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Bob Iger's contract is extended
- Thread starter Rteetz
- Start date
ford91exploder
Resident Curmudgeon
Unless Disney can unload ESPN on Amazon/Google who can USE the losses to offset profits from other units no one's buying a business with rapidly deteriorating fundamentals and high fixed costs which cannot be shed.
IPO is not going to work as it will be seen rightly as an attempt to wiggle free from rights payments.
If Disney had IPO'ed ESPN 2 years ago it probably would have worked.
A Transformational CEO can't help Disney because by 2020 or so ESPN fixed costs will consume all the profit from all other divisions.
ESPN's cost model made sense when ESPN had 112 Million Subscribers, It's a anchor made of neutronium at 30 million subscribers which is where industry experts expect ESPN to bottom out at.
No ESPN is not going to ZERO subscribers but at 30 million subs its going to take billions more to operate than it generates in revenue.
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Tom P.
Well-Known Member
The basic premise of your argument seems to be that no matter what Disney does or who the leadership is, it is doomed to bankruptcy and total failure and that nothing and no one can prevent that. Pardon me if I just don't buy that.
From the optimistic viewpoint, it's possible that ABC/Disney could find someone who started in P&R and who's comfortable with the media/sports/TV/publishing sides and could step in at the CEO level to maximize synergy among the divisions...
It's possible...
There is a nugget of truth in what Ford is saying. ESPN is on the hook for a ton of money for various broadcast rights in the coming years. Don't quote me on this (I saw the breakdown somewhere but cannot recall where I saw it) but I believe the number is north of $2 billion per year between the various broadcast contracts they have, with the NBA being the biggest chunk of that. ESPN is simply not the 800-lb gorilla it once was, and with a shrinking subscriber base it's going to be much harder, if not impossible, to command continued higher subscriber fees and commercial rates.
Personally, I think the best suitor for ESPN, *if* Disney was looking to unload it, would be a company that has deep pockets and already has an established streaming platform. We shouldn't be in de-nile about it, it could be Amaz-ing...
Personally, I think the best suitor for ESPN, *if* Disney was looking to unload it, would be a company that has deep pockets and already has an established streaming platform. We shouldn't be in de-nile about it, it could be Amaz-ing...
ford91exploder
Resident Curmudgeon
Disney is a highly successful business outside of the ESPN unit,
Yes ESPN still makes money but in less than 5 years it will cost Disney more to operate ESPN than ESPN generates in revenue and worse its all FIXED COST.
Disney needs to jettison the ESPN business, or make it a wholly owned subsidiary.
Its absolutely no accident after the failure of the Altice Cable deal that Iger bailed, Yes Disney got a little more money, But what Disney wanted was a minimum of a 50% increase in per subscriber rates. But Altice can't do that unless they want to accelerate cable cutting its not in Altice's interest to need to boost cable rates by 10-15 bucks to accommodate Disney's needs.
Disney's other choice is a strategic bankruptcy to bring everyone to the table and re-negotiate the rights deals in a way that fits modern viewing pattens.
A more realistic rights deal would allocate revenue on a per-subscriber basis which would for the first time have the leagues have some skin in the game.
If people dont like what they see on the field well that leagues's revenue goes down too. The converse is also true if people like what they see revenue goes up.
The problem with the current model is all the risk is on Disney's plate and the leagues get 'free money'
ford91exploder
Resident Curmudgeon
There is a nugget of truth in what Ford is saying. ESPN is on the hook for a ton of money for various broadcast rights in the coming years. Don't quote me on this (I saw the breakdown somewhere but cannot recall where I saw it) but I believe the number is north of $2 billion per year between the various broadcast contracts they have, with the NBA being the biggest chunk of that. ESPN is simply not the 800-lb gorilla it once was, and with a shrinking subscriber base it's going to be much harder, if not impossible, to command continued higher subscriber fees and commercial rates.
Personally, I think the best suitor for ESPN, *if* Disney was looking to unload it, would be a company that has deep pockets and already has an established streaming platform. We shouldn't be in de-nile about it, it could be Amaz-ing...
Disney is on the hook for a lot more than 2 billion per year for broadcast rights.
Verizon or Google are another set of companies which could use ESPN and paradoxically ESPN could be more valuable to them when revenue goes negative as losses there would offset gains in other businesses. Plus they have the necessary skillset to move ESPN to an online platform while retaining the legacy cable business.
peter11435
Well-Known Member
Doubtful
rael ramone
Well-Known Member
I'm thinking that they may have a more pressing concern coming up..... like, say..... next earnings.... (or a future earnings)
One of the defenses people have about $DIS is that it's P/E is at a discount to the S&P 500. When I looked that up, what jumped out to me is it's Forward P/E. It was about 10% lower then the current one. Which suggests that the analyst community expects 10% growth.
Where does this growth come from with ESPN/Media shrinkage, the costs necessary to get the streaming channels ramped up, and possibly domestic parks not delivering the growth they think all the price increases & upcharges were going to deliver?
I think the analyst community may still have too much pixie dust in their projections. And it's analyst projections that dictate whether you hit or miss when it comes to earnings, regardless of what the company gave out as guidance.
So, at some point there could be a BIG miss coming up. One that causes a SIGNIFICANT dip.
The fact that the dip will be bought won't make them happy if the ones doing the buying are named Icahn, Ackman, or Loeb.
Then you've got someone pushing for multiple seats on the board, and demanding short term changes to 'enhance shareholder value'. And the question is if Old Man Ike and his shares would side with the activist investor when there's a proxy fight...
It's not just about $$$ with executives. It's about power as well. If these guys load up on your shares, you lose some of your power...
ParentsOf4
Well-Known Member
Even a broken clock is right twice a day...
The problem is it's easy to miss the 2 minutes that are right when the other 23 hours and 58 minutes are wrong.
Unfortunately, I've seen too many instances of @ford91exploder twisting data I provided into something that's unrecognizable.
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the.dreamfinder
Well-Known Member
Funny how folks forget that Disney doesn’t own all of ESPN, only 80%.
ford91exploder
Resident Curmudgeon
Unfortunately, I've seen too many instances of @ford91exploder twisting data I that provided into something that's unrecognizable. [/QUOTE]
One difference is I have ZERO pixie dust left with respect to Disney and I cut them zero slack, So I look at Disney like an industrial concern. My DVC is up for sale soon after my last point renter's stay is complete. So I'm putting my money where my mouth is.
No I'm not a financial professional,
Just someone in the tech industry who's watched multiple companies crash and burn because they were unable to adapt to the changing environment and/or decided that Wall St was more important than the people who bought their products and services.
[/QUOTE]One difference is I have ZERO pixie dust left with respect to Disney and I cut them zero slack, So I look at Disney like an industrial concern. My DVC is up for sale soon after my last point renter's stay is complete. So I'm putting my money where my mouth is.
No I'm not a financial professional,
Just someone in the tech industry who's watched multiple companies crash and burn because they were unable to adapt to the changing environment and/or decided that Wall St was more important than the people who bought their products and services.
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ford91exploder
Resident Curmudgeon
Considering that it's widely reported that Ike and Bob do not get along at all, I imagine that Ike would happily jump on board with activist investors.
Tom P.
Well-Known Member
Then why are you here? I am not trying to be snarky or argumentative. I am genuinely curious. It seems odd that someone who is so soured on Disney, and does not enjoy their product at all any longer, would want to spend their leisure time on a message board for Disney fans.
ford91exploder
Resident Curmudgeon
Because it's possible to love Disney and absolutely despise the way it's run now. Many happy memories were created there. And more happy memories could made again under a new management team, This one will run TWDC into the ground and float off on their golden parachutes.