If Disney was just a movie studio with theme parks, what is it worth? That’s the value I would place on it. The streaming business is just plain awful. Just license the content.
Right now the theme parks division is the only profitable division. Extraordinarily profitable, it’s floating the rest of the company.
1 Like
My kids call it “Disney Minus.” Just give up on streaming.
why? I really like it. It’s better than their IP spread across 6+ streaming sites.
1 Like
Like, honestly, people are really short sighted with disney’s streaming strategy. They also invested heavily in hulu, and try to sell d+ as an addon to a lot of other services. This is directly in competition with traditional cable so they fight it hard. But as an end user, disney’s model is actually much better and cheaper and easier to use.
I know revenue wise it hasn’t paid off yet, but i don’t think it was a bad decision when it was made nor for the future. They have always been a very forward looking company.
My kids love it but guess it’s age related. My son is probably one worlds most prolific watchers of Rescue Rangers show (1989)
2 Likes
my 4 year old self probably could challenge him on that. Great show. When disney+ came out at first, you couldnt easily find that shit
1 Like
there’s [also a rescue rangers video game for NES that was very good for children of that era]Chip 'n Dale Rescue Rangers (video game) - Wikipedia).
great game
1 Like
From a Benjamin Graham style value standpoint it looks terrible, 0/10 on my screener. I was thinking about trying to look at it and break it down by division to see what the company may end up being worth, but basically you’re trying to figure out:
A) What is ESPN going to sell for? (Or what’s their cut of profits worth if they partner up with someone else on production/distribution.) The old model where ESPN was a cash cow because everyone with cable had to pay for it is coming to an end.
B) What is the movie/streaming business actually worth? This comes down to how many movies get made the old way (and the strike is a big risk factor, too) versus what is Disney+ actually worth? Last I checked, they were still losing money on Disney+. That may have been a few quarters ago, but if they’re making a profit there it’s marginal. The big question IMO is whether they can actually stream stuff efficiently enough with advanced enough algorithms to really compete and win in that space. They do have some good IP here, which is worth something.
C) What is the parks business worth?
D) What is the merchandise/licensing business worth?
Then you can add those numbers up and you’ve probably got a ballpark estimate. My five minute wild ass guess aiming to come in conservatively is something like $100B for parks (I’d say $120B less their debt and I’m just making a wild ass ballpark guess at how much of their debt is in the parks side), $10B for ESPN, $10B for Disney+, and I wouldn’t buy a movie studio business right now so I’m going with $0 but obviously the market would value it at billions of dollars too - I just think that strike is a huge risk for the studios (@boredsocial made some good points to me in a recent convo).
So $120B seems like a number at which it’s worth spending more time looking at DIS. Currently trading at $150B.
I was aiming low and didn’t spend much time, so $150B could be a very reasonable value, but it’s probably not a bargain.
You could make an argument that it’s fine, but I’m guessing they’re not doing nearly as good of a job as other streaming platforms at minimizing costs and maximizing efficiency.
I’d argue that there is more value to their content split up because the people who would pay for Star Wars stuff are pretty different than the people who would pay for princess movies, plus if they bail on the streaming side and just license it, it’s a lot closer to their old model that they had success in and they have a lot of content that could be tentpolecontent for streaming platforms.
Difficult for me to see the movie studio business as a zero or anywhere close to it because I think people will still be watching Star Wars, Marvel, Pixar, and the animated classics in 10, 20, 30 years regardless of the strike. In the long term, generative AI may be able to support movie production in ways that really increase the leverage the big studios have over unions and star actors but that’s really speculative and not part of any valuation.
I think there is a chance the actors in particular currently have way more leverage than the studios are admitting/realize. Look what happened to the record labels the last few years.
I agree it’s not $0, but it may be just the value of licensing their IP, or more likely running on way smaller margins. But since I currently wouldn’t gamble on a movie studio stock, for my purposes that portion of the business just counts as $0 right now and would be gravy.
Like basically if I buy DIS it’s gonna be a really good deal.
I don’t know, an actor can’t re-make a movie to screw the rights owner to the IP. Spiderman had what, 3 or 4 different lead actors in as many movies and is still made money? There is definitely something to be said for “star power” and consumers are more likely to follow an actor to a new studio or production company than the reverse. But until they start producing their own movies and we stop going to movie theaters they are going to be beholden to the people with money and distribution networks.
It’s really useful if you have young kids and just want access to all their shit in one place.
1 Like
The key is a lot of them could produce their own movies now, and distribution is also way easier logistically than it was 20 years ago.
1 Like
yeah espn+ and disney+ is super valuable to me for encanto, cinderella and tangled alone.
1 Like
The old IP is worth what it’s worth and I’m sure Disney will continue to produce movies. What I’m not sure about is the future of movie production. The reality is that generative AI primarily lowers the cost and manpower required to make a movie. The whole point of a movie studio is to write the checks to make the movie and then market and distribute it. Marketing and distribution are very fairly easy if Louis CK can do it for himself and make pretty good money at it. The cost to produce a movie going down dramatically doesn’t reduce the actors/directors/writers leverage in negotiating with the studio it frees them from needing anything at all from the studio.
But also generative AI is hugely overblown. If I can’t get it to write sales emails that are good enough to justify the cost of the leads to feed it I’m not expecting it to replace actually great writers anytime in our lifetimes… and if it does manage to produce anything of note I promise the person tweaking the prompts will be a fairly talented writer that is using the AI as a productivity enhancing tool.
Imagine being literally any AAA writer/director/producer combo with an 9+ figure net worth right now in the middle of this strike. The studios are trying to fuck you and everyone you work with as hard as they humanly well can and every day that passes you aren’t working is 1) very boring and 2) costs you a metric fuck ton of money. Every project you’re involved with is under contract with some studio, but the longer it drags out the more it makes sense to form your own production company, do the same deal A24 did with the unions, and never let the studios take another dollar of your money ever again.
Pretty good discussion of this with Mike Schur on Lebatard show this week. WB/Discovery alone has already lost 300-500 million due to the strike, in order to not pay their writers the additional 40 million they were asking for. Also made the point that the reason this is dragging out so long is that the studios and streaming companies can’t even get on the same page to begin negotiating properly with the Union. Partly because the streaming companies could be viewing the studios as potential acquisitions.
Yeah this strike is stupid. I can honestly say that if I was pretty much any of these studio heads I’d have been the first to break ranks and do an actual deal. I’d have told everyone else in the AMPTP that the first day of the strike I would begin negotiating with the union on my own and that they didn’t have my permission to allow a strike to happen in the first place.
That should have been the position of for sure more than half of the members of the association. This is just a horrible time for this for the producers and streamers. The only possible justification I can come up with is that it will cause them to report very good 3rd and 4th quarter net profit numbers, but that’s a really good example of getting chemo to shave your head.
How is the bolded measured?