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Disney's Next Acquisition Speculation / Discussion
- Thread starter Darkprime
- Start date
Same. Spider-Man is obviously the crown juel. Especially after NWH making over a billion dollars in the middle of a pandemic. I would not be surprised if behind closed doors Disney is discussing how to get the franchise back and coming up with other ways to compete with it like speeding up development of a Wolverine or X-Men movie to have their own billion dollar pandemic grosser assuming Avatar 2 doesn't do it this December.
Disney Irish
Premium Member
In reality Disney doesn't "need" the Spider-Man film rights. They have all the merchandising rights, so get 100% of that revenue, and get a 25% cut of the money made from the films. Plus they get the films on D+ after a period of time. So Disney is actually sitting pretty in terms of what they get from Spidey without having the film rights.
In addition they have many other characters they can use that could and should made just as much if not more than NWH, like you mentioned X-Men being one.
Disney Irish
Premium Member
Disney can already use all Marvel characters in their parks, minus the ones held up by the Universal/Marvel contract that limits what can be used in WDW.
I mean just look at the Spider-Man attraction that just opened in DCA, that uses the Tom Holland version of Spider-Man with his voice and likeness in the attraction.
Xmen will be an easy 20 year cash cow MCU reboot.
Disney Irish
Premium Member
Well we'll see what Feige does will them. But my guess if the current MCU is any indication, there wouldn't be more than 3-4 X-Men team up movies with a few individual character movies sprinkled in for good measure.
Remember there is a WHOLE lot of Marvel characters they have access to. While X-Men is one of the more popular set of characters they aren't the only ones they can use. Plus I doubt that Feige wants to turn the MCU into the XCU.
I actually think its a bad idea strategically for Disney to do the animated 97 Xmen in Disney+. When Disney teboots the Xmen I think Uni is going to struggle from a customer expectation from seeing new Xmen and Marvel characters whe they show up at Islands of Adventure. I could be wrong but frankly Now I could care less about that entire land. I could be the only one though.
Disney Irish
Premium Member
IoA has always been the comic book versions of the characters, not the movie versions. So I don't know why it would be an issue now when it wasn't an issue for the last 21 years. Its not like anyone has really been expecting a Hugh Jackman look alike walking around during that time.
So again I don't know why it would be an issue now even when the X-Men gets rebooted into the MCU.
Does the younger generation still read comics? Or do they telate to their super heroes via the MCU. Would be interesting to know.
Disney Irish
Premium Member
Does the younger generation question who Superman is on the Six Flags ride just because he doesn't look like any version from the movies or TV shows? No, they just understand that its Superman and the ride is themed to him. Same with anything in IoA.
IoA will always be the comic book versions of the characters, not the movie versions. So I don't see it as a problem, like I said it hasn't been for 21 years not sure why it would be now.
Honestly if it ever became a problem, such that they are losing money, Uni would just retheme the land to something else.
True but the current Sony Disney deal still has limitations on where and how much they can use use Spider-Man. For instance they can't do live action shows on Disney+ based on Spider-Man characters. He couldn't show up in Hawkeye because of it. It's a great deal for both parties but there's still a lot Disney can't do with the character that I'm sure they would like to. If Disney fully owned him you can bet there would be more synergy and crossover with the MCU especially on the Disney+ side. Plus giving up 75% of profits to Sony. Is not an easy pill to swallow. I'd be very worried about Disney screwing things up again in the next round of negotiations getting too greedy.
Disney Irish
Premium Member
From what I understand the Tom Holland version of Spider-Man is effectively "co-owned" by Sony and Disney for use in the MCU. Disney gets a 25% cut of the films because they have to put up 25% of the cost of making the films. So in reality if Feige wanted to put Tom Holland into a D+ show as Spider-Man it could probably happen, provided Sony and Holland also agrees to it.
Sure it would be easier if they owned him (and the family of characters) outright. But I think they are happy with what they have right now. Also based on the latest reports Sony and Disney has already agreed to do another trilogy of Spidey films with Tom Holland. So whatever negotiations were needed have already been done.
Weather Watcher
New Member
I think it would be interesting if Disney got into other entertainment industries, for an example purchasing Vail Resorts
brodie999
Active Member
‘Goosebumps’: New Live-Action TV Series Lands at Disney Plus (EXCLUSIVE)
The new "Goosebumps" TV series has been picked up by Disney Plus, Variety has learned exclusively.
variety.com
AnotherDayAnotherDollar
Well-Known Member
TLDR; I think Chapek and the Disney board should be targeting game publishers and developers.
First post in probably well over a year in this forum. Just posting to give my opinion on this as recent M&A movements have made me think of this.
First of all we have to consider that Disney has certain fiduciary responsibilities to stakeholders and other payments that are or will be coming due. They should not consider any large M&A until DSS is profitable OR they are well on target for their guidance of profitability on Hulu and ESPN+ by FY2023 and Disney+ by FY2024 AND they have at least 1 and 2 on this list back, or on a timeline to have it back, with a good handle and financials already planned for the other 3, at least.
IMO I'll agree with this article from the Hollywood reporter
www.hollywoodreporter.com
Or this article from variety:
variety.com
It seems Chapek also agrees
seekingalpha.com
Disney undoubtedly would have to go to inorganic growth and M&A for Software Development (games, metawhatever, and so on). That is not something they have any sort of expertise in and DSS is an example of that. That was only possible for Disney because of M&A. So to become a bigger player in a hugely growing industry that even Netflix is prioritizing Disney would need to acquire a couple of big players.
The Activision + Bethesda acquisition, Sony buying Bungie, Tencent and others making big acquisitions in the market indicates consolidation is happening. Disney should not want to be dependent only on licensing in this huge and growing market. They can - and should - still do licensing, but they need to prepare enough to be able to feed the market with their own internal developers. Plus with Chapek, Disney and the industry constantly talking about metaverse this would be a big way to help with that as well.
Iger did mention before that Disney was not good at gaming publishing and would revert to licensing. They sold FoxNext and got out of publishing altogether. That's not to say they haven't done that in other areas (i.e. divest only to get back on it in a big way). They sold Power Rangers only to make a bigger play in the boys market with Marvel. They sold Miramax only to make a bigger play in the general entertainment market with Fox. I don't necessarily agree with buying EA though I see the appeal for an ESPN - EA Sports synergy, though they already do have some of that now and could continue with a partnership similar to the partnership with betting companies in sports. They also have some IPs that could be mined in other parts of the business (i.e. Dragon's Age, Dead Space, Battlefield, Mass Effect, Plants v Zombies, Mirror's Edge, etc). When taking a closer look I would think some of those franchises would be tough though (i.e. Mass Effect to compete with Star Wars + all other out of Earth franchises Disney has, Dragon's Age is niche and hard to get a big budget to compete with LOTR and The Witcher, and so on). EA would not be a cheap acquisition. Current market cap and EV around the same, ~40B. With a 30-40% premium on the EV would bring the total to ~55B + assumption of debt (currently ~2B Long Term Debt).
Any Game publisher/dev acquisition should, IMO, include IPs that can be mined in other parts of the business. I'll give my Top acquisition targets, in order of most desirable to least desirable. I know some people will hate it because they'd rather see these companies continue to be independent, but this is what I'd be looking at if I were in a position of power there.
Anyways, my .02 on acquisition targets if Disney is looking to make a move.
First post in probably well over a year in this forum. Just posting to give my opinion on this as recent M&A movements have made me think of this.
First of all we have to consider that Disney has certain fiduciary responsibilities to stakeholders and other payments that are or will be coming due. They should not consider any large M&A until DSS is profitable OR they are well on target for their guidance of profitability on Hulu and ESPN+ by FY2023 and Disney+ by FY2024 AND they have at least 1 and 2 on this list back, or on a timeline to have it back, with a good handle and financials already planned for the other 3, at least.
- Restart dividends to shareholders
- Restart stock buyback
- Lower long term debt. Remember Disney got over 20B in new debt at the start of COVID
- Buyout of Comcast's 33% equity of Hulu in Jan 2024. Either side can force a sale. Valued at 8.4B as of the last 10K filing, minimum of 9.075B on January 2024. Some analysts believe the value is as much as 15B today. Rumored to be in arbitration over it.
- Buyout of MLB's 15% equity in Bamtech anywhere from Q1 2023 this year to 5 years after that. Either side can force a sale. Valued at 820MM on the 10K.
IMO I'll agree with this article from the Hollywood reporter
Will Hollywood’s Streaming Ambition Lead to Big Gaming Buys?
As Microsoft snaps up Activision Blizzard for $68.7 billion to shore up its streaming platform, and Netflix also enters the sector, Sony — or even Disney — may be next to strike a deal.
www.hollywoodreporter.com
Or this article from variety:
Dear Bob: Here’s the M&A Move That Will Boost Disney
New VIP+ Analysis: Disney may be all in on streaming, but it must build a bigger presence in gaming with the right kind of acquisition.
variety.com
It seems Chapek also agrees
The Walt Disney Company's (DIS) CEO Bob Chapek on Q1 2022 Results - Earnings Call Transcript
The Walt Disney Company (NYSE:NYSE:DIS) Q1 2022 Earnings Conference Call February 9, 2022 4:30 PM ETCompany ParticipantsBob Chapek - Chief Executive...
seekingalpha.com
Disney undoubtedly would have to go to inorganic growth and M&A for Software Development (games, metawhatever, and so on). That is not something they have any sort of expertise in and DSS is an example of that. That was only possible for Disney because of M&A. So to become a bigger player in a hugely growing industry that even Netflix is prioritizing Disney would need to acquire a couple of big players.
The Activision + Bethesda acquisition, Sony buying Bungie, Tencent and others making big acquisitions in the market indicates consolidation is happening. Disney should not want to be dependent only on licensing in this huge and growing market. They can - and should - still do licensing, but they need to prepare enough to be able to feed the market with their own internal developers. Plus with Chapek, Disney and the industry constantly talking about metaverse this would be a big way to help with that as well.
Iger did mention before that Disney was not good at gaming publishing and would revert to licensing. They sold FoxNext and got out of publishing altogether. That's not to say they haven't done that in other areas (i.e. divest only to get back on it in a big way). They sold Power Rangers only to make a bigger play in the boys market with Marvel. They sold Miramax only to make a bigger play in the general entertainment market with Fox. I don't necessarily agree with buying EA though I see the appeal for an ESPN - EA Sports synergy, though they already do have some of that now and could continue with a partnership similar to the partnership with betting companies in sports. They also have some IPs that could be mined in other parts of the business (i.e. Dragon's Age, Dead Space, Battlefield, Mass Effect, Plants v Zombies, Mirror's Edge, etc). When taking a closer look I would think some of those franchises would be tough though (i.e. Mass Effect to compete with Star Wars + all other out of Earth franchises Disney has, Dragon's Age is niche and hard to get a big budget to compete with LOTR and The Witcher, and so on). EA would not be a cheap acquisition. Current market cap and EV around the same, ~40B. With a 30-40% premium on the EV would bring the total to ~55B + assumption of debt (currently ~2B Long Term Debt).
Any Game publisher/dev acquisition should, IMO, include IPs that can be mined in other parts of the business. I'll give my Top acquisition targets, in order of most desirable to least desirable. I know some people will hate it because they'd rather see these companies continue to be independent, but this is what I'd be looking at if I were in a position of power there.
- Nintendo.~60B market cap, 45B EV. I'm old enough to remember all the Nintendoomed memes, but I would be surprised if Nintendo is still independent in 10 years if not less. The question is if Disney would make a play for it.
- Expensive acquisition. Nintendo would be a Fox sized acquisition
- Nintendo is already over 50% foreign owned. Nintendo's CEO comment last year is the most open I have ever heard Nintendo be about being acquired.
- Lots of franchises to mine including Mario (and related subfranchises), Zelda, Pikmin, Splatoon, Metroid, Animal Crossing, and, of course 32% of the Pokemon company. They also have a couple of franchises that would be big on the Anime/Manga market like Golden Sun, Xeno, and Fire Emblem
- Unlike Dragon Age, Zelda is big enough that with enough capital and investment it could become a big medieval fantasy fiction lore a la The Witcher or LOTR (albeit with the PG-13 constraint).
- On the con side a lot of these assets are tied up in long term licensing agreements, i.e. Universal for theme park rights and WB/Universal movie rights (at least for Mario and Pokemon).
- Sega Sammy. ~4.1B market cap, 3.2B EV.
- Relatively low acquisition cost. Likely less than 5B.
- Sold Arcade business in 2020, making it even more attractive for a buyout. Should still divest pachinko business post acquisition
- Lots of franchises to mine including Sonic, ToeJam, Yakuza, Panzer Dragoon and so on. Also franchises that serve the growing Anime and Manga market like Persona, SMT, Skies, PSO, Valkyria Chronicles
- Square Enix. ~6B market cap, 4.7B EV.
- Acquisition cost would be in the 6-7B range most likely
- Kingdom Hearts, a Disney owned IP, is already made by Square Enix
- Franchises to mine are mainly Japanese based (i.e. Manga and Anime) the big ones being Final Fantasy, Dragon Quest, Star Ocean, Mana, Chrono. Also own some western IPs such as Tomb Raider, Deus Ex, Just Cause
- Capcom. 5.2B market cap. 4.3B EV.
- Around 5.5-6B acquisition cost
- Franchises to mine include Resident Evil, Monster Hunter, Mega Man, Onimusha, Dead Rising, etc
- Some of these franchises such as RE and MH are tied in movie licensing deals somewhere else
- An opportunity such as the one Microsoft saw with Activision
- What I mean by this is if they can acquire a company like Ubi, Take Two, EA, Embracer, etc for a relatively cheap price then they should. Not only get the IPs to mine, but also as I mentioned a developer to help them not be fully dependent on licensing AND develop their own metaverse.
- Should not be limited to big publishers. A lot of smaller, talented developers should be looked at. Sony bought Insomniac Games for 230MM, for example.
Anyways, my .02 on acquisition targets if Disney is looking to make a move.
Disney Irish
Premium Member
While I don't disagree with you overall in the long term, and Disney really shouldn't have shutdown its gaming division, but......TLDR; I think Chapek and the Disney board should be targeting game publishers and developers.
First post in probably well over a year in this forum. Just posting to give my opinion on this as recent M&A movements have made me think of this.
First of all we have to consider that Disney has certain fiduciary responsibilities to stakeholders and other payments that are or will be coming due. They should not consider any large M&A until DSS is profitable OR they are well on target for their guidance of profitability on Hulu and ESPN+ by FY2023 and Disney+ by FY2024 AND they have at least 1 and 2 on this list back, or on a timeline to have it back, with a good handle and financials already planned for the other 3, at least.
Those are the main ones. I'm not considering other possible smaller buyouts such as Spider-Man movie license, settlement of companywide disputes with Comcast, old Indiana Jones movies from Paramount and so on. I am also not considering what some analysts have suggested (i.e. that Warner Brother Discovery will sell itself for parts to get a high ROIC).
- Restart dividends to shareholders
- Restart stock buyback
- Lower long term debt. Remember Disney got over 20B in new debt at the start of COVID
- Buyout of Comcast's 33% equity of Hulu in Jan 2024. Either side can force a sale. Valued at 8.4B as of the last 10K filing, minimum of 9.075B on January 2024. Some analysts believe the value is as much as 15B today. Rumored to be in arbitration over it.
- Buyout of MLB's 15% equity in Bamtech anywhere from Q1 2023 this year to 5 years after that. Either side can force a sale. Valued at 820MM on the 10K.
IMO I'll agree with this article from the Hollywood reporter
Will Hollywood’s Streaming Ambition Lead to Big Gaming Buys?
As Microsoft snaps up Activision Blizzard for $68.7 billion to shore up its streaming platform, and Netflix also enters the sector, Sony — or even Disney — may be next to strike a deal.
Or this article from variety:
Dear Bob: Here’s the M&A Move That Will Boost Disney
New VIP+ Analysis: Disney may be all in on streaming, but it must build a bigger presence in gaming with the right kind of acquisition.
It seems Chapek also agrees
The Walt Disney Company's (DIS) CEO Bob Chapek on Q1 2022 Results - Earnings Call Transcript
The Walt Disney Company (NYSE:NYSE:DIS) Q1 2022 Earnings Conference Call February 9, 2022 4:30 PM ETCompany ParticipantsBob Chapek - Chief Executive...
Disney undoubtedly would have to go to inorganic growth and M&A for Software Development (games, metawhatever, and so on). That is not something they have any sort of expertise in and DSS is an example of that. That was only possible for Disney because of M&A. So to become a bigger player in a hugely growing industry that even Netflix is prioritizing Disney would need to acquire a couple of big players.
The Activision + Bethesda acquisition, Sony buying Bungie, Tencent and others making big acquisitions in the market indicates consolidation is happening. Disney should not want to be dependent only on licensing in this huge and growing market. They can - and should - still do licensing, but they need to prepare enough to be able to feed the market with their own internal developers. Plus with Chapek, Disney and the industry constantly talking about metaverse this would be a big way to help with that as well.
Iger did mention before that Disney was not good at gaming publishing and would revert to licensing. They sold FoxNext and got out of publishing altogether. That's not to say they haven't done that in other areas (i.e. divest only to get back on it in a big way). They sold Power Rangers only to make a bigger play in the boys market with Marvel. They sold Miramax only to make a bigger play in the general entertainment market with Fox. I don't necessarily agree with buying EA though I see the appeal for an ESPN - EA Sports synergy, though they already do have some of that now and could continue with a partnership similar to the partnership with betting companies in sports. They also have some IPs that could be mined in other parts of the business (i.e. Dragon's Age, Dead Space, Battlefield, Mass Effect, Plants v Zombies, Mirror's Edge, etc). When taking a closer look I would think some of those franchises would be tough though (i.e. Mass Effect to compete with Star Wars + all other out of Earth franchises Disney has, Dragon's Age is niche and hard to get a big budget to compete with LOTR and The Witcher, and so on). EA would not be a cheap acquisition. Current market cap and EV around the same, ~40B. With a 30-40% premium on the EV would bring the total to ~55B + assumption of debt (currently ~2B Long Term Debt).
Any Game publisher/dev acquisition should, IMO, include IPs that can be mined in other parts of the business. I'll give my Top acquisition targets, in order of most desirable to least desirable. I know some people will hate it because they'd rather see these companies continue to be independent, but this is what I'd be looking at if I were in a position of power there.
With that said, even if Disney makes a play for a couple of big game publishers they should still license out some of their IPs like Marvel and Star Wars, among others, to AAA developers. Those IPs are huge and command a high minimum royalty guarantee and revenue sharing arrangement. Win-Win for them.
- Nintendo.~60B market cap, 45B EV. I'm old enough to remember all the Nintendoomed memes, but I would be surprised if Nintendo is still independent in 10 years if not less. The question is if Disney would make a play for it.
- Expensive acquisition. Nintendo would be a Fox sized acquisition
- Nintendo is already over 50% foreign owned. Nintendo's CEO comment last year is the most open I have ever heard Nintendo be about being acquired.
- Lots of franchises to mine including Mario (and related subfranchises), Zelda, Pikmin, Splatoon, Metroid, Animal Crossing, and, of course 32% of the Pokemon company. They also have a couple of franchises that would be big on the Anime/Manga market like Golden Sun, Xeno, and Fire Emblem
- Unlike Dragon Age, Zelda is big enough that with enough capital and investment it could become a big medieval fantasy fiction lore a la The Witcher or LOTR (albeit with the PG-13 constraint).
- On the con side a lot of these assets are tied up in long term licensing agreements, i.e. Universal for theme park rights and WB/Universal movie rights (at least for Mario and Pokemon).
- Sega Sammy. ~4.1B market cap, 3.2B EV.
- Relatively low acquisition cost. Likely less than 5B.
- Sold Arcade business in 2020, making it even more attractive for a buyout. Should still divest pachinko business post acquisition
- Lots of franchises to mine including Sonic, ToeJam, Yakuza, Panzer Dragoon and so on. Also franchises that serve the growing Anime and Manga market like Persona, SMT, Skies, PSO, Valkyria Chronicles
- Square Enix. ~6B market cap, 4.7B EV.
- Acquisition cost would be in the 6-7B range most likely
- Kingdom Hearts, a Disney owned IP, is already made by Square Enix
- Franchises to mine are mainly Japanese based (i.e. Manga and Anime) the big ones being Final Fantasy, Dragon Quest, Star Ocean, Mana, Chrono. Also own some western IPs such as Tomb Raider, Deus Ex, Just Cause
- Capcom. 5.2B market cap. 4.3B EV.
- Around 5.5-6B acquisition cost
- Franchises to mine include Resident Evil, Monster Hunter, Mega Man, Onimusha, Dead Rising, etc
- Some of these franchises such as RE and MH are tied in movie licensing deals somewhere else
- An opportunity such as the one Microsoft saw with Activision
- What I mean by this is if they can acquire a company like Ubi, Take Two, EA, Embracer, etc for a relatively cheap price then they should. Not only get the IPs to mine, but also as I mentioned a developer to help them not be fully dependent on licensing AND develop their own metaverse.
- Should not be limited to big publishers. A lot of smaller, talented developers should be looked at. Sony bought Insomniac Games for 230MM, for example.
Anyways, my .02 on acquisition targets if Disney is looking to make a move.
I think you are reading too much into Chapek's comments. He isn't talking about video games, he is talking about using technology such as AR and next level streaming to enhance the guest experience at the Disney Parks, sporting events, and the like, ie the metaverse. This also includes Disney making a big play into sport betting which will expands ESPN's reach, which it already started with some of their partnerships with casinos such as Caesars. So his comments about technology aren't an indication of him going shopping for a gaming company.
/cdn.vox-cdn.com/uploads/chorus_asset/file/16025342/acastro_190411_1777_Disney_Streaming_0003.0.jpg)
Disney is placing its bets on sports streaming and the metaverse
Betting, interactivity, and sports programming is key.
www.theverge.com
Overall I don't see Disney making a play for a gaming company anytime soon, if ever.
DisneyFan32
Well-Known Member
- In the Parks
- Yes
I can see Nintendo could acquiring Sega Sammy if they want it.
Twilight_Roxas
Well-Known Member
If you all forgot. Disney does not want to make games anymore.
AnotherDayAnotherDollar
Well-Known Member
While I don't disagree with you overall in the long term, and Disney really shouldn't have shutdown its gaming division, but......
I think you are reading too much into Chapek's comments. He isn't talking about video games, he is talking about using technology such as AR and next level streaming to enhance the guest experience at the Disney Parks, sporting events, and the like, ie the metaverse. This also includes Disney making a big play into sport betting which will expands ESPN's reach, which it already started with some of their partnerships with casinos such as Caesars. So his comments about technology aren't an indication of him going shopping for a gaming company.
Disney is placing its bets on sports streaming and the metaverse
Betting, interactivity, and sports programming is key.
Overall I don't see Disney making a play for a gaming company anytime soon, if ever.
I just took his comment as them prioritizing sofware development, an area they have historically struggled in, not necessarily that they are shopping.
Metaverse has different meanings (for me it's just PS Home 2.0), but for them to even achieve what you are saying they need to acquire a software development company or two as internally they are at least a decade behind. I would assume gaming companies would be at the top of the ticket, but it can be a general software company as well.
Disney Irish
Premium Member
Disney actually has a very talented team of software developers for a lot of aspects of the company, just look at Volume which is 100% all software based. Now I know from the Parks side we don't think so because of the tech fails there, but that isn't a complete picture. They've also been hiring software developers specifically for the metaverse project like crazy, so they can build this team without acquiring another company.
In fact they've already filed patents on a virtual world simulator in the real world, basically the ability to 3D project onto real world objects. This is exactly what metaverse is within Disney, the ability to expand the guest personalized experience. So they are already working on it, what appears to be expanding on the tech used for Volume out in the real world, I don't think they are as far behind as you think they are.
Now could they benefit by acquiring a company like Epic Games for their Unreal Engine which is the software they use for Volume, 100% And in fact I personally would say they should as they use it extensively now in all their film production, and appear to be using it for metaverse as well. But do they NEED it, no as they've been successful in using it so far just by licensing the technology.