Disney Stock Approaching 9 Year Low

[SuddenStorm]

One question I have... At one point does Disney exit the Direct to Consumer market? I mean, at a certain point you should cut your losses, right? Why don't they go to Amazon, Apple, Comcast, or Netflix and sign a multi-year deal for Disney content? Then Disney can return to focusing on what it's good at- storytelling.

The streaming field is brutal. Why fight the streamers when you can join them?

Streaming became a land rush for the studios. There's a reason we've seen almost every major studio launch their own service in the last five years.

I would bet good money that we will see Peacock, Paramount+, Hulu, Disney+, ESPN+ merge or shut down in the next few years.

 

[flynnibus]

What would Apple, Netflix, Amazon, or Comcast spend for the Disney catalogue? They would also be paying for the Disney+ subscriber pool. 5 billion a year? More? Imagine if instead of worrying about subscriber numbers, Disney could count on a reliable licensing fee. And like that Disney would be making money from streaming. And if for whatever reason Netflix isn't treating Disney well, they can always dump them and go to Amazon or Apple.

Why aren't you learning from when Disney used to do that - before starting their own DTC? And trying to grasp why knowing everything you just listed.. they still decided to start a DTC video platform.

 

[Disney Irish]

I don’t run on the inner circles of entertainment, finance and commodities…

So I’m not the ideal head hunter

But I can tell what failing management looks like from the cheap seats

Got it?

So the point is Bob bad, anyone else good don't matter who.... Do I have that right?

Except one flaw in that view from the cheap seats, and this has been brought up by other posters, you're not likely going to get someone any different than Bob is with this replacement. They will still be someone Wall Street focused, not some creative or studio focused entertainment CEO, ie cut from the same cloth as Iger and maybe even Chapek or worse.

So be careful what you wish for.....as you may end up just getting more of the same or worse.

 

[DisneyHead123]

So the point is Bob bad, anyone else good don't matter who.... Do I have that right?

Except one flaw in that view from the cheap seats, and this has been brought up by other posters, you're not likely going to get someone any different than Bob is with this replacement. They will still be someone Wall Street focused, not some creative or studio focused entertainment CEO, ie cut from the same cloth as Iger and maybe even Chapek or worse.

So be careful what you wish for.....as you may end up just getting more of the same or worse.

I’m not sure if I agree with your reasoning here or not.

Imagine an NFL quarterback who was really struggling and having a poor season. Calls for his replacement began.

If you’re saying that any other quarterback would have performed the way this one did, due to circumstances beyond said quarterback’s control - ok, that checks out. No other quarterback could reasonably have done a better job due to a bad coach, other team members, weather, whatever.

If you’re saying they shouldn’t replace a quarterback who can’t… I don’t know, do whatever quarterbacks do, I don’t watch The Sports - because they’ll probably just hire another equally bad quarterback, then that’s just silly. Drafting bad quarterbacks is a problem, sure. But the solution is not to throw up one’s hands and say “Oh well, next draft pick will probably suck too, nothing to be done!” It’s to say “There’s a better player out there, now how do we find them?”

I have no idea which category Iger is in. I’m inclined to be sympathetic to him because I think Covid and the notion that everyone has to make a rush for streaming (plus “factors I will not speak of on these boards because I am trying harder to be a rules-abiding member”) were a difficult hand to be dealt. I’m open to the idea that this is simply a natural period of cutbacks and pruning for Disney, that would be happening no matter who was in charge. But again, I think that’s the argument to be made here for your reasoning to work.

 

[Disney Irish]

I’m not sure if I agree with your reasoning here or not.

Imagine an NFL quarterback who was really struggling and having a poor season. Calls for his replacement began.

If you’re saying that any other quarterback would have performed the way this one did, due to circumstances beyond said quarterback’s control - ok, that checks out. No other quarterback could reasonably have done a better job due to a bad coach, other team members, weather, whatever.

If you’re saying they shouldn’t replace a quarterback who can’t… I don’t know, do whatever quarterbacks do, I don’t watch The Sports - because they’ll probably just hire another equally bad quarterback, then that’s just silly. Drafting bad quarterbacks is a problem, sure. But the solution is not to throw up one’s hands and say “Oh well, next draft pick will probably suck too, nothing to be done!” It’s to say “There’s a better player out there, now how do we find them?”

I have no idea which category Iger is in. I’m inclined to be sympathetic to him because I think Covid and the notion that everyone has to make a rush for streaming (plus “factors I will not speak of on these boards because I am trying harder to be a rules-abiding member”) were a difficult hand to be dealt. I’m open to the idea that this is simply a natural period of cutbacks and pruning for Disney, that would be happening no matter who was in charge. But again, I think that’s the argument to be made here for your reasoning to work.

Think of it this way, and using your quarterback analogy.

Imagine a quarterback class where all the quarterbacks are all coming from the same school where your current 5-12 quarterback came from. And so because they are all taught the same fundamentals, they pretty much all perform the same, you'll get pretty much the same results to varying degrees. That is not to say you don't replace your current quarterback, its to say that you shouldn't expect better results as you'll likely get the same or maybe even worse results.

The crop of executives that would be looked at to take up the top spot of a company like Disney are all pretty much taught the same business minded fundamentals, ie Wall Street focused fundamentals. So one cannot expect a creative or Parks focused CEO being in that same crop.

And I agree we should be more sympathetic to Iger during this current transition, but you have the Iger haters here that have been calling for his ouster for over a decade.

 

[BrianLo]

Bob does need to go, but on a logical planned timeline. The one outlaid is reasonable. Replacing him suddenly 9 months into his return tenure is highly destabilizing to the company and Wall Street.

The nice thing is Bob is old, he isn't here for another decade anymore.

 

[el_super]

The nice thing is Bob is old, he isn't here for another decade anymore.

If there is any reasonable argument to be made that Bob needs to be replaced, it would be that he is too old and past his prime.

If Disney can't turn around the valuation of their current media offerings, Disney's downfall will be that they didn't adopt more of a internet/youtube/tik tock strategy earlier on. The generation that grew up on Disney's traditional media is dying out, and Disney needs to pivot with some younger talent.

 

[BrianLo]

What this industry seems to need more than anything is consolidation. These companies are spending billions in marketing, web services maintenance, and content acquisition. They are bleeding each other dry. Apple, Amazon, and Comcast have a lot of leeway to keep on fighting. And Netflix is in an existential contest. Why not sign a deal with one of these firms for a licensing deal? Disney can dump the overhead they were spending onto other firms. Let tech companies do the tech stuff and Disney focus on storytelling. This would give one of the other streamers room to increase pricing with one less major competitor. It would also reduce the strain on creatives to produce ever more content.

What would Apple, Netflix, Amazon, or Comcast spend for the Disney catalogue? They would also be paying for the Disney+ subscriber pool. 5 billion a year? More? Imagine if instead of worrying about subscriber numbers, Disney could count on a reliable licensing fee. And like that Disney would be making money from streaming. And if for whatever reason Netflix isn't treating Disney well, they can always dump them and go to Amazon or Apple.

The streaming wars are like WW1 belligerents locked in endless trench warfare. Why be one of the belligerents when Disney can be the one selling the weapons to the highest bidder?

I don't fully disagree. Consolidation is inevitable and probably does need to occur. There can't be 8-10 catch all streamers. I just don't think Disney is that one though. It has a reasonable justification for its existence. Strong family content and when Hulu gets added in the US is really the next best consistent thing to Netflix.

I get Apple/Netflix/Amazon... but why Comcast? They are a small company by comparison with oodles of debt. Ironically Peacock is the one I don't think long for this world. Licensing out their NBC sitcoms and Animation films since Disney is off the board is probably more valuable than trying to maintain their own service.

Where the problem lies is if there is literally no money to be made in streaming then of course Disney shouldn't be in the service. But if Disney content is valuable enough to make money for a streamer, why shouldn't Disney be the one with the whole pot, rather than splitting the rewards with an external company? There isn't anything the externals offer, unlike say Disney partnering ESPN with the NFL, where there is more a shared vested interest.

There's also a lot of value having your own consumers directly then Apple being the home of Pixar movies.

The problem again is the transition was always going to be rough, the service was under-valued and people don't seem to be able to think more than a quarter ahead of them. Once the service starts generating profit, which it most certainly will, the yields and business case will keep accelerating.

The whole Disney shouldn't have gotten into the streaming game I'd buy if they weren't such an immediate, dominant force. What Chapek screwed up was going from a niche service to Netflix visions in his eyes, when the end point was actually more middle of the road.

 

[BrianLo]

It’s gonna cost them $20 bil a year in content to keep the subs up…

That’s the elephant in the room about DTC.

But, then you have 20 billion of paid off content that you own. It keeps the Studios in business and a lot of their arms length co-divisions are making money off it by D+ keeping them employed and working.

 

[DisneyHead123]

Think of it this way, and using your quarterback analogy.

Imagine a quarterback class where all the quarterbacks are all coming from the same school where your current 5-12 quarterback came from. And so because they are all taught the same fundamentals, they pretty much all perform the same, you'll get pretty much the same results to varying degrees. That is not to say you don't replace your current quarterback, its to say that you shouldn't expect better results as you'll likely get the same or maybe even worse results.

The crop of executives that would be looked at to take up the top spot of a company like Disney are all pretty much taught the same business minded fundamentals, ie Wall Street focused fundamentals. So one cannot expect a creative or Parks focused CEO being in that same crop.

And I agree we should be more sympathetic to Iger during this current transition, but you have the Iger haters here that have been calling for his ouster for over a decade.

But in football, talent and practice play a key part in performance. Humans aren't robots that can simply be programmed, after all. Train several hundred young guys in a sport in the same manner, and some will shine while some trip over their feet. Send a bunch of people to business school and some will be "by the book", some will roll their eyes at the professor and learn alternate methods, some will have a keen instinct that comes out of nowhere, all will have differing strengths and weaknesses and varying levels of natural talent, etc.

However, like I said, I can see the argument that too much focus is placed on an individual player when in reality larger surrounding circumstances were dictating the outcome in a scenario. I think that Streaming was such a seismic shift where 1. Participation in some way shape or form simply could not be avoided altogether but 2. Once there was a move to the streaming model, a drop - probably even a crash - in revenue was simply going to be the inevitable result, any way you slice it. Season that dynamic with Covid, politics, inflation and maybe a recession at some point, and I honestly think that simply keeping the company from falling apart in the short term, so that they can grow again at some point in the future, might be the best possible outcome.

 

[Sirwalterraleigh]

But, then you have 20 billion of paid off content that you own. It keeps the Studios in business and a lot of their arms length co-divisions are making money off it by D+ keeping them employed and working.

There are advantages to in-house DTC…but the longterm profitability is a “sketchy model”…at best

The whole “they’ll make money in 2024” is like a tired old cable excuse…fitting for Bob…like there were Lineman running cable on backroads in Indiana…
we should watch the numbers closely for the path to “profits”…they are not gonna be at levels cable ever was. It also eats into the box office now

 

[Sirwalterraleigh]

Streaming became a land rush for the studios. There's a reason we've seen almost every major studio launch their own service in the last five years.

I would bet good money that we will see Peacock, Paramount+, Hulu, Disney+, ESPN+ merge or shut down in the next few years.

They all obviously didn’t want to not be on that boat…to guard against a tech shift that could be catastrophic…

But other than Netflix they’ve all taken kinda a cautious “loss leader” approach to it.

I’d say Disney has been kinda at the top as “bold”…but it still looks like a hedge

If they really thought it was a gold rush…I think they wouldn’t still be tiptoeing around 3 different services

It looks indecisive

 

[Sirwalterraleigh]

So the point is Bob bad, anyone else good don't matter who.... Do I have that right?

Except one flaw in that view from the cheap seats, and this has been brought up by other posters, you're not likely going to get someone any different than Bob is with this replacement. They will still be someone Wall Street focused, not some creative or studio focused entertainment CEO, ie cut from the same cloth as Iger and maybe even Chapek or worse.

So be careful what you wish for.....as you may end up just getting more of the same or worse.

The point is anyone is obsolete in 20 years and should never control the board he reports to…

If you think that’s a “path to success”…then we can watch it play at see where it goes?

 

[Sirwalterraleigh]

Bob does need to go, but on a logical planned timeline. The one outlaid is reasonable. Replacing him suddenly 9 months into his return tenure is highly destabilizing to the company and Wall Street.

The nice thing is Bob is old, he isn't here for another decade anymore.

You can’t trust the guy…10+ of tired shenanigans and misdirection about succession from him.

I would agree it’s reasonable…if not for him.

1. Did the whole “my contract is up” 3 times attention grabbing…before “begged” to stay

2. Quit like a coward when the respectable would stay (that is indisputable)

3. Rigged a rather obvious “coup” with his board appointees and execs…then half of them “retired”

4. Came back “temporary” and already had himself extended…as the business has gone DOWN.



Sometimes I think everyone needs to get a drone and watch some Birds Eye view of the actual events.
We can follow this.

 

[Sirwalterraleigh]

Charter sticks dagger into Bob Iger with Disney and ESPN on the ropes | Fortune

 

[Disney Irish]

The point is anyone is obsolete in 20 years and should never control the board he reports to…

If you think that’s a “path to success”…then we can watch it play at see where it goes?

Hmm, I know a few long tenured CEOs that would disagree with you and are quite successful.

Anyways I think Bob will go, but not before 2026....

 

[Sirwalterraleigh]

Hmm, I know a few long tenured CEOs that would disagree with you and are quite successful.

Of international public held conglomerates? Or of business they started with family controlled or influenced boards?

Cause guess what Disneys history has tales of?

Anyways I think Bob will go, but not before 2026....

That appears to be the fools stance…but hey…at this rate he’ll be removed earlier so maybe you’re playing the “middle” of the prognosis?

 

[Disney Irish]

Of international public held conglomerates? Or of business they started with family controlled or influenced boards?

I'm sure you can figure that out for yourself, just Google longest tenure CEOs and you'll get the answer.

That appears to be the fools stance…but hey…at this rate he’ll be removed earlier so maybe you’re playing the “middle” of the prognosis?

My prediction, and call it what you want, but he'll last the rest of the current term. In early/mid 2025 they'll name a new CEO (maybe someone just recently brought back...) who will start to take over day-to-day operations before fully taking over in 2026.

 

[Sirwalterraleigh]

I'm sure you can figure that out for yourself, just Google longest tenure CEOs and you'll get the answer.

You can as well…which is why I asked you?

My prediction, and call it what you want, but he'll last the rest of the current term. In early/mid 2025 they'll name a new CEO (maybe someone just recently brought back...) who will start to take over day-to-day operations before fully taking over in 2026.

So exactly what Bob has currently laid out?

I’m shocked your “bold prediction” lines up

 

[Disney Irish]

You can as well…which is why I asked you?

International conglomerate Berkshire CEO Warren Buffet for one, who took over as CEO and had a board he controlled for many years, serving as CEO for 52 years now and very successful.

You can find the rest yourself, but there are more than you realize.

So exactly what Bob has currently laid out?

This has been discussed many times in other threads, I'm not going to restate it here.

You can agree or disagree with his plans, but he laid them out.

I’m shocked your “bold prediction” lines up

Not sure why you'd be shocked, its been pretty much written that way since his extension was announced.