Verizon buying Disney

[Dottie74]

Thoughts on this rumor?

 

[OSUZorba]

Here are some links: http://www.investors.com/news/walt-disney-stock-is-rising-on-this-latest-takeover-rumor/ and http://www.barrons.com/articles/verizon-for-disney-due-your-own-diligence-says-rbc-1499091330

Considering the two companies have very similar market caps, I don't really see it happening. Especially not a real takeover, maybe a merger.

I could see a deal for some Disney assets, like ESPN, but I really don't see the whole company going.

 

[JaxDad]

New Disney slogan:

"Can you pay me now?"

 

[bladiator]

I could see a deal for some Disney assets, like ESPN, but I really don't see the whole company going.

There we go. Give ESPN to someone else that a) maybe can use it better and b) has the cash to buy that huge whale of a problem off your hands.
And then put the money into Epcot.

 

[disneyseniors]

There we go. Give ESPN to someone else that a) maybe can use it better and b) has the cash to buy that huge whale of a problem off your hands.
And then put the money into Epcot.

HA! I didn't know Iger changed his name to "Epcot"????

 

[OSUZorba]

There we go. Give ESPN to someone else that a) maybe can use it better and b) has the cash to buy that huge whale of a problem off your hands.
And then put the money into Epcot.

Actually I think Verizon purchasing ESPN could make a lot of sense for Verizon, and they could do somethings with it that Disney can't. Like offer free ESPN stream to their wireless customers, etc. I see that being much more likely than a wholesale sell of Disney to Verizon, but crazier things have happened.

 

[amberpi]

Market caps are really close, as a PP said, true buyout seems unlikely but MAN, it'd make for a giant company. From a regulatory POV I don't think they'd have issues. I can see that Verizon could do some interesting things with ESPN, not sure that there's a ton of reasoning for putting Disney and Verizon together strategically though. Always interesting to consider.

 

[tcufrog]

Other than ESPN it makes less sense than Whole Foods and Amazon.

 

[TiggerBouncy]

SERIOUSLY doubt they could. VZ has a market cap of 198B and about 4B in cash. DIS has a market cap of 150B. Almost as big as Verizon and Verizon still has too much outstanding debt. They could never leverage the capital they would need. I would put far more stock into Apple buying DIS. They at least have the majority of the cash outlay and would have less pushback from shareholders since everyone is antsy for them to make a move with that powerhouse of cash.

 

[Minniesgal]

Not possible market caps are way too close

 

[OSUZorba]

It would have to be an all stock deal, but then it is more of a merger and Verizon runs the risk of basically being bought with their own money. This happened to Boeing when they "bought" McDonnell Douglas, the largest shareholders were all McDonnell Douglas people and they replaced a lot of the Boeing guys with their guys.

 

[Lee Matthews]

Oh please Disney sell off ESPN to them. Makes total sense for both parties

 

[geppettoman]

What would happen to Disney and the parks if the Disney company was sold to Apple or the newly rumored Verizon? Would the parks be at risk of closing and what changes would be made? I'm just curious to what a disney buyout would mean for the parks and company. Thanks.

 

[CAS239]

Why in the world would a company buy out Disney parks and then close it? That would make zero sense

You'd probably only see more branding of whatever company bought it. "Illuminations brought to you by Verizon"

Or if Apple bought it you might see an apple store at Disney springs, which I would love to see

 

[geppettoman]

What would it mean for disney company? Would disney keep naming rights or would it be verizon world? And Verizon's Cinderella movie etc?

 

[OSUZorba]

What would it mean for disney company? Would disney keep naming rights or would it be verizon world? And Verizon's Cinderella movie etc?

The Disney name is worth FAR more than the Verizon name. Probably all you would see is a tag ling at the bottom of the traditional Disney logos that says "A Verizon Company"

There would be a few large risks with a buyout.

1) They could spin off the parks like In-Bev did with SeaWorld and Busch Gardens. I see about zero percent chance of this happening. The parks are a huge percentage of Disney's revenue and name recognition. The parks also drive sells at the theater and stores. The Busch parks were small potatoes for Anheuser Busch and even smaller for InBev. InBev also massively slashed Anheuser Busch's ad budget.

2) Large corporations expect each business unit to pay "dividends" to the corporation, this is money that is bleed out of the business unit to pay for the corporate overlords. With a larger corporation, you could expect those "dividend" expectations to increase, removing free cash for the parks. This is a coin toss, depending on if Verizon would want to milk what is there dry, or if they wanted to invest in the future.

3) More than likely the top management would turnover. This would impact the creative direction, and type of investments. It could be good or bad, just depends.

At the end of the day, I expected Comcast to take the bleed them dry approach with Universal theme parks, but it looks like they are very committed to the parks, much more so than GE ever was. In that case though, Universal went from a unimaginably massive corporation to just a normal massive corporation. This would be the opposite direction of massive to unbelievably massive.

There is absolutely no way the parks close, and no way their names are changed away from Disney.

 

[bladiator]

There is absolutely no way the parks close, and no way their names are changed away from Disney.

Fate loves it when people talk in absolutes.

 

[maltdizzy]

IIRC, it should be noted that the "source" for this latest rumor was the NY Post quoting one anonymous banker in a bar. Analysts have all laughed it off. It's amazing how fast rumors gain respectability these days.

At most, this is a case of Verizon floating a rumor to get some movement from any major media player than a serious offer. Verizon's CEO tried this just a couple of months ago saying he was open for calls from Disney, Comcast, CBS/Viacom or anyone toward a merger.

All the major ISPs/cablecos want to solidify a media pipeline as the under-20 crowd now watch more youtube than all other TV outlets combined. It's an emerging market, they all want the dominance that a network like ESPN used to have in the cable world. It's why Comcast bought Universal/NBC and why AT&T/Directv is merging with Warner Bros.; and Apple and Verizon want to make similar leaps (Google already has Youtube), if Steve Jobs was alive, I think you would see more certain action from Apple to acquire a company like Disney.

 

[OSUZorba]

Fate loves it when people talk in absolutes.

True, never underestimate the stupidity of executives.

In this case, though, there would be a complete revolt by shareholders if they just up and closed the parks. They could just strangle the parks slowly over time by not investing in them or implementing extreme cost cutting.

 

[creamcityleo79]

This would be DEVASTATING, IMO! I am so against this! Plus, don't the shareholders have agree to this? I highly doubt many shareholders would vote for this. Please, though, sell ESPN. Let Verizon have it! More $$$ for REAL Disney ventures!