News The Walt Disney Company Board of Directors Extends Robert A. Iger’s Contract as CEO Through 2026

[BrianLo]

This dates back to before the Hulu buyout. This was during the bidding war for 21CF where Disney overpaid by close to $20+B.

That’s what I’m referring to. Comcast bid Disney up 18B and then subsequently bought out Sky from them and paid at least 8.5B too much for it in the process. It’s kind of a wash for who overpaid more when they split the difference, but Roberts certainly doesn’t come off smart, with the better asset, nor laughing.

 

[coffeefan]

Since we're about to enter a new era of M&A Disney should consider buying SquareEnix. It would be such a great fit.

 

[BrianLo]

Other than the 1/3 of Hulu from Fox can you let me know what they got that is currently profitable for them and justified the $71B spent?

There was immediate divestments of 30.5 billion dollars for the bigger ticket items. Many of them contingent and occurred with the purchase. Sky before. Hotstar most recently.

I cannot find accessible numbers for True(X), Fox Next, TeleColombia, FoxSports Mexico, A&E Europe, Argentinian FoxSports.

So in essence Disney is saddled with a 30-35B end price. Not 71. Hulu is worth 8.9 (at least). As for the other 20-25B, that’s the rub.

FX, Searchlight, 20th century are the main keynotes. Along with their back catalogues and IP. They basically bought a general entertainment catalogue and production arm; which is not nothing. It’s actually a fairly strong general entertainment based arm.

I’m not disagreeing that Bob was about to get an actual good deal and Roberts drove it up.

 

[Brian]

Two years ago tonight, Iger was abruptly reinstated as CEO and Chapek was relegated to the Disney archives.

 

[MisterPenguin]

So that Bob could overpay by $20B. This was personal for Bob and he was not going to let Brian steal the largest deal of his career. Brian knew that and played Bob to over pay.

Comcast did drive up the cost of Fox.

But Disney returned the favor and bid up the cost of Sky, which Comcast bought.

And now that Sky was overpriced, Disney sold their share of the overpriced Sky to Comcast.

In the end, after buying Fox, Disney got $40M out of divestitures, drastically reducing the cost of Fox.

Disney kept Fox out of competitors' hands. And transformed D+ content from "family" to "general audience" allowing them to set a new sub target after blowing through the first target in a manner of months. And Disney met their goal of when D+ would be profitable.

In a competitive market, you're not going to have fantastical win after win. Even Netflix, the front runner, had a live-action streaming debacle. But that's not going to sink Netflix. And Disney isn't going to sink with several minor setbacks.

 

[monothingie]

Comcast did drive up the cost of Fox.

But Disney returned the favor and bid up the cost of Sky, which Comcast bought.

They raised the bid by $3.2B. That's a big difference from the $20B that Comcast drove up the price for Disney to purchase 21CF.

And now that Sky was overpriced, Disney sold their share of the overpriced Sky to Comcast.

In the end, after buying Fox, Disney got $40M out of divestitures, drastically reducing the cost of Fox.

You seem to gloss over the $20B premium paid on top of the original deal as it was insignificant. I'm not sure how you get $40B from divestitures when it seemed to only total $15B with the majority of that coming from the sale of the Fox RSNs.

Disney kept Fox out of competitors' hands. And transformed D+ content from "family" to "general audience" allowing them to set a new sub target after blowing through the first target in a manner of months. And Disney met their goal of when D+ would be profitable.

This is misleading. The "General Audience" (Adult) programing is what Hulu brought to table and D+ was never intended to go down that route.

You keep going back to the timeline developed at launch that D+ would be profitable by 2024 but there is so much context missing from that assessment.
1. There was never consideration of relying on an ad supported model.
2. There was never consideration of complete HULU integration.
3. The expected profits were going to be many times what is being realized now or even being forecast.
4. There was no expectation that the losses would have been so large. (They were basically blowing up a fleet of DCL cruise ships a year at the height of their losses.)

In a competitive market, you're not going to have fantastical win after win. Even Netflix, the front runner, had a live-action streaming debacle. But that's not going to sink Netflix. And Disney isn't going to sink with several minor setbacks.

D+ main challenge is going to be user churn and loss of retail subscribers via the constant price increases. If Bob's hot mic comment about ad-tier subscribers is accurate, then they are apparently underperforming in this subscriber segment.

The "success" of DTC for Disney has not come from putting out a good product with good content, but rather through acquisitions, price increases, password crackdowns, and introducing an ad-supported tier. Like the experiences segment which showed growth mostly through price increases, is that truly a sustainable path?

 

[HauntedPirate]

The "success" of DTC for Disney has not come from putting out a good product with good content, but rather through acquisitions, price increases, password crackdowns, and introducing an ad-supported tier. Like the experiences segment which showed growth mostly through price increases, is that truly a sustainable path?

Of course it is! Just ask Bob, he'll tell you so.

 

[Comped]

Most divestures from the Fox purchase were forced by the EU or other governments to allow the deal to go through in the first place (except for A&E Europe which was a bad move on the EU's part IMO, as it was a rather useless divestiture). I'm sure Disney would have rather kept the lot (at least for a while). Disney owning Sky likely would have had very interesting ramifications for ESPN stateside (PL rights would have been nearly certain), but would have put a good amount of strain on Disney's profit margin.