write a big cheque for linear TV today,” said the chief executive of a global media group. “[Private equity] firms could look at it as a tactical buy.”

Aside from the fact that the assets they are trying to offload are in decline, there are other factors that make this a bad time to sell a media company.

The US regulatory environment has shifted under the leadership of top antitrust enforcer Lina Khan. Media executives know that any proposed transaction could be subject to years of waiting for regulatory approvals if the Democrats win the next election. US interest rates are higher than they have been in two decades, raising the cost of borrowing at a time when Disney and Warner are already saddled with substantial debt. Then there is the historic labour strike in Hollywood, which will affect the income statements of these companies well into next year.

There appear to be few elegant solutions for Iger, who staged a high-profile return to Disney last year, pulling himself out of retirement to turn things around. Since he came back in November, Disney’s stock has fallen about 15 per cent, while the S&P 500 index has gained 12 per cent. The company’s shares hover around $80, the lowest point in about a decade.

Disney might have simply waited too long to sell the businesses. The group is already fielding calls from potential buyers of ABC, but these suitors say that Disney does not seem clear about the structure or details of a potential deal.

As ever, there is the pipe dream that Apple or Amazon could swoop in. Iger wrote in 2019 that if Steve Jobs were still alive, he believes Apple and Disney would have merged.

But Apple is not known for big acquisitions, and even if Iger is successful at shrinking Disney by selling off its declining TV networks, the idea still seems far-fetched. This week, Iger committed to doubling investment in an area that is still performing well: its theme parks. Does anyone believe Apple’s Tim Cook wants to run Disney World?

 

[clarker99]

(all number are in millions)

Ran some numbers for the individual streaming services to look at how well they perform vs their own costs.

DIS+ and Hulu both do very well. ESPN+ is now in the black. All 3 DTC streamers now make enough revenue to cover their own programming costs. That operating income just increased to an all time high.

As programming costs are reduced, prices increase and the ad tiers start to kick in, we should see better results each quarter throughout FY24.


Here are the approximate average quarterly paid users per service. Will be interesting to see how growth looks with the $1.99/mo for 3months promo and charter agreements. Will ESPN+ show gains? Maybe a push upward for the Hulu LiveTV+SVOD bundle?


EDIT: What do I mean by approximate? Disney's quarterly reports only tell us the subscriber count on the last day of each quarter. So, if we take the average of the current quarter and the last quarter we get a better idea of the average subs per quarter and you can make educated guesses on revenue per service ( which disney doesnt break out). It would be nice if they gave us the averages (netflix does) but alas we have to do a bit of math.