DIS Shareholders and Stock Info ONLY

[bryaalre]

Revenue and operating income tell 2 different stories since FY18 (The last FY before Disney+ launched).

Revenue growth has been driven by Entertainment and specifically streaming:
Ent revenue
FY18: $34.5B
FY25: $58.3B
+$23.8B

Exp Revenue
FY18 $24.7B
FY25 $36.2B
+$11.5B

Operating Income growth has been driven by Experiences (single/multi pass and new cruise ships).
Ent OI
FY18: $9.6B
FY25: $7.6B
-$2B (this is slowly trending toward positive each quarter)

Exp OI
FY18 $6.3B
FY25 $10B
+$3.7B

As much as Linear is declining (and it is) it does provide 30% margin. Under the radar, Disney breaking its contracts to license content along with a lack of pre-covid box office perfomance has been just as big of a negative factor in Entertainment. The costs to eliminate these licensing deals continues to add up. FY25 Disney reported $1.8B in eliminations and they take in half the licensing revenue of 2018.

The eliminations aren't them breaking contracts in order to license. It is intercompany transactions that need to be removed so they are not duplicating revenues for the company as a whole.

From their recent financials eliminations "Reflects fees paid by (a) Hulu to ESPN and the Entertainment linear networks business for the right to air their networks on Hulu Live TV and (b) ABC Network and Disney+ to ESPN to program certain sports content on ABC Network and Disney+."

Assuming Disney continues to be aggressive with its push to homogenize their services and allow more and more programming to be shown on ABC/ESPN/Hulu/Disney +, eliminations will continue to increase. However, this has no real impact on the company and is not something that is meaningful.

Also, as far as I am aware, there shouldn't be many licensing deals that Disney can break since most have run its course since Disney Plus has started and have naturally ended or Disney broke years ago in order to get the content to the service faster at the start. Licensing revenue as well is not a big deal since the decrease in that revenue is essentially just Disney paying themselves that licensing fee through Disney Plus.

 

[clarker99]

The eliminations aren't them breaking contracts in order to license. It is intercompany transactions that need to be removed so they are not duplicating revenues for the company as a whole.

From their recent financials eliminations "Reflects fees paid by (a) Hulu to ESPN and the Entertainment linear networks business for the right to air their networks on Hulu Live TV and (b) ABC Network and Disney+ to ESPN to program certain sports content on ABC Network and Disney+."

Assuming Disney continues to be aggressive with its push to homogenize their services and allow more and more programming to be shown on ABC/ESPN/Hulu/Disney +, eliminations will continue to increase. However, this has no real impact on the company and is not something that is meaningful.

Also, as far as I am aware, there shouldn't be many licensing deals that Disney can break since most have run its course since Disney Plus has started and have naturally ended or Disney broke years ago in order to get the content to the service faster at the start. Licensing revenue as well is not a big deal since the decrease in that revenue is essentially just Disney paying themselves that licensing fee through Disney Plus.

They take the $1.8B right off the balance sheet. It def affects the profitability of Entertainment. They reported $0 eliminations in 2018 and prior.

And yes licensing revenue declines affect the division. Not getting an extra $2-3B from others is kind of a big deal.

I am not sure I understand how wiping out $4-5B in revenue that use to count is not a big deal?

 

[OKW Lover]

They take the $1.8B right off the balance sheet. It def affects the profitability of Entertainment. They reported $0 eliminations in 2018 and prior.

And yes licensing revenue declines affect the division. Not getting an extra $2-3B from others is kind of a big deal.

I am not sure I understand how wiping out $4-5B in revenue that use to count is not a big deal?

You're looking at DIS as a consolidated entity when the report their results. When management looks at the individual segments they see the picture without the need of eliminations.