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General Category => Investment Ideas => Topic started by: Schwab711 on September 30, 2015, 12:02:22 PM

Title: DIS - Disney
Post by: Schwab711 on September 30, 2015, 12:02:22 PM
I couldn't find the DIS thread so please link if there is one and I'll move this comment there.

I would love to see DIS spin-off ESPN since the rest of their businesses are fantastic and I would hate to see them suffer because of ESPN's problems. It doesn't seem like ESPN is necessary for their current business strategy other than ABC/ESPN sports cross-over. They could keep a controlling stake (31% or 51%, depending on their relationship with Hearst) and stipulate an ABC/ESPN relationship agreement for the next 5-10 years. It would help DIS lower their reliance on cable bundling.

The main argument against this is ESPN's carriage negotiating leverage supports higher carriage fees for the Disney Channel and other 2nd-tier channels (ESPN2, ESPN3, ESPNU, ect). I don't think this would be too big of a problem if they kept a controlling stake in ESPN and secured the relationship agreement.

I just want to buy DIS but I don't want ESPN to be so important to my investment.

Stock Price: $101.83
*Ratios are all TTM

MC:   $171.8B
EV:   $185.3B
P/E:   21.2
Fwd P/E:   18.1
EV/EBITDA: 12.5
ROA: 9.11%
ROE: 17.63%
Title: Re: DIS - Disney
Post by: DCG on September 30, 2015, 12:44:15 PM
At one point (just a few years ago) part of the reason I like Disney was because of ESPN. Now, they've unfortunately basically turned ESPN into TMZ for sports (especially with their website/app).
Title: Re: DIS - Disney
Post by: Schwab711 on September 30, 2015, 01:02:33 PM
At one point (just a few years ago) part of the reason I like Disney was because of ESPN. Now, they've unfortunately basically turned ESPN into TMZ for sports (especially with their website/app).

Agreed! I think my biggest concern with ESPN is what you mention. They have chased away hardcore sports fans who are now going to specialized sites instead (MLBTR, FanGraphs, ProFootballFocus, ProFootballTalk, ect). I think ESPN is going to regret this strategy once cord-cutting/de-bundling begins since the average fan they currently pander to will not pay the >$20/month for ESPN alone (the a la carte equivalent/SlingTV price).

I keep waiting for NBC or Fox sports to go on a niche sports site buying spree and try to become the sports leader for hardcore fans. That is going to be the long-term future of sports content, in my opinion.

Does anyone think sports is in a bubble? Team prices, tv deals, ticket prices, and just about everything else related to them. It seems like more average folks are big sports fans now than even 10-15 years ago. It almost seems like a fad for the average person.
Title: Re: DIS - Disney
Post by: ccap on October 01, 2015, 07:19:54 AM
I think sports are making some decisions that they will regret later on.  Many local baseball games are no longer on TV.  They are on small cable channels.  This probably makes the team money in the short term, but if kids aren't watching the sports on TV, they will have no interest in forking over money when they are older.  College sports are similar.  Team specific cable channels have sprouted up that keep the games from kids (e.g. Longhorn network).  If kids aren't brainwashed early, they won't fork over cash later.
Title: Re: DIS - Disney
Post by: ccplz on October 01, 2015, 09:59:15 AM
Disney seems a lot more expensive than Fox/TWX with a comparable set of assets..
Title: Re: DIS - Disney
Post by: GregS on February 10, 2016, 12:45:28 PM
Anyone looking at Disney at these levels?

Questions over ESPN are obviously weighing on the stock, but the IP is best in class and the studio pipeline is enormous. More Star Wars, more Marvel, sequels from Cars, Nemo, Frozen, Toy Story, Incredibles, Pirates. Studio IP driving theme park/resort visits and merchandising. Increasingly global reach.

Here's Iger stating the bull case on the call (in response to a question about separation):

Quote
I'm not going to talk about separating those assets. We fully expected that our media assets are going to continue to contribute to our growth. We also are designed, as a Company, to leverage intellectual property across a lot of our businesses or to leverage the collection of brands nicely in the marketplace. And that also is reflected in the way we operate the businesses from an expense perspective, with consolidation in many different areas.

So if you look at the profile of the Company, interestingly enough, since 2009, look at the growth profile, the Company has grown on a compounded basis by 14%. The media networks have driven about 8% compounded a year and the rest of the Company grew 23%. So 8% a year is pretty strong. 23% is extraordinary. 14%, pretty damn strong, too.

I think that what that says is really, is that over the period of time, we've actually diversified our ability to generate growth and profitability and that was very purposeful. These investments that we made it Pixar and Marvel and in Lucasfilm and the investments that we've made in our parks were designed for us to diversify our bottom line or our growth. And that was not just across businesses, but really across the world, because a lot of these businesses are global in nature, unlike some of our media assets.
Title: Re: DIS - Disney
Post by: TorontoRaptorsFan on February 10, 2016, 01:16:47 PM
It's a permanent holding for me.

Wonderful set of movies coming down the pipeline, StarWars expansion to the theme parks. New Disney park opened in China.

Title: Re: DIS - Disney
Post by: LongTermView on February 10, 2016, 01:26:12 PM
Long DIS.  They are a unique company.
Title: Re: DIS - Disney
Post by: valueinvesting101 on February 10, 2016, 01:31:45 PM
Disney's success is based on two set of films. Superheroes and Animation. Boundary between then is blurring already.

This has been successful strategy for last few years but it seems that we are reaching saturation level with it. There are other franchisees as well. Harry Potter series is adding 3 more movies. LOTR adding 3 Hobbit movies etc. 

Disney does have good assets but they are bound by competition and it would be difficult from to continue same success over next 5 years due to fatigue with similar kind of movies. This is qualitative assessment.

I believe ultimately Disney's success will depend on capitalizing growing middle class and younger population in Asia. It could be tricky market to do well over medium to longer term.

For quantitative perspective, ESPN forms bulk for profit percentage and that model is definitely under pressure.  Media networks was 69% of operating income in 2011 and 53% in 2015. Partly due to success of studio entertainment which rose from 7% of OP to 13.5% but 3 times in actual numbers from $618 million to $1.9 billion. This is definitely cyclical part and drives park and consumer product revenue to large extent.

So you have 50% of profit at risk from ESPN and remaining looks right now but can falter due to change in market taste or bad execution or something else. From execution perspective, studio side seem to be doing really good during last 4 years. Can it be guaranteed for next 4-5 years? I am skeptical. But it is hard to predict business.

I think it a good business and better quality than Fox or TWC but it valuation seems expensive right now.

Title: Re: DIS - Disney
Post by: DavidVY on March 24, 2016, 10:25:28 AM
Selling around 10x EV/EBIT (gurufocus).

Its selling around 20 P/E with huge tailwind of shanghai park opening soon, ginormous real estate investments (carried way below cost).

The Disney machine is a money-suck that appeals to all ages, demographics and geographies.

I foresee a huge runway ahead and ever increasing global demand for its products (giant middle class emerging in developing world).

ESPN has great brand value. I don't really see it going anywhere long-term. Minor setbacks w/the content debundling issue imo.
Title: Re: DIS - Disney
Post by: glorysk87 on March 24, 2016, 02:32:23 PM
Selling around 10x EV/EBIT (gurufocus).

Its selling around 20 P/E with huge tailwind of shanghai park opening soon, ginormous real estate investments (carried way below cost).

The Disney machine is a money-suck that appeals to all ages, demographics and geographies.

I foresee a huge runway ahead and ever increasing global demand for its products (giant middle class emerging in developing world).

ESPN has great brand value. I don't really see it going anywhere long-term. Minor setbacks w/the content debundling issue imo.

I disagree. ESPN has great brand value, sure. But brand value can only carry you so far.  If you look at affiliate fees for various channels, ESPN is at the top of the list. Their affiliate fees are orders of magnitude higher than most other channels.  The bulk of the channels out there charge between $1 and $2 per subscriber in affiliate fees.  ESPN charges over $6.  Add in the plummeting ratings and you have a very solid recipe for significant price declines at ESPN.  I don't think it's crazy to say that the affiliate fees for ESPN should be closer to $4, or lower.  That smashes the operating income derived from ESPN, which is a significant portion of Disney's Media Networks income.
Title: DIS - Disney
Post by: buylowersellhigh on April 04, 2016, 02:25:12 PM
COO Stepping Down



Disney's Operating Chief to Leave Company--2nd Update
 
DOW JONES & COMPANY, INC. 4:22 PM ET 4/4/2016

Walt Disney Co. (DIS) said Chief Operating Officer Thomas Staggs, who had been considered a candidate for chief executive, will step down on May 6.

Mr. Staggs will be a special adviser to Chief Executive Robert Iger through this fiscal year, which ends around the beginning of October. Reasons for his departure weren't immediately available.

"With approximately two years left before Mr. Iger steps down as chairman and chief executive officer, Disney's(DIS) board of directors will broaden the scope of its succession planning process to identify and evaluate a robust slate of candidates for consideration," the company said.

Mr. Staggs, who has been with Disney(DIS) for 26 years, was named chief financial officer in 1998 and held the post for 12 years. After that, he traded jobs with Jay Rasulo, then head of Disney's(DIS) parks and resorts division.

The selection of Mr. Staggs as operating chief in early 2015 appeared to sideline Mr. Rasulo, his main rival for the CEO post. In June 2015, Disney(DIS) said Mr. Rasulo would step down. Later that month, it said Treasurer Christine McCarthy would become CFO.

In February, Disney(DIS) reported record quarterly earnings on the huge box office for "Star Wars" and a 9% revenue increase at its theme-park segment.

An important focus for investors has been the effect of "cord-cutting" on Disney's(DIS) cable business, particularly sports giant ESPN(DIS). ESPN(DIS) lost subscribers and higher programming costs, but Mr. Iger said in a conference call after the earnings report that ESPN(DIS) had experienced an uptick in subscriber numbers in recent months.
Title: Re: DIS - Disney
Post by: rogermunibond on April 05, 2016, 06:48:18 AM
It seems like both of the men who had been the presumptive heir-apparents for Iger would have failed the board's issues with content/creatives management.  It seems like both Rasulo (Parks then CFO) and Staggs (CFO then Parks) while strong in operational experience and finance didn't have the backing of any of the following:  WD/Pixar Animation Studios (Catmull and Lasseter), Alan Horn (WD Studios), Disney-ABC TV (Ben Sherwood).  If that was the case, then it begs the question as to WHY? the board and Iger didn't have an internal creative exec who they could also move into Parks and then CFO to give them the full breadth of skills needed for the CEO job?!

Title: Re: DIS - Disney
Post by: giofranchi on June 10, 2016, 07:56:19 AM
I like DIS for almost the same reasons I like NKE, and I have opened a relatively small position. DIS today is cheaper than NKE, with a forward P/E of 16. And during the last 10 years it has increased earnings at an even faster CAGR than NKE: 15%.
Just like NKE, DIS is very little indebted.
What's not to like?

Cheers,

Gio
Title: Re: DIS - Disney
Post by: LC on June 10, 2016, 12:10:53 PM
welcome to the world of boring garpy stuff, geo :D
i am also looking at disney
Title: Re: DIS - Disney
Post by: fareastwarriors on June 15, 2016, 03:07:06 PM
How China Won the Keys to Disney’s Magic Kingdom

http://www.nytimes.com/2016/06/15/business/international/china-disney.html?action=click&contentCollection=Media&module=RelatedCoverage&region=EndOfArticle&pgtype=article (http://www.nytimes.com/2016/06/15/business/international/china-disney.html?action=click&contentCollection=Media&module=RelatedCoverage&region=EndOfArticle&pgtype=article)
Title: Re: DIS - Disney
Post by: fareastwarriors on July 10, 2016, 06:09:12 PM
When Walt went to China

Disney’s theme park in Shanghai promises a ‘rain of renminbi’ — but also fuels paranoia about American cultural dominance

http://www.ft.com/cms/s/2/f87b5de6-3895-11e6-9a05-82a9b15a8ee7.html (http://www.ft.com/cms/s/2/f87b5de6-3895-11e6-9a05-82a9b15a8ee7.html)
Title: Re: DIS - Disney
Post by: JBTC on October 02, 2016, 07:19:22 AM

Does anyone think sports is in a bubble? Team prices, tv deals, ticket prices, and just about everything else related to them. It seems like more average folks are big sports fans now than even 10-15 years ago. It almost seems like a fad for the average person.

Curious if anyone has seen data on this - one would assume growth in sports is secular in general. If not, what factors could cause people to lose interest in sports over time?
Title: Re: DIS - Disney
Post by: saltybit on October 05, 2016, 05:19:38 PM
http://www.bizjournals.com/boston/news/2016/10/05/disney-ceo-bob-iger-says-why-netflix-twitter-could.html
Title: Re: DIS - Disney
Post by: SlowAppreciation on October 06, 2016, 09:30:36 AM

Does anyone think sports is in a bubble? Team prices, tv deals, ticket prices, and just about everything else related to them. It seems like more average folks are big sports fans now than even 10-15 years ago. It almost seems like a fad for the average person.

Curious if anyone has seen data on this - one would assume growth in sports is secular in general. If not, what factors could cause people to lose interest in sports over time?

http://www.wsj.com/articles/ratings-fumble-for-nfl-surprises-networks-advertisers-1475764108
Title: Re: DIS - Disney
Post by: Schwab711 on October 06, 2016, 10:03:20 AM
I think you could argue almost everything Disney owns/is tied to, maybe other than Disney/Pixar, could be in a bubble. Star Wars, super heroes, the NFL, ect. I can't see growth from here and there's no way to break up the company at this point. Disney Parks are the best asset they own.
Title: Re: DIS - Disney
Post by: SlowAppreciation on October 06, 2016, 10:21:58 AM
I think you could argue almost everything Disney owns/is tied to, maybe other than Disney/Pixar, could be in a bubble. Star Wars, super heroes, the NFL, ect. I can't see growth from here and there's no way to break up the company at this point. Disney Parks are the best asset they own.

Might be a bubble, but I also think the movies and characters in the Disney profile are a pretty sure bet for the very long-term. I don't see a scenario where 30 years from now, Toy Story or Mickey Mouse or the Lion King are any less popular.

So maybe you overpay now since today's prices are a little bubbly, but you probably do okay in the very very long term because of their brand staying power.
Title: Re: DIS - Disney
Post by: RichardGibbons on October 06, 2016, 04:38:48 PM
Curious if anyone has seen data on this - one would assume growth in sports is secular in general. If not, what factors could cause people to lose interest in sports over time?

http://www.wsj.com/articles/ratings-fumble-for-nfl-surprises-networks-advertisers-1475764108

I watched an NFL game the other day, and it was painful how much advertising I was forced to watch, to the extent that I won't watch another game until possibly playoffs.

I'm only one anecdotal data point--and are therefore meaningless--but I wonder whether Netflix and streaming are reducing people's tolerance for advertising, particularly kids who grow up almost never seeing a TV ad?  If that's the case, even if the NFL product is as good as it ever was, fewer people might watch because the advertising is now intolerable to them.
Title: Re: DIS - Disney
Post by: Spekulatius on October 06, 2016, 04:51:19 PM
Curious if anyone has seen data on this - one would assume growth in sports is secular in general. If not, what factors could cause people to lose interest in sports over time?

http://www.wsj.com/articles/ratings-fumble-for-nfl-surprises-networks-advertisers-1475764108

I watched an NFL game the other day, and it was painful how much advertising I was forced to watch, to the extent that I won't watch another game until possibly playoffs.

I'm only one anecdotal data point--and are therefore meaningless--but I wonder whether Netflix and streaming are reducing people's tolerance for advertising, particularly kids who grow up almost never seeing a TV ad?  If that's the case, even if the NFL product is as good as it ever was, fewer people might watch because the advertising is now intolerable to them.

I don't watch NFL, but I just record sports events on my DVR and watch them with a ~30min time lag and fast forward over the advertisement blocks. I agree that these ads are unbearable, if you get attuned to streaming services.
Title: Re: DIS - Disney
Post by: fareastwarriors on October 06, 2016, 05:14:21 PM
I'M WEIRD. I enjoy watching ads.... I know it's crazy. I like to see what companies are spending marketing $ on.

I do find it annoying when the ads repeat within the same commercial segment!
Title: Re: DIS - Disney
Post by: SlowAppreciation on October 07, 2016, 07:08:06 AM
Curious if anyone has seen data on this - one would assume growth in sports is secular in general. If not, what factors could cause people to lose interest in sports over time?

http://www.wsj.com/articles/ratings-fumble-for-nfl-surprises-networks-advertisers-1475764108

I watched an NFL game the other day, and it was painful how much advertising I was forced to watch, to the extent that I won't watch another game until possibly playoffs.

I'm only one anecdotal data point--and are therefore meaningless--but I wonder whether Netflix and streaming are reducing people's tolerance for advertising, particularly kids who grow up almost never seeing a TV ad?  If that's the case, even if the NFL product is as good as it ever was, fewer people might watch because the advertising is now intolerable to them.

I feel similarly. Didn't the WSJ do a study a few years ago across the major sports where they compared "game time" to "action time" and football had something like 2minutes of action for a 4+hour game?

When I do want to watch a game now, I'll started streaming the games from forums as they don't air the commercials. Much better that way. One can only see so many commercials for Bud and F150s...
Title: Re: DIS - Disney
Post by: Jurgis on October 07, 2016, 10:59:10 AM
Somewhat OT, since I don't watch sports and don't watch live TV with commercials.

Like Spekulatius said, watching anything with commercials is just painful.

One anecdotal data point is my mother who's not technical at all. She now has cable package with full-auto-DVR functionality for all programs that allows watching past programs, fast forwarding, etc. She's FFing the ads like there's no tomorrow. I was surprised how easy, convenient and simple this is. This is in Lithuania. Don't know if this is available/widespread in US.

Title: Re: DIS - Disney
Post by: lincolnc on November 14, 2016, 09:12:40 PM
https://www.youtube.com/watch?v=Jt6mmH25s74

Malone on DIS 36:00
Title: Re: DIS - Disney
Post by: villainx on March 08, 2017, 09:12:43 AM
Thinking about ESPN and DIS, I wonder if it will get to the point of Buffett's quote:

"When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

Sounds like ESPN is becoming more of a serious issue, and not sure extent of how solvable it is, even assuming Iger is among the greatest CEO ever.
Title: Re: DIS - Disney
Post by: rogermunibond on March 08, 2017, 09:30:46 AM
We'll need to see how Youtube, DirectTV, Sling and any other skinny bundles perform now that ESPN has penetrated those packages.
Title: Re: DIS - Disney
Post by: HalfMeasure on March 08, 2017, 09:33:06 AM
Thinking about ESPN and DIS, I wonder if it will get to the point of Buffett's quote:

"When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

Sounds like ESPN is becoming more of a serious issue, and not sure extent of how solvable it is, even assuming Iger is among the greatest CEO ever.

Are you trying to suggest that TV sports networks are a business with poor fundamental economics? I'm all for pieces of Buffett wisdom, but this usage is incredibly misguided.
Title: Re: DIS - Disney
Post by: villainx on March 08, 2017, 09:47:49 AM
Thinking about ESPN and DIS, I wonder if it will get to the point of Buffett's quote:

"When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

Sounds like ESPN is becoming more of a serious issue, and not sure extent of how solvable it is, even assuming Iger is among the greatest CEO ever.

Are you trying to suggest that TV sports networks are a business with poor fundamental economics? I'm all for pieces of Buffett wisdom, but this usage is incredibly misguided.

Maybe it's not at that point yet, or I am being pushing the issues to the extreme, but I'm just trying to think about the ESPN issue. It'll take a while to play out though.  Otherwise I remain long DIS.

Title: Re: DIS - Disney
Post by: educatedidiot on March 08, 2017, 12:53:09 PM
Thinking about ESPN and DIS, I wonder if it will get to the point of Buffett's quote:
"When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

The days of consistent 5%+ revenue growth and 40% operating margins may be gone, but considering that Disney's cable networks are still generating $6 billion+ of EBITDA, 35%+ operating margins, and virtually no capex / asset intensity -- I'm not sure I'd classify that as a business with "bad economics." 

You can see the year by year performance of Disney's cable networks here:
http://www.rocketfinancial.com/Financials.aspx?fID=5102&p=2&pw=168324&rID=8&tID=1&segID=55416
Title: Re: DIS - Disney
Post by: GregS on March 08, 2017, 02:40:34 PM
Thinking about ESPN and DIS, I wonder if it will get to the point of Buffett's quote:
"When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

The days of consistent 5%+ revenue growth and 40% operating margins may be gone, but considering that Disney's cable networks are still generating $6 billion+ of EBITDA, 35%+ operating margins, and virtually no capex / asset intensity -- I'm not sure I'd classify that as a business with "bad economics." 

You can see the year by year performance of Disney's cable networks here:
http://www.rocketfinancial.com/Financials.aspx?fID=5102&p=2&pw=168324&rID=8&tID=1&segID=55416

Indeed.  Obviously there are subscriber issues as the cable bundle is cracking, which means the growth days for cable/ESPN are over.  But there seems to be a view that ESPN faces a permanent squeeze of ever-increasing rights fees and declining subscribers hitting ad and affiliate revenue.  I don't see rising costs as permanent.  Costs and revenues aren't going to move in lockstep, but over time they are going to move together.  In other words, if the audience for televised sports has peaked, then broadcast revenues for the leagues has peaked as well, and will move down as contracts roll off. ESPN has competition for rights, sure, but they all face the same pressures and ESPN has shown a willingness to walk away from deals that don't make sense (e.g., NASCAR).

In the meantime, resorts and studio are firing on all cylinders and becoming a more important part of the company.
Title: Re: DIS - Disney
Post by: CorpRaider on March 08, 2017, 04:43:16 PM
I feel you, but one could also argue that ESPN distribution is totally fungible, they have lost leverage and have been forced to share the operations with the content producers (e.g., all the co-branded networks, such as Longhorn, Big 10 , SEC for example) and there is massive competition coming from Fox, NBC; everyone because sports it the only damn thing people watch live and now everyone knows it (i.e., content costs ain't coming down as fast as revenues and they are all going to get squeezed).
Title: Re: DIS - Disney
Post by: villainx on March 08, 2017, 06:02:32 PM
I was looking it more at the angle of how management would tackle the ESPN issue.  Iger is more operator than allocator?  Or just spinning the issue around to look at it from another side.  ESPN is a real issue, which problems are kinda known. 
Title: Re: DIS - Disney
Post by: rogermunibond on March 08, 2017, 06:26:14 PM
Iger acquired Pixar, Marvel and Lucasfilm. Last two being slam dunks. I think he's been fairly good at allocating capital, and that's not including Disney Shanghai.
Title: Re: DIS - Disney
Post by: Phaceliacapital on March 09, 2017, 01:44:18 AM
Iger acquired Pixar, Marvel and Lucasfilm. Last two being slam dunks. I think he's been fairly good at allocating capital, and that's not including Disney Shanghai.

I always believe it an important sidenote that Iger gave those 3 targets to the board when he layed out his plan of what he would do as CEO. + shanghai is just unbelievable, what a work that must have been...

Returning to ESPN, but you can only say this in hindsight, Disney made the mistake of locking in longerexpensive sports rights just as technology started to allow massive unbundling, which at the moment looks very unfortunate.
Title: Re: DIS - Disney
Post by: giofranchi on March 09, 2017, 03:27:38 AM
Returning to ESPN, but you can only say this in hindsight, Disney made the mistake of locking in longerexpensive sports rights just as technology started to allow massive unbundling, which at the moment looks very unfortunate.

What Everybody Misinterprets About ESPN And Disney
http://seekingalpha.com/article/4053103-everybody-misinterprets-espn-disney

I agree of course that the market has changed, but it doesn't mean ESPN is dying. People will go on watching sports and loving them. ESPN surely must evolve: might multiple subscription-based streaming services, through which consumers can buy sports programs selectively based on personal preferences, be the right solution to its problems?

Cheers,

Gio
Title: Re: DIS - Disney
Post by: rogermunibond on March 09, 2017, 06:43:00 AM
It's hard for ESPN to replace the millions of cable subscribers paying $9 or 10/mo for $7 ESPN, $1 ESPN2, $0.66 SEC Network, $0.23 ESPNU, ESPN News, etc.  with 100Ks of subscribers paying $15-20 for specialized content say cricket, football, etc.

I do think that cord cutting does abate though.  The convenience of the cable bundle plus VOD plus a good navigation system.

Youtube TV or DirectTV Now are bundles too, mainly because bundle economics works. http://cdixon.org/2012/07/08/how-bundling-benefits-sellers-and-buyers/

There's a great quote from Jim Barksdale... “Gentlemen, there’s only two ways I know of to make money: bundling and unbundling.”

ESPN really overpaid for the MNF rights but thankfully that expires in 2022.  I still think NBA rights is probably a good deal in that millennial and Gen Z demos seem to like NBA product more than older demographics who got tired of the Iversons and Sprewells of the mid 90s NBA.

Title: Re: DIS - Disney
Post by: giofranchi on March 10, 2017, 03:00:12 AM
There's a great quote from Jim Barksdale... “Gentlemen, there’s only two ways I know of to make money: bundling and unbundling.”

+1
Great quote! ;)

Cheers,

Gio
Title: Re: DIS - Disney
Post by: giofranchi on March 18, 2017, 01:42:36 AM
Exclusive: Disney Iger on movies, parks, ESPN
https://www.google.it/amp/www.barrons.com/amp/articles/exclusive-disneys-iger-on-movies-parks-espn-1489744355

Cheers,

Gio
Title: Re: DIS - Disney
Post by: fareastwarriors on March 23, 2017, 02:03:16 PM
Disney's CEO Agrees to Contract Extension Running Until 2019

https://www.bloomberg.com/news/articles/2017-03-23/disney-s-iger-agrees-to-contract-extension-running-through-2019 (https://www.bloomberg.com/news/articles/2017-03-23/disney-s-iger-agrees-to-contract-extension-running-through-2019)
Title: Re: DIS - Disney
Post by: Phaceliacapital on March 24, 2017, 05:38:51 AM
+180000 employees and no successor :D
Title: Re: DIS - Disney
Post by: giofranchi on March 24, 2017, 05:43:26 AM
+180000 employees and no successor :D

Maybe, no WORTHY successor...

Cheers,

Gio
Title: Re: DIS - Disney
Post by: rogermunibond on March 24, 2017, 06:55:23 AM
I have a feeling that Iger engineered Staggs ouster.  We'll never know but for your consideration.

Oct 2014 - Iger signs contract through 2018

Feb 2015 - Staggs announced as COO (heir apparent, wins over Jay Rasulo)

Nov 2015 - Iger joins Carson Holdings NFL group (Chargers/Raiders stadium in Carson, CA)

Jan 2016 - NFL LA relocation committee recommends Carson group

Jan 2016 - NFL owners vote for Kroenke group (Rams/Chargers stadium in Inglewood, CA)

April 2016 - Staggs leaves Disney (not enough creative experience says Board)

March 2017 - Iger extends contract to 2019

Read the glowing piece here on Staggs and how he "won over" all their creative people.  One year later, he apparently doesn't have the creative chops.

https://www.nytimes.com/2015/04/26/business/media/thomas-staggs-disneys-heir-apparently.html

I'm not saying Iger didn't want to retire, but really he wanted to move into the NFL gig and when that fell through, it gave him and the board time to reconsider.

Title: Re: DIS - Disney
Post by: Phaceliacapital on March 24, 2017, 09:18:14 AM
Ok but then what's the point of extending only 1 year? That he can make a move into politics for the 2020 election?

And Gio, thank you for that clarification, very insightful  ::)
Title: Re: DIS - Disney
Post by: giofranchi on March 24, 2017, 09:41:37 AM
And Gio, thank you for that clarification, very insightful  ::)

Well, then I don't understand your own comment. If you already believed that among 180k people it might be hard to find a worthy successor, why making the comment?

And although it might be hard, it surely is possible: that's why one more year could be useful and enough.

Cheers,

Gio
Title: Re: DIS - Disney
Post by: fareastwarriors on March 30, 2017, 07:52:35 AM
ESPN Has Seen the Future of TV and They’re Not Really Into It


As more fans cut the cord and go mobile, the network is busy protecting its cable-TV money machine.


https://www.bloomberg.com/news/features/2017-03-30/espn-has-seen-the-future-of-tv-and-they-re-not-really-into-it (https://www.bloomberg.com/news/features/2017-03-30/espn-has-seen-the-future-of-tv-and-they-re-not-really-into-it)
Title: Re: DIS - Disney
Post by: fareastwarriors on November 06, 2017, 04:35:50 PM
Disney Explored Buying Fox Assets; Talks Now Dead

https://www.bloomberg.com/news/articles/2017-11-06/disney-looked-at-buying-most-of-fox-talks-now-dead-cnbc-says (https://www.bloomberg.com/news/articles/2017-11-06/disney-looked-at-buying-most-of-fox-talks-now-dead-cnbc-says)
Title: Re: DIS - Disney
Post by: fareastwarriors on December 11, 2017, 01:46:05 PM
Disney Is Making a Killing On Star Wars

Kathleen Kennedy has taken the studio George Lucas built to a galaxy far, far away.


https://www.bloomberg.com/news/features/2017-12-08/force-is-strong-in-disney-lucasfilm-5-years-after-star-wars-deal (https://www.bloomberg.com/news/features/2017-12-08/force-is-strong-in-disney-lucasfilm-5-years-after-star-wars-deal)
Title: Re: DIS - Disney
Post by: LC on December 11, 2017, 09:47:50 PM
In my mind, Disney is like Berkshire in a weird sense.... Home to all the story/characters that want to be appreciated.
Title: Re: DIS - Disney
Post by: mwtorock on December 12, 2017, 08:54:22 AM
DIS to Berkshire is like James Harden to Michael Jordan - very different ;)
Title: Re: DIS - Disney
Post by: augustabound on December 12, 2017, 09:12:39 AM
DIS to Berkshire is like James Harden to Michael Jordan - very different ;)
Disney has a badass beard?   ;D
Title: Re: DIS - Disney
Post by: CassiusKing1 on December 12, 2017, 09:46:59 AM
DIS to Berkshire is like James Harden to Michael Jordan - very different ;)
Disney has a badass beard?   ;D
And doesn't play defense?
Title: Re: DIS - Disney
Post by: DooDiligence on December 12, 2017, 10:16:52 AM
DIS to Berkshire is like James Harden to Michael Jordan - very different ;)
Disney has a badass beard?   ;D
And doesn't play defense?

Best defense = Great offense

This guy knew that:

https://en.wikipedia.org/wiki/Vince_McMahon

https://www.forbes.com/sites/kurtbadenhausen/2016/04/03/vince-mcmahon-is-a-billionaire-again-after-wwe-stock-run-up/#47ab38881714

Ultimately his OTT move did OK & WWE is still viable.
He didn't have world renowned theme parks.
Title: Re: DIS - Disney
Post by: LightWhale on December 12, 2017, 10:35:21 AM
A nice piece by Ben Thompson about DIS, FOX and Netflix:
https://stratechery.com/2017/disney-and-fox/
Title: Re: DIS - Disney
Post by: thefatbaboon on February 27, 2018, 12:20:06 AM
https://www.cmcsa.com/proposal-for-sky

Is this a bank shot effort to dislodge something else or does Comcast actually want Sky?  If they actually want Sky not sure I understand why.
Title: Re: DIS - Disney
Post by: ICUMD on February 27, 2018, 05:19:11 AM
I love Disney and have a small position in it.  I would like to increase my holdings of it.

What I can't get passed is the tremendous debt load it has, particularly after the Fox acquisition.  Anyone else share these concerns?  Or is it that their business is 'just that good' that a few blockbusters like the Black Panther will fix all that.
Title: Re: DIS - Disney
Post by: KCLarkin on February 27, 2018, 06:41:26 AM
What I can't get passed is the tremendous debt load it has, particularly after the Fox acquisition.  Anyone else share these concerns?  Or is it that their business is 'just that good' that a few blockbusters like the Black Panther will fix all that.

Moody's says debt will only be 3x EBITDA after the acquisition? Doesn't seem like a problem.
Title: Re: DIS - Disney
Post by: DooDiligence on March 09, 2018, 06:53:02 AM
We'll take it under advisement. Ha!

https://www.cnbc.com/2018/03/09/disney-shareholders-vote-against-ceo-igers-pay-package.html
Title: Re: DIS - Disney
Post by: Jurgis on March 09, 2018, 08:52:19 AM
I voted against, but then I vote against most pay packages.

OTOH, this is one of the situations where probably keeping Iger is worth a lot... maybe even 100M. Although I still would not vote "for".  8)
Title: Re: DIS - Disney
Post by: DooDiligence on April 28, 2018, 06:57:16 AM
Why does Disney care about this?

http://www.orlandosentinel.com/news/politics/political-pulse/os-gambling-special-session-deal-20180425-story.html
Title: Re: DIS - Disney
Post by: Spekulatius on April 28, 2018, 10:57:07 AM
Why does Disney care about this?

http://www.orlandosentinel.com/news/politics/political-pulse/os-gambling-special-session-deal-20180425-story.html

Where do you get that Disney cares about this?
Title: Re: DIS - Disney
Post by: DooDiligence on April 28, 2018, 08:15:55 PM
Why does Disney care about this?

http://www.orlandosentinel.com/news/politics/political-pulse/os-gambling-special-session-deal-20180425-story.html

Where do you get that Disney cares about this?

This part of the article,

"Part of that compact has expired, however, and the Tribe can legally stop paying the state. That led lawmakers to look at options to preserve the compact payments while expanding gambling in other areas, but the Tribe pledged to continue the payments earlier this month.

Also, a looming constitutional amendment on the November ballot helped push lawmakers to the negotiating table. Walt Disney Co. and the Tribe are supporting a measure that would place all future decisions to expand gambling in the state in the hands of the voters rather than the Legislature."

Does Disney have gambling interests?
If so, I was unaware.

--- edit ---

An interesting slant from 2013,

https://www.nytimes.com/2013/10/27/us/gambling-debate-entangles-disney-in-florida.html

-

It kind of seems like Disney wants to help the Tribe be THE powerhouse and limit overall gambling in the state, which I'd be OK with.
Title: Re: DIS - Disney
Post by: bizaro86 on April 29, 2018, 09:14:59 AM
Disney probably doesn't want competition for tourist dollars. Orlando would be a logical market for a destination casino, and they want the tourist dollars to come to them not a casino.

Although part of it must be a reputational/ethical thing, because their cruise ships don't have casinos, which is unprecedented in the industry, and a place where they don't face competition.
Title: Re: DIS - Disney
Post by: DooDiligence on April 29, 2018, 10:02:46 AM
Disney probably doesn't want competition for tourist dollars. Orlando would be a logical market for a destination casino, and they want the tourist dollars to come to them not a casino.

Although part of it must be a reputational/ethical thing, because their cruise ships don't have casinos, which is unprecedented in the industry, and a place where they don't face competition.

Ahhh! Now I get it.
They're not doing it for any kind of fairy tale morality malarkey.
Title: Re: DIS - Disney
Post by: SlowAppreciation on May 30, 2018, 06:39:54 AM
Some really good takes on Disney with regards to the Fox deal and future streaming service: https://redef.com/author/56d1e0f14f16158e36008235

Good follow on Twitter too
Title: Re: DIS - Disney
Post by: DooDiligence on September 16, 2018, 03:34:00 PM
https://www.hollywoodreporter.com/news/how-disney-s-streaming-service-will-work-guest-column-1141660
Title: Re: DIS - Disney
Post by: LC on March 08, 2019, 10:58:44 AM
New Drone Footage from Star Wars: Galaxy's Edge

https://v.redd.it/tp899bh1nvk21/DASH_720
Title: Re: DIS - Disney
Post by: rogermunibond on March 08, 2019, 11:19:01 AM
I like how the poster threw a copyright Disney on the footage, so that when they come after him they can't accuse him of IP theft. ;)
Title: Re: DIS - Disney
Post by: Jurgis on March 08, 2019, 11:24:07 AM
New Drone Footage from Star Wars: Galaxy's Edge

https://v.redd.it/tp899bh1nvk21/DASH_720

I'd go to see that if I could pay 2x and have 1/5x of the crowds...  ::)


(Based on published articles DIS has not disclosed yet how they gonna control traffic. Most expected solutions are not what I'm asking for.)
Title: Re: DIS - Disney
Post by: SHDL on March 08, 2019, 11:42:53 AM
how they gonna control traffic

By offending a big chunk of their fan base with Ep. 8.   ;)
Title: Re: DIS - Disney
Post by: Jurgis on March 08, 2019, 12:20:32 PM
how they gonna control traffic

By offending a big chunk of their fan base with Ep. 8.   ;)

They've been doing that since Ep. 1. and the crowds are not thinning.  ::) ;)
Title: Re: DIS - Disney
Post by: rogermunibond on March 08, 2019, 12:26:53 PM

They've been doing that since Ep. 1. and the crowds are not thinning.  ::) ;)

In fact the prequelists are making a strong comeback.  So many younger SW fans grew up with the prequels that the overall fandom has lost much of it's hate for the prequels.
Title: Re: DIS - Disney
Post by: Jurgis on March 08, 2019, 12:38:58 PM

They've been doing that since Ep. 1. and the crowds are not thinning.  ::) ;)

In fact the prequelists are making a strong comeback.  So many younger SW fans grew up with the prequels that the overall fandom has lost much of it's hate for the prequels.

Strong is the power of the dark side.  ::)
Title: Re: DIS - Disney
Post by: SHDL on March 08, 2019, 12:49:13 PM
On the prequels, there was a fan video on YouTube that talked about why they’re “secretly brilliant,” which I agree with.  To me Ep. 8 was interesting in part because of how it subtly doubled down on that theme. 
Title: Re: DIS - Disney
Post by: LC on March 08, 2019, 12:59:10 PM

They've been doing that since Ep. 1. and the crowds are not thinning.  ::) ;)

In fact the prequelists are making a strong comeback.  So many younger SW fans grew up with the prequels that the overall fandom has lost much of it's hate for the prequels.

Yes this is such an interesting phenomenon (from someone who grew up with the originals) - but hey, childhood movies are a great thing so I won't judge!
Title: Re: DIS - Disney
Post by: bizaro86 on March 08, 2019, 03:12:26 PM
New Drone Footage from Star Wars: Galaxy's Edge

https://v.redd.it/tp899bh1nvk21/DASH_720

I'd go to see that if I could pay 2x and have 1/5x of the crowds...  ::)


(Based on published articles DIS has not disclosed yet how they gonna control traffic. Most expected solutions are not what I'm asking for.)

That doesn't seem like a good value proposition for DIS to me... if people were willing to pay 10x the price for 1/5th the crowds that would be potentially interesting.

There are a few options to trade cash for access - the "private tours" include front of the line access, for example.
Title: Re: DIS - Disney
Post by: Jurgis on March 08, 2019, 04:13:17 PM
New Drone Footage from Star Wars: Galaxy's Edge

https://v.redd.it/tp899bh1nvk21/DASH_720

I'd go to see that if I could pay 2x and have 1/5x of the crowds...  ::)


(Based on published articles DIS has not disclosed yet how they gonna control traffic. Most expected solutions are not what I'm asking for.)

That doesn't seem like a good value proposition for DIS to me... if people were willing to pay 10x the price for 1/5th the crowds that would be potentially interesting.

I am looking for good value proposition for me, not for DIS.  ;D

Quote
There are a few options to trade cash for access - the "private tours" include front of the line access, for example.

Yes. Front of line access does not eliminate the crowds.
Title: Re: DIS - Disney
Post by: DooDiligence on March 08, 2019, 05:55:06 PM
how they gonna control traffic

By offending a big chunk of their fan base with Ep. 8.   ;)

Why doesn't SMF's text editor have a "laughing while crying" emoji?
Title: Re: DIS - Disney
Post by: bizaro86 on March 09, 2019, 07:52:51 AM
LOL - nice! Maybe try disneyland Paris in the winter?

You're right that front of the line access doesn't eliminate crowds, just waits. For lower crowd options, you can stay in a Disney owned hotel and get an extra hour early access. Crowds are lower then. Another option is to attend one of the separate ticket parties. (Mickeys not-so-scary Halloween party). While the hoards are lined up for the special stuff associated with the event, the "regular" park experience is very empty.

Naturally these options all include extra payments of various kinds to DIS.

My other suggestion would be to go to DL in early May this year. With Star Wars coming shortly after a seasonally slow time is likely to be even slower. I went to DL 3 weeks before Cars land opened - it was great.
Title: Re: DIS - Disney
Post by: Jurgis on March 09, 2019, 09:59:40 PM
LOL - nice! Maybe try disneyland Paris in the winter?

You're right that front of the line access doesn't eliminate crowds, just waits. For lower crowd options, you can stay in a Disney owned hotel and get an extra hour early access. Crowds are lower then. Another option is to attend one of the separate ticket parties. (Mickeys not-so-scary Halloween party). While the hoards are lined up for the special stuff associated with the event, the "regular" park experience is very empty.

Naturally these options all include extra payments of various kinds to DIS.

My other suggestion would be to go to DL in early May this year. With Star Wars coming shortly after a seasonally slow time is likely to be even slower. I went to DL 3 weeks before Cars land opened - it was great.

Thanks for suggestions, I'll keep them in mind. Although I was talking about Star Wars: Galaxy's Edge in specific, so some of the suggestions won't work.  8)
Title: Re: DIS - Disney
Post by: Liberty on March 20, 2019, 04:38:22 PM
https://redef.com/original/nine-reasons-why-disney-will-succeed-and-why-four-criticisms-are-overhyped
Title: Re: DIS - Disney
Post by: Sportgamma on March 20, 2019, 05:46:09 PM
https://redef.com/original/nine-reasons-why-disney-will-succeed-and-why-four-criticisms-are-overhyped

What a great read.
Title: Re: DIS - Disney
Post by: Spekulatius on March 20, 2019, 05:51:19 PM
Good timing. I added a few shares today and I am likely to add more on weakness. I think they will pull something off going directly to the customer, as they have multiple vectors to do so - via streaming  presence and physical properties (parks). I think at the very least, they can create an HBO like business going the direct route. I don’t think they will be able to beat Netflix in subscriber growth, nor do they have to. The market assigns high multiples to a subscription business, which I think Disney strives to become, rather than being transaction driven.
Title: Re: DIS - Disney
Post by: DooDiligence on March 20, 2019, 06:45:44 PM
20 years from now I expect to still own Disney, Berkshire, Edwards & Novo.
Title: Re: DIS - Disney
Post by: thowed on March 21, 2019, 04:44:14 AM
Thanks for the read.  V interesting.

I like Disney a lot, and especially Iger.

Without knowing his successor, I worry a bit about the next era, as iconic bosses are often hard to follow and can lead to share price droops.

I also think one has to remember that it is not a given that Disney will always be 'loved'.  If you look back to the 80s, Disney was looking pretty tired.

Just because everyone loves Marvel and Star Wars now, that won't necessarily  - the next generation of children may want to differentiate themselves, and have their own 'Universe'.  They may think that something like Star Wars - which both their parents AND grandparents like - is pretty lame.

As I say, I really like the company, but I want to always think about the possible dangers, especially if they're not priced in.
Title: Re: DIS - Disney
Post by: Spekulatius on March 21, 2019, 05:23:24 AM
Disney is going to have to reinvent themselves every generation and I expect the same will be true in the future. Right now, they are going through a transformation, but they do proactively  and from a position of strength.
Back in the 80‘s, Disney was an asset play, based on the value of the replacement value of their theme parks.
Title: Re: DIS - Disney
Post by: rogermunibond on March 21, 2019, 07:07:49 AM
The parts about upcross-selling and LTV capture are interesting.  Disney has had DisneyLife in UK and Ireland for some years now.  Basically a subscription service for kids/families - it's never gotten huge but been a useful test ground for OTT.  I'm sure that Disney has some interesting data on UK and Ireland parks visitation from DisneyLife subs, consumer product purchases, marketing for movies etc.  It's possible the D+ will allow for wholesale upcross selling.

I often feel the ultimate upcross-sell for Disney would be to allow people to live in their parks.  Imagine, being a resident of Galaxies Edge, what would someone pay for a two week stay in the park, in that milieu.

Alternatively, if Matt Ball's metaverse thesis for Fortnite is right.  Then AR/VR in a Disney simulation.
Title: Re: DIS - Disney
Post by: Jurgis on March 21, 2019, 12:30:31 PM
People praise Iger, but the last 10 year revenue growth is only 6% annualized. This is starting in 2009 pretty much at the bottom. Even hated companies like DISCA/AMCX have higher revenue growth (13% annualized or so). OK, maybe I should look at 2007 to now just to see top-to-top numbers. But still DIS growth is very subpar for a company that has huge brand and tailwinds for most of the last 10 years. Maybe this explains why they had to buy Pixar/Lucas/Marvel/etc. Even with these purchases, growth is still meh.
Title: Re: DIS - Disney
Post by: villainx on March 21, 2019, 12:38:07 PM
People praise Iger, but the last 10 year revenue growth is only 6% annualized. This is starting in 2009 pretty much at the bottom. Even hated companies like DISCA/AMCX have higher revenue growth (13% annualized or so). OK, maybe I should look at 2007 to now just to see top-to-top numbers. But still DIS growth is very subpar for a company that has huge brand and tailwinds for most of the last 10 years. Maybe this explains why they had to buy Pixar/Lucas/Marvel/etc. Even with these purchases, growth is still meh.

Off memory, the main problem had been tv/cable/ESPN/etc., any plus was weighed against a subscriber loss negative.  So ... I don't think things have been clearer since these many years, there's potential, but it hasn't been solved. 

So, you are right, but they things that have been going well, have - I assumed - gone even better, the things that have been a concern, hasn't been proven to be addressed.
Title: Re: DIS - Disney
Post by: Jurgis on March 21, 2019, 12:42:25 PM
People praise Iger, but the last 10 year revenue growth is only 6% annualized. This is starting in 2009 pretty much at the bottom. Even hated companies like DISCA/AMCX have higher revenue growth (13% annualized or so). OK, maybe I should look at 2007 to now just to see top-to-top numbers. But still DIS growth is very subpar for a company that has huge brand and tailwinds for most of the last 10 years. Maybe this explains why they had to buy Pixar/Lucas/Marvel/etc. Even with these purchases, growth is still meh.

Off memory, the main problem had been tv/cable/ESPN/etc., any plus was weighed against a subscriber loss negative.  So ... I don't think things have been clearer since these many years, there's potential, but it hasn't been solved. 

So, you are right, but they things that have been going well, have - I assumed - gone even better, the things that have been a concern, hasn't been proven to be addressed.

Just to note, I compared to DISCA/AMCX because these should have more problems than DIS with cord-cutting/sub losses...
Title: Re: DIS - Disney
Post by: LC on March 21, 2019, 12:42:47 PM
I think they had problems on the transition of media consumption:

-ESPN has very much under-performed as people move away from sports TV. All the major sports networks offer subscription services, and online viewership is growing. IMHO this was a bad purchase.

-Similarly they have not been able to leverage their assets as effectively via TV broadcasting, again as consumers move from TV to streaming subscriptions.

I think their Disney+ service will probably need to be financially supported for a year or so (akin to Hulu's launch). But I think on the balance of probabilities, it will be the way forward for DIS.

All in all, they are great content producers but have been slow to keep pace with distribution changes. I will probably pick up some shares today on weakness as Spek mentioned.
Title: Re: DIS - Disney
Post by: Liberty on March 21, 2019, 12:44:04 PM
People praise Iger, but the last 10 year revenue growth is only 6% annualized. This is starting in 2009 pretty much at the bottom. Even hated companies like DISCA/AMCX have higher revenue growth (13% annualized or so). OK, maybe I should look at 2007 to now just to see top-to-top numbers. But still DIS growth is very subpar for a company that has huge brand and tailwinds for most of the last 10 years. Maybe this explains why they had to buy Pixar/Lucas/Marvel/etc. Even with these purchases, growth is still meh.

A megacap growing revenues at 2-3x GDP isn't bad. EPS seems to have been growing at mid-double-digits during the period, and they're well positioned for future growth with a large moat, great ROE and ROIC. They're well positioned for long-term future growth.

It's more a case of high terminal value and predictability. Just a different risk-benefit profile than some of the other things you're looking at, probably.
Title: Re: DIS - Disney
Post by: Jurgis on March 21, 2019, 12:53:27 PM
People praise Iger, but the last 10 year revenue growth is only 6% annualized. This is starting in 2009 pretty much at the bottom. Even hated companies like DISCA/AMCX have higher revenue growth (13% annualized or so). OK, maybe I should look at 2007 to now just to see top-to-top numbers. But still DIS growth is very subpar for a company that has huge brand and tailwinds for most of the last 10 years. Maybe this explains why they had to buy Pixar/Lucas/Marvel/etc. Even with these purchases, growth is still meh.

A megacap growing revenues at 2-3x GDP isn't bad. EPS seems to have been growing at mid-double-digits during the period, and they're well positioned for future growth with a large moat, great ROE and ROIC. They're well positioned for long-term future growth.

It's more a case of high terminal value and predictability. Just a different risk-benefit profile than some of the other things you're looking at, probably.

Berkshire managed to grow 8% annualized. And that's the ez pick.

How about CMCSA? 12%.
Title: Re: DIS - Disney
Post by: LC on March 21, 2019, 01:22:45 PM
To be fair, Disney managed to double net margins from 2011-2018, from ~11% to ~21%.

Comcast went from 9% to 12% over the same timeframe.

I'd take that as a sign that while management admittedly failed on the top line (namely ESPN and the factors I mentioned above), they did good work on the bottom line.
Title: Re: DIS - Disney
Post by: KCLarkin on March 21, 2019, 01:32:10 PM
Berkshire managed to grow 8% annualized.

Disney total returns were significantly better than BRK over that period. BRK retains 100% of earnings, so it should grow faster than a company that is paying a dividend and buying back shares.

According to Valueline, DIS per share growth was:
Rev 7%
Earnings 12.5%
Dividends 17.5%

Add in the dividend and you got a very nice return from a blue chip stock. Iger might not deserve the praise, but Disney sure does.

--
Revenue growth isn't a great metric to evaluate management anyway. Many great managers unlock value by shrinking business. Many great managers destroy value by growing their businesses.
Title: Re: DIS - Disney
Post by: Jurgis on March 21, 2019, 02:22:06 PM
Many great managers unlock value by shrinking business.

There are maybe couple people who did that, but mostly this is just an excuse for either crappy management or crappy business or both.

I agree that revenue growth is not everything, but low/zero revenue growth and squeezing margins is also at least yellow flag for me.
Title: Re: DIS - Disney
Post by: bizaro86 on March 21, 2019, 03:03:31 PM
:

-ESPN has very much under-performed as people move away from sports TV. All the major sports networks offer subscription services, and online viewership is growing. IMHO this was a bad purchase.



I disagree pretty strongly on ESPN being a bad purchase. They paid $19 B for cap cities in 1996. After multiple years of decline, operating income from the media networks segment (which is almost all stuff they got with cap cities, biggest items are ESPN and ABC) was $6.6 billion in 2018.

They've reinvested the ESPN tsunami of cash into buying Marvel/Lucasfilm, and new parks, hotels, and cruise ships. The fact that it's declining now doesn't make it a bad purchase 23 years ago. I suspect (but haven't verified) that even if espn went to zero tomorrow the IRR on that acquisition would look pretty good.
Title: Re: DIS - Disney
Post by: Spekulatius on March 21, 2019, 03:28:59 PM
6% revenue growth, from a base  that wasn’t depressed  in 2008 isn’t too bad. revenue growth / share was even better since they bought back a considerable amount of stock ((~20%+ of outstanding, but I could be off).
Both AMCX and DISCA had untapped pricing power in 2008 that made it easy to grow for a couple of years until this fizzled out in or around 2013. DIS flatlined (or worse) since 2015, but they did grow earnings since then. DISCA bought a lot of revenue with Scripps (which was dilutive) and Eurosport and another foreign TV station. DIS bought Marvel, Lucasfilm and now the Twenty century studio. I believe they are better positioned than DISCA and AMCX, but the latter could pot. be purchased by a larger player.

I think DIS can be compared to BRK in a roundabout way ,as they have become the go to home for premier entertainment property/ IP, while BRK is a permanent home for any private company where the owner compares about the LT prosperity more so than the sales price.
Title: Re: DIS - Disney
Post by: DooDiligence on March 21, 2019, 03:38:02 PM
:

-ESPN has very much under-performed as people move away from sports TV. All the major sports networks offer subscription services, and online viewership is growing. IMHO this was a bad purchase.



I disagree pretty strongly on ESPN being a bad purchase. They paid $19 B for cap cities in 1996. After multiple years of decline, operating income from the media networks segment (which is almost all stuff they got with cap cities, biggest items are ESPN and ABC) was $6.6 billion in 2018.

They've reinvested the ESPN tsunami of cash into buying Marvel/Lucasfilm, and new parks, hotels, and cruise ships. The fact that it's declining now doesn't make it a bad purchase 23 years ago. I suspect (but haven't verified) that even if espn went to zero tomorrow the IRR on that acquisition would look pretty good.

Disney is like a giant money triangle.
Title: Re: DIS - Disney
Post by: LC on March 21, 2019, 03:44:48 PM
:

-ESPN has very much under-performed as people move away from sports TV. All the major sports networks offer subscription services, and online viewership is growing. IMHO this was a bad purchase.



I disagree pretty strongly on ESPN being a bad purchase.

You are right and I take it back - I was unclear. It was a very good purchase for reasons over the history of Disney ownership, for reasons you mention. My (very admittedly unclear) meaning was it is not the cash cow it was 10 years ago.
Title: Re: DIS - Disney
Post by: rogermunibond on March 21, 2019, 07:10:39 PM
LC - glad you clarified on ESPN.  If anything the biggest error was not buying out Hearst's 20% stake in ESPN any years ago. Back when Buffett was on the ABC/Cap Cities board and voted against it.

2010 marked the downturn in ESPN subs from 100M and at the same time under John Skipper, ESPN committed big capital investments in NFL and NBA program rights.

It's still a cash cow, just not the growth machine it was in the previous 20 years.

Iger has turned Studio and Parks into growth engines now through smart capital allocation in Pixar, Marvel, and Lucasfilm and Disney Shangai, US parks refresh, and Disney cruise. He's done a fantastic job.
Title: Re: DIS - Disney
Post by: LC on March 21, 2019, 11:36:07 PM
https://www.ign.com/articles/2019/03/21/fox-layoffs-begin-following-disney-merger-4000-jobs-expected-to-be-cut
Title: Re: DIS - Disney
Post by: Spekulatius on March 22, 2019, 03:57:56 AM
https://www.ign.com/articles/2019/03/21/fox-layoffs-begin-following-disney-merger-4000-jobs-expected-to-be-cut

Probably no surprise.

When I started working in the US after about 2 years, I went through a merger where the company I worked for was acquired, and my first boss explained me how this works for employees:

“We work for a whorehouse that just got sold to the highest bidder. The only certainty is that we get screwed.”

He is a wise man.
Title: Re: DIS - Disney
Post by: DCG on March 22, 2019, 06:16:18 AM
Not sure ESPN was a bad purchase, but I feel like Disney is ruining ESPN and has turned it into a sports version of BuzzFeed.
Title: Re: DIS - Disney
Post by: Liberty on March 22, 2019, 06:23:46 AM
From the little that I know of it, ESPN seems like one of the best purchases ever. It was thrown in as an after-thought in previous deals with Capital Cities/ABC, and grew into one of the biggest media franchises in the world. It's facing headwinds now because it made a lot from being bundled, but it's probably still a thousand-bagger and can still be a cash cow for a while longer even if it declines.
Title: Re: DIS - Disney
Post by: rogermunibond on March 22, 2019, 07:19:56 AM
In the latest 10-K DIS reported 86M ESPN subs.  From 2010 100M ESPN subs.  In 17 and 18 they had stabilized somewhat at 88M with MVPDs but as those promotional rates fall off ESPN subs are dropping again.

OTOH ESPN+ is doing all the right things - going after niche UFC, Serie A, Championship English soccer, etc.  They will probably try to bid for online EPL or LaLiga and take that from BEIN or NBC.
Title: Re: DIS - Disney
Post by: DooDiligence on March 22, 2019, 07:38:40 AM
In the latest 10-K DIS reported 86M ESPN subs.  From 2010 100M ESPN subs.  In 17 and 18 they had stabilized somewhat at 88M with MVPDs but as those promotional rates fall off ESPN subs are dropping again.

OTOH ESPN+ is doing all the right things - going after niche UFC, Serie A, Championship English soccer, etc.  They will probably try to bid for online EPL or LaLiga and take that from BEIN or NBC.

More Footy, yay!
Title: Re: DIS - Disney
Post by: bizaro86 on March 22, 2019, 07:58:46 AM
I don't see the business model for ESPN+

Because sports rights are regional, they only really have a US business with their IP. ESPN peaked around 100 MM subs. Even if you assume (generously, imo) that a quarter of those people are very interested in sports and will buy espn plus, I get the following math.

25 MM × 12 months × $5/month = $1.5 billion in revenue per year.

They're paying $300MM/year for rights just to UFC. That doesn't include producing and distributing UFC, or any of their other costs (other sports, credit card fees, running the app, etc).

Disney+ is different, because the market is worldwide and they (eventually) own those rights for all their content.

I actually think they'd be better off bundling all their other content together. Include abc/fox together with disney/star wars/marvel/discovery and you have something for everyone.

The target market for streaming 15 seasons of greys anatomy is different than that for disney junior, but together with their tent pole ip that's a Netflix killer.
Title: Re: DIS - Disney
Post by: rogermunibond on March 22, 2019, 09:54:31 AM
I agree that it's hard to see how ESPN+ works.  But ESPN has to have an OTT in the event that they lose too many cable subs and to compete for OTT sports subs against Dazn, Fubo, B/R Live etc.

There are a few sports rights that are global in nature. NBA and football (soccer) specifically Premier League, La Liga, and Champions League.  UFC and MMA are somewhat global as well like boxing.  Maybe cricket?


Title: Re: DIS - Disney
Post by: estoybien on April 12, 2019, 08:14:11 AM
I'm not an ESPN+ or Hulu subscriber, but I'll def get Disney+ (I have kids), and I might be willing to top-up to a Disney+/Hulu/ESPN+ package depending on the pricing. I don't even know what ESPN is like anymore, it's been so long.

re ESPN, is ESPN+ more for actual sports watching, or do ppl also watch SportsCenter and other talking-heads/highlights shows on it just like they did on the cable network? Seems like ESPN in its heyday was very sticky, I had friends who'd just have it on for hours.
Title: Re: DIS - Disney
Post by: CorpRaider on April 12, 2019, 10:44:45 AM
Doesn't ESPN+ just have like a ancillary things that aren't on one of the ESPN networks?  The disney+ name is confusing/suboptimal to me, coming from that perspective. 
Title: Re: DIS - Disney
Post by: rogermunibond on April 12, 2019, 10:45:39 AM
DisPlus setting a stake at $7/mo or $70/year makes it nearly impossible for Netflix to raise prices again, IMO.

So now, consider that if we enter a recession in the next 3-4 years, Netflix will still be needing to borrow for its content spend and refinance existing debt at higher rates as the bond markets tighten up.  Given that, should the Ebitda multiple on Netflix be a little lower than 300+?
Title: Re: DIS - Disney
Post by: rogermunibond on April 12, 2019, 10:51:22 AM
As if Disney Plus investor day wasn't enough.  The Star Wars IX teaser trailer dropped today at SW Celebration.

Holy crap!
Title: Re: DIS - Disney
Post by: Jurgis on April 12, 2019, 11:02:26 AM
DisPlus setting a stake at $7/mo or $70/year makes it nearly impossible for Netflix to raise prices again, IMO.

Tell that to my wife.  8)

Netflix is not gonna be cancelled even if it goes to $20 per month.
We likely won't sub DisPlus even at $7 per month.

Opinions may change at any time and all that.
Title: Re: DIS - Disney
Post by: rogermunibond on April 12, 2019, 11:14:18 AM
Jurgis - how does NFLX price differentiate your household from the marginal household?  In NA, there are about 20-30M household that have cable and NFLX.  And then about 30M households that are BB only with NFLX.

Title: Re: DIS - Disney
Post by: PatientCheetah on April 12, 2019, 11:21:29 AM
As an adult, I do not want to watch PG rated shows all the time. Can't live with DisneyPlus solo.
Title: Re: DIS - Disney
Post by: Jurgis on April 12, 2019, 11:27:54 AM
Jurgis - how does NFLX price differentiate your household from the marginal household?  In NA, there are about 20-30M household that have cable and NFLX.  And then about 30M households that are BB only with NFLX.

I don't know how our situation compares to others.
We don't have cable.
We have NFLX streaming, Amazon Prime and NFLX DVD service for new/not-available-on-streaming movies. I was for cancelling NFLX streaming, but was overruled.  8) However, if Amazon Prime starts showing more ads, I might change my mind and become pro-NFLX again.  8)

Things may change a lot if/when NFLX DVD service shuts down. I'll have to think then how to get new/not-available-on-streaming movies. I think DVD service will be closed within 5 years.

Edit: DIS movies were all on NFLX based on their agreement with NFLX. Once they are not on NFLX, I might get them through NFLX DVD service. I get some HBO content through DVD service. So DVD service is somewhat key factor in my decisions to subscribe or not subscribe to anything else.
Title: Re: DIS - Disney
Post by: rkbabang on April 12, 2019, 11:57:20 AM
DisPlus setting a stake at $7/mo or $70/year makes it nearly impossible for Netflix to raise prices again, IMO.

Tell that to my wife.  8)

Netflix is not gonna be cancelled even if it goes to $20 per month.
We likely won't sub DisPlus even at $7 per month.

Opinions may change at any time and all that.

Same here.  We just cancelled YouTubeTV which was raising its price to $50/month and got us thinking that we never even watch it.  All we really watch in our house is Netflix, Amazon Prime, and regular youTube.   Netflix is way under-priced IMHO.  We wouldn't cancel it if it was $40/month. (I hope Reed Hastings doesn't read this).


Title: Re: DIS - Disney
Post by: DooDiligence on April 12, 2019, 12:13:59 PM
Doesn't ESPN+ just have like a ancillary things that aren't on one of the ESPN networks?  The disney+ name is confusing/suboptimal to me, coming from that perspective.

I think Disney + means pay more than the base sub rate & get more  ;)

Sports packages & PPV should drive add-on sales?

MMA is like $5 a month extra & that alone should be worth a ton of subs.

Premier League, La Liga & Bundesliga, hooty hoo!

Cricket, why not?

Big market for that & football (and I do mean real football where they don't touch the ball with their hands.)
Title: Re: DIS - Disney
Post by: Spekulatius on April 12, 2019, 04:16:59 PM
The investor day presentation is very well made. Now we have
Disney+ for kids and teens (animations, Star wars, superhero’s , documentaries )
Hulu - regular streaming TV, competing with Netflix
ESPN+ streaming for sports fans.

Looks like investors may be good for another 20 years if this works out.
Title: Re: DIS - Disney
Post by: glorysk87 on April 12, 2019, 09:04:11 PM
Anyone else think the sub targets are aggressive? 60-90mm by the end of FY2024 when NFLX is at 60mm US subs today.

Not particularly. Guidance implies 20 to 30m subscribers in the US by 2024. Doesn't seem aggressive at all tbh.
Title: Re: DIS - Disney
Post by: rkbabang on April 15, 2019, 07:07:17 AM
The investor day presentation is very well made. Now we have
Disney+ for kids and teens (animations, Star wars, superhero’s , documentaries )
Hulu - regular streaming TV, competing with Netflix
ESPN+ streaming for sports fans.

Looks like investors may be good for another 20 years if this works out.


I do like how they are separating things like that.  In the old days of cable, and even these new live TV streaming services like Hulu live TV, youTubeTV, playstation vue, directv now, etc, you have to pay for sports even if you never watch them.  This way you can pay for only what you intend to watch.  Separating things into sports, children's programming, and everything else.  It isn't completely pay per view, but it isn't everything all bundled together and you pay for it all whether you want it or not.  I think this might be a winning move.
Title: Re: DIS - Disney
Post by: rogermunibond on April 15, 2019, 08:20:52 AM
Anyone else think the sub targets are aggressive? 60-90mm by the end of FY2024 when NFLX is at 60mm US subs today.

Not particularly. Guidance implies 20 to 30m subscribers in the US by 2024. Doesn't seem aggressive at all tbh.

Yeah they said 1/3 NA and 2/3 international.  Actually think the sub estimate could be lowballing.
Title: Re: DIS - Disney
Post by: Liberty on April 15, 2019, 09:21:48 AM
https://stratechery.com/2019/disney-and-the-future-of-tv/
Title: Re: DIS - Disney
Post by: rogermunibond on April 15, 2019, 09:36:31 AM
Interesting adjustment of his aggregation thesis.  I don't really see Netflix as pure aggregator anymore.  Not in the same sense as Google, FB, or even Youtube.

When so much of Netflix content is self-produced originals the melding of the supplier/aggregator roles is pretty extreme.
Title: Re: DIS - Disney
Post by: Jurgis on April 15, 2019, 09:37:49 AM
I've read about the Disney+/Hulu segmentation and for me that is pure milking of customers. (No, I'm not a Disney fan coming into this.). And while I wanted to cancel Netflix, I see Netflix as being the most customer friendly of all media companies. They don't try to segment me and milk me for extra dollars to see all the content they have. Disney wants to force me to sub Disney+ for Marvel/StarWars/kiddie stuff and Hulu for every other movie. This sucks on two levels: I don't give a crap about kiddie stuff, so on one side they are segmenting too little and on the other side they are segmenting too much. So personally I'm likely not gonna subscribe to either.

But then a lot of other people will likely sub to Disney+... Hulu is less likely.

Edit: I'm might ask Sanjeev to change my name tag to "Grumpy Investor".  8)
Title: Re: DIS - Disney
Post by: glorysk87 on April 15, 2019, 11:49:34 AM
I've read about the Disney+/Hulu segmentation and for me that is pure milking of customers. (No, I'm not a Disney fan coming into this.). And while I wanted to cancel Netflix, I see Netflix as being the most customer friendly of all media companies. They don't try to segment me and milk me for extra dollars to see all the content they have. Disney wants to force me to sub Disney+ for Marvel/StarWars/kiddie stuff and Hulu for every other movie. This sucks on two levels: I don't give a crap about kiddie stuff, so on one side they are segmenting too little and on the other side they are segmenting too much. So personally I'm likely not gonna subscribe to either.

But then a lot of other people will likely sub to Disney+... Hulu is less likely.

Edit: I'm might ask Sanjeev to change my name tag to "Grumpy Investor".  8)

Haha - man, no one is ever happy.

Over the past few years, the common complaint was that bundling was an awful experience because it forced the consumer to pay for stuff they didn't want to watch in order to have access to stuff they did want to watch.

So companies have moved more towards a segmented product offering - multiple different services that you can subscribe to separately. If you want kids stuff, just sub to the kids service. If you want other stuff, pay for Hulu.

Yet now people like our friend Jurgis here are complaining that they have to pay for things separately.

Grumpy investor indeed.
Title: Re: DIS - Disney
Post by: Jurgis on April 15, 2019, 11:55:09 AM
If you want kids stuff, just sub to the kids service. If you want other stuff, pay for Hulu.

Except that Marvel/Star Wars are not kids stuff.
Title: Re: DIS - Disney
Post by: rogermunibond on April 15, 2019, 12:22:39 PM
Jurgis - was never going to happen since DIS only owns 60% of Hulu.  It would be compelling as an offering and from a UI perspective though.
Title: Re: DIS - Disney
Post by: rkbabang on April 15, 2019, 12:58:48 PM
If you want kids stuff, just sub to the kids service. If you want other stuff, pay for Hulu.

Except that Marvel/Star Wars are not kids stuff.

But how many times can you watch the same movies?   Disney+ looks like the type of thing you subscribe to for a month 1-2 times per year to watch a certain thing then unsubscribe.  Unless you have kids.

Title: Re: DIS - Disney
Post by: Spekulatius on April 15, 2019, 01:08:36 PM
If you want kids stuff, just sub to the kids service. If you want other stuff, pay for Hulu.

Except that Marvel/Star Wars are not kids stuff.

But how many times can you watch the same movies?   Disney+ looks like the type of thing you subscribe to for a month 1-2 times per year to watch a certain thing then unsubscribe.  Unless you have kids.

Exactly. The greatest thing about the streaming services is that they are so easy to cancel.
Title: Re: DIS - Disney
Post by: glorysk87 on April 15, 2019, 01:09:14 PM
If you want kids stuff, just sub to the kids service. If you want other stuff, pay for Hulu.

Except that Marvel/Star Wars are not kids stuff.

WHOOSH - missed the point entirely
Title: Re: DIS - Disney
Post by: rogermunibond on April 15, 2019, 01:43:16 PM
https://secondmeasure.com/datapoints/game-of-thrones-premiere-spikes-hbo-now-signups/

Not sure where the data comes from.  Maybe survey.  But OTT churn is pretty real.  Whether marketing CAC gets re-spent would be a concern.  To returning subs use new email addresses and qualify for promotional dollars?
Title: Re: DIS - Disney
Post by: estoybien on April 15, 2019, 02:26:06 PM
If you want kids stuff, just sub to the kids service. If you want other stuff, pay for Hulu.

Except that Marvel/Star Wars are not kids stuff.

At least having to buy A&B to get A is better than having to buy A,B,C,D,E,F,G,H,etc to get A...

As for my fam, we a) would stay subscribed to Netflix if it were substantially more expensive, b) will subscribe to Disney+ but price sensitive bc it's a limited universe of content and kids are getting older, c) *might* get a bundle Disney+/Hulu/ESPN+ but not for much more, d) would keep Amazon Prime if it were substantially more expensive, but don't really watch Amazon Prime Video at all. (Wrong thread, but I think Amazon Prime Video really needs a rebranding.)
Title: Re: DIS - Disney
Post by: Liberty on April 15, 2019, 03:33:55 PM
Interesting adjustment of his aggregation thesis.  I don't really see Netflix as pure aggregator anymore.  Not in the same sense as Google, FB, or even Youtube.

When so much of Netflix content is self-produced originals the melding of the supplier/aggregator roles is pretty extreme.

Why do you think self-producing content is opposed to the idea of being an aggregator? I don't think it is.

It's because they can aggregate so much demand that it makes sense for them to self-produce (can spread fixed costs over a larger base).
Title: Re: DIS - Disney
Post by: bizaro86 on April 15, 2019, 07:50:11 PM
Interesting adjustment of his aggregation thesis.  I don't really see Netflix as pure aggregator anymore.  Not in the same sense as Google, FB, or even Youtube.

When so much of Netflix content is self-produced originals the melding of the supplier/aggregator roles is pretty extreme.

Why do you think self-producing content is opposed to the idea of being an aggregator? I don't think it is.

It's because they can aggregate so much demand that it makes sense for them to self-produce (can spread fixed costs over a larger base).

There is some game theory here as well - by having their own in house content production they have more credibility in negotiations for content. Without that, they would be very much beholden to the big studios, even more than they already are.
Title: Re: DIS - Disney
Post by: Spekulatius on April 15, 2019, 08:15:33 PM
Interesting adjustment of his aggregation thesis.  I don't really see Netflix as pure aggregator anymore.  Not in the same sense as Google, FB, or even Youtube.

When so much of Netflix content is self-produced originals the melding of the supplier/aggregator roles is pretty extreme.

Why do you think self-producing content is opposed to the idea of being an aggregator? I don't think it is.

It's because they can aggregate so much demand that it makes sense for them to self-produce (can spread fixed costs over a larger base).

They also get pretty good and fast feedback on what viewers watch. That alone is giving them and edge to produce the right content, imo.
Title: Re: DIS - Disney
Post by: Jurgis on April 16, 2019, 12:22:00 AM
If you want kids stuff, just sub to the kids service. If you want other stuff, pay for Hulu.

Except that Marvel/Star Wars are not kids stuff.

But how many times can you watch the same movies?   Disney+ looks like the type of thing you subscribe to for a month 1-2 times per year to watch a certain thing then unsubscribe.  Unless you have kids.

Exactly. The greatest thing about the streaming services is that they are so easy to cancel.

I don't play the sub/unsub game.

But do the companies value it? No. They're just happy to have suckers who subscribe long term.
Title: Re: DIS - Disney
Post by: DooDiligence on April 16, 2019, 03:32:07 AM
I find that I can get most of what I want to see with a one month NetFlix signup & there's enough new stuff to sign up again every 3 to 6 months. (The last time I signed up was over the December holidays & plan on doing so again this Summer.)

I get a cheap student rate for Amazon Prime but rarely watch it.

Tried Sling a few times (meh...)

YouTube (free) is my go to for instructional vidis & music discovery.

I love the sub in / sub out models.
Title: Re: DIS - Disney
Post by: rogermunibond on April 16, 2019, 08:44:20 AM
Liberty - from something that Ben wrote in 2016 about why Apple should buy Netflix

"Netflix’s strategy has been a textbook example of Aggregation Theory; Netflix has built leverage and monopsony power over the premium video industry not by controlling distribution, at least not at the beginning, but by delivering a superior customer experience that creates a virtuous cycle: Netflix earns the users, which increases its power over suppliers, which brings in more users, which increases its power even more."

Netflix is still an aggregator true, but like Spotify now, has to deal with a non-monopsony relationship with the traditional suppliers (DIS, CBS, NBCU, TMW).  That's very different from MS with Windows, or Google with search, or FB with social graph.  Some of the best economic returns.  It could well be that Netflix inevitably will have lower returns than these others.

The other possibility is that Netflix could be going around studios and developing near monopsony power with smaller producers and international media companies that don't quite have NFLX threatening them (Fuji TV and NHK in Japan for example).  Eventually though I think they'll all become like BBC which understands the NFLX threat to their business model.

See the FT article for how Netflix is already exerting it's power on producers.  Netflix needs to leave enough crumbs on the table for producers to earn a good return.

https://www.ft.com/content/cf0f0bd6-4596-11e9-a965-23d669740bfb
Title: Re: DIS - Disney
Post by: rkbabang on April 16, 2019, 09:02:19 AM
If you want kids stuff, just sub to the kids service. If you want other stuff, pay for Hulu.

Except that Marvel/Star Wars are not kids stuff.

But how many times can you watch the same movies?   Disney+ looks like the type of thing you subscribe to for a month 1-2 times per year to watch a certain thing then unsubscribe.  Unless you have kids.

Exactly. The greatest thing about the streaming services is that they are so easy to cancel.

I don't play the sub/unsub game.

But do the companies value it? No. They're just happy to have suckers who subscribe long term.

I don't sub/unsub from Netflix or Prime Video, but I do with HBO, Showtime, and Hulu.  There isn't enough on those networks worth paying all year for.  That would go for Prime Video too  if it were a stand-alone service, but streaming isn't the reason I have Amazon Prime, I stay subscribed for other reasons (2-day shipping, music, drive, etc...).  Netflix is really the only video streaming service worth paying all year for.  I suspect I might get Disney+ to checkout The Mandalorian, then cancel after I watch it.
Title: Re: DIS - Disney
Post by: Liberty on April 16, 2019, 10:20:05 AM
Liberty - from something that Ben wrote in 2016 about why Apple should buy Netflix

"Netflix’s strategy has been a textbook example of Aggregation Theory; Netflix has built leverage and monopsony power over the premium video industry not by controlling distribution, at least not at the beginning, but by delivering a superior customer experience that creates a virtuous cycle: Netflix earns the users, which increases its power over suppliers, which brings in more users, which increases its power even more."

Netflix is still an aggregator true, but like Spotify now, has to deal with a non-monopsony relationship with the traditional suppliers (DIS, CBS, NBCU, TMW).  That's very different from MS with Windows, or Google with search, or FB with social graph.  Some of the best economic returns.  It could well be that Netflix inevitably will have lower returns than these others.

The other possibility is that Netflix could be going around studios and developing near monopsony power with smaller producers and international media companies that don't quite have NFLX threatening them (Fuji TV and NHK in Japan for example).  Eventually though I think they'll all become like BBC which understands the NFLX threat to their business model.

See the FT article for how Netflix is already exerting it's power on producers.  Netflix needs to leave enough crumbs on the table for producers to earn a good return.

https://www.ft.com/content/cf0f0bd6-4596-11e9-a965-23d669740bfb

To me that model fits the definition of aggregator.

https://stratechery.com/aggregation-theory/
Title: Re: DIS - Disney
Post by: rogermunibond on April 16, 2019, 10:34:28 AM
Yeah, I misspoke - what I meant was that NFLX doesn't fit the economic model as well as others.  Digitized content is not as low margin as software and it's relationship with suppliers not nearly as monopsonic as others.  Makes it a less powerful aggregator, imo.  But who knows.
Title: Re: DIS - Disney
Post by: Saluki on April 16, 2019, 11:02:58 AM



I do like how they are separating things like that.  In the old days of cable, and even these new live TV streaming services like Hulu live TV, youTubeTV, playstation vue, directv now, etc, you have to pay for sports even if you never watch them.  This way you can pay for only what you intend to watch.  Separating things into sports, children's programming, and everything else.  It isn't completely pay per view, but it isn't everything all bundled together and you pay for it all whether you want it or not.  I think this might be a winning move.

I've looked at DIS in the past and I could never get comfortable with it because of how big a portion of their revenue ESPN is.  I'm not a sports fan so maybe I don't get it, but something like $20+ of most premium cable subscribers bill from the cable company goes to ESPN, if I recall, and as more people cut the cord that number of subscribers has to come down. 

Also, the money they paid for Lucas Films looks well spent because they can keep making star wars movies and selling toys.  The entire DIS library is very valuable, in fact.  In the 80s my sister watched The Little Mermaid, which she watched with her kids in the 2000s and I'm sure her grandkids will watch someday.  They still make money from really old content.  With ESPN, I don't anyone who watches a basketball game from 2 years ago, or even 2 weeks ago.  The content is not evergreen.  I think it's a terrible business in that sense, but what do i know?
Title: Re: DIS - Disney
Post by: cameronfen on April 16, 2019, 11:26:30 AM



I do like how they are separating things like that.  In the old days of cable, and even these new live TV streaming services like Hulu live TV, youTubeTV, playstation vue, directv now, etc, you have to pay for sports even if you never watch them.  This way you can pay for only what you intend to watch.  Separating things into sports, children's programming, and everything else.  It isn't completely pay per view, but it isn't everything all bundled together and you pay for it all whether you want it or not.  I think this might be a winning move.

I've looked at DIS in the past and I could never get comfortable with it because of how big a portion of their revenue ESPN is.  I'm not a sports fan so maybe I don't get it, but something like $20+ of most premium cable subscribers bill from the cable company goes to ESPN, if I recall, and as more people cut the cord that number of subscribers has to come down. 

Also, the money they paid for Lucas Films looks well spent because they can keep making star wars movies and selling toys.  The entire DIS library is very valuable, in fact.  In the 80s my sister watched The Little Mermaid, which she watched with her kids in the 2000s and I'm sure her grandkids will watch someday.  They still make money from really old content.  With ESPN, I don't anyone who watches a basketball game from 2 years ago, or even 2 weeks ago.  The content is not evergreen.  I think it's a terrible business in that sense, but what do i know?

Not an expert in this area, but I think sports is the main thing keeping cable TV alive.  Basically you can watch a substitute of other shows on Netflix or Hulu, but it's quite difficult to have an online only sports game broadcast (because of the coordination issue I think).  So even as they lose customers I think they should be able to command more pricing power when bundling.  There are some games that are watched a long time after they are played (ESPN has "ESPN Classic" as a channel) but it's less evergreen then good TV shows or movies by far. 
Title: Re: DIS - Disney
Post by: fareastwarriors on April 16, 2019, 11:37:27 AM



I do like how they are separating things like that.  In the old days of cable, and even these new live TV streaming services like Hulu live TV, youTubeTV, playstation vue, directv now, etc, you have to pay for sports even if you never watch them.  This way you can pay for only what you intend to watch.  Separating things into sports, children's programming, and everything else.  It isn't completely pay per view, but it isn't everything all bundled together and you pay for it all whether you want it or not.  I think this might be a winning move.

I've looked at DIS in the past and I could never get comfortable with it because of how big a portion of their revenue ESPN is.  I'm not a sports fan so maybe I don't get it, but something like $20+ of most premium cable subscribers bill from the cable company goes to ESPN, if I recall, and as more people cut the cord that number of subscribers has to come down. 

Also, the money they paid for Lucas Films looks well spent because they can keep making star wars movies and selling toys.  The entire DIS library is very valuable, in fact.  In the 80s my sister watched The Little Mermaid, which she watched with her kids in the 2000s and I'm sure her grandkids will watch someday.  They still make money from really old content.  With ESPN, I don't anyone who watches a basketball game from 2 years ago, or even 2 weeks ago.  The content is not evergreen.  I think it's a terrible business in that sense, but what do i know?

Not an expert in this area, but I think sports is the main thing keeping cable TV alive.  Basically you can watch a substitute of other shows on Netflix or Hulu, but it's quite difficult to have an online only sports game broadcast (because of the coordination issue I think).  So even as they lose customers I think they should be able to command more pricing power when bundling.  There are some games that are watched a long time after they are played (ESPN has "ESPN Classic" as a channel) but it's less evergreen then good TV shows or movies by far.

Live sports is why I keep my satellite subscription even though it's like $100 a month... I already have Netflix and Prime Video but we need our sports in our household.

Go Warriors! (terrible lose last night  :'(  )
Title: Re: DIS - Disney
Post by: Spekulatius on April 16, 2019, 04:36:37 PM
Yes, sports programming keeps cable TV alive. There is an untapped (IMO) market to give the customer exactly what they want. Sell subscription to special events like soccer world cup, Olympic Games, European championships, Formula one seasons, NASCAR etc. I would gladly pay for these events, if I can view them the way I want to and the subscription is reasonably priced. it’s similar to the unbundling in the music industry. Recording these events gets cheaper and streaming is dirt cheap, so I think this will eventually come. Eventually business owners like Formula one can do this all by themselves, no middle man needed and keep more $ in their pocket. Same with FIFA, Nascar etc.

Starwars a great asset for Disney and I think they got a bargain. The content will be monetizable for a long time, they can monetize this in theme parks, video games, eventually virtual reality....Disney is already the Berskhire of best in class entertainment IP and assets.
Title: Re: DIS - Disney
Post by: CorpRaider on April 16, 2019, 05:57:02 PM
One more last jedi and I'm not so sure about that.
Title: Re: DIS - Disney
Post by: Jurgis on April 17, 2019, 12:23:00 AM
Starwars a great asset for Disney and I think they got a bargain. The content will be monetizable for a long time, they can monetize this in theme parks, video games, eventually virtual reality....Disney is already the Berskhire of best in class entertainment IP and assets.

I'll be grumpy again, but I find Star Wars being milked to extinction. There's too much mediocre to crappy SW content especially if you also account for all the games.

I'd say the same about Marvel superheroes properties. There has been a super wave of superhero movies and huge monetization of these, but IMO it's getting very saturated and overproduced. Remember how superhero movies were in deep craphole in 90s? Nothing says we can't see this again.

There's something to be said about past Disney approach when they released a movie and then the movie was pulled from distribution for 15 years or so until new generation came. You wanted to see "The Lion King" five years after release? Tough luck, wait another 10 years.
This is clearly impossible in the current day, but it was a smart approach.
Title: Re: DIS - Disney
Post by: LC on April 17, 2019, 09:32:43 AM
Starwars a great asset for Disney and I think they got a bargain. The content will be monetizable for a long time, they can monetize this in theme parks, video games, eventually virtual reality....Disney is already the Berskhire of best in class entertainment IP and assets.

I'll be grumpy again, but I find Star Wars being milked to extinction. There's too much mediocre to crappy SW content especially if you also account for all the games.

I'd say the same about Marvel superheroes properties. There has been a super wave of superhero movies and huge monetization of these, but IMO it's getting very saturated and overproduced. Remember how superhero movies were in deep craphole in 90s? Nothing says we can't see this again.

There's something to be said about past Disney approach when they released a movie and then the movie was pulled from distribution for 15 years or so until new generation came. You wanted to see "The Lion King" five years after release? Tough luck, wait another 10 years.
This is clearly impossible in the current day, but it was a smart approach.

I think you make fair points but I'd argue there is really no better home for story franchises.
Title: Re: DIS - Disney
Post by: Jurgis on April 17, 2019, 11:17:19 AM
I think you make fair points but I'd argue there is really no better home for story franchises.

I won't dispute that.  8)
Title: Re: DIS - Disney
Post by: Liberty on April 21, 2019, 05:00:14 AM
https://exponent.fm/episode-169-family-friendly-disney/
Title: Re: DIS - Disney
Post by: rogermunibond on April 22, 2019, 06:55:24 AM
https://variety.com/2019/digital/news/disney-netflix-streaming-content-comparison-1203193967/

Less than 20% of Netflix's quantity, but higher rated content.
Title: Re: DIS - Disney
Post by: walkie518 on April 22, 2019, 09:00:27 AM
I don't understand why the market overlooked Disney+ until announcement?  I thought this might've already founds its way into the price?

Netflix clearly has the lead in distribution, but a niche A+ product should do well relative to the on-and-off content found on NFLX

HBO NOW might also have a future ;) 

there is plenty of room to pick and choose and still pay less than the cable bundle!
Title: Re: DIS - Disney
Post by: blainehodder on April 22, 2019, 09:03:17 AM
That is the mystery. The fact that it ramped 12% on what was well telegraphed and understood 2 year old info is bizarre, but looking at the multiple it is hard to say that is was already priced in.
Title: Re: DIS - Disney
Post by: rogermunibond on April 22, 2019, 10:00:50 AM
Scope of offerings on Disney+ and the monthly price were not known.  Matt Ball and others wrote about what they "should" do, but until they did it, I suppose one couldn't be sure.

Also could have been an overhang from the DIS/FOXA merger arbs.
Title: Re: DIS - Disney
Post by: rogermunibond on April 22, 2019, 10:13:46 AM
https://www.titlemax.com/discovery-center/money-finance/companies-disney-owns-worldwide/

The graphic in this article is amazing.
Title: Re: DIS - Disney
Post by: Liberty on April 25, 2019, 08:22:30 AM
https://www.cnbc.com/2019/04/25/comcast-is-pondering-a-sale-of-its-minority-stake-in-hulu-to-disney.html
Title: Re: DIS - Disney
Post by: GraphadoApp on May 01, 2019, 09:34:19 AM
https://www.cnbc.com/2019/04/25/comcast-is-pondering-a-sale-of-its-minority-stake-in-hulu-to-disney.html

An indication that they are further positioning themselves to hold a pure play competitor to Netflix? This seems relevant. In a world where streaming platforms (Apple, Disney etc..) are crowding into the market, content ownership and creation will be the differentiating factor. Seems like that earlier graphic highlights the point that content is something the Disney empire has.

I am waiting until after earnings (and the short term noise about the "studios" business) to buy in but I think there is a lot of upside is here.
Title: Re: DIS - Disney
Post by: Liberty on May 06, 2019, 05:34:03 PM
https://redef.com/set/media-set-1530041317916

Matt Ball pieces on Disney.
Title: Re: DIS - Disney
Post by: investor-man on May 09, 2019, 07:33:46 AM
I just opened a position, so prepare yourself for at least a 10% drop :)
Title: Re: DIS - Disney
Post by: DooDiligence on May 10, 2019, 07:20:19 AM
https://kfgo.com/news/articles/2019/may/04/disney-to-sell-fox-regional-sports-networks-to-sinclair-for-96-billion/

I wonder what they'll do with the money?
Title: Re: DIS - Disney
Post by: TorontoRaptorsFan on May 10, 2019, 07:47:24 AM
https://kfgo.com/news/articles/2019/may/04/disney-to-sell-fox-regional-sports-networks-to-sinclair-for-96-billion/

I wonder what they'll do with the money?

Pay down debt for Fox acquisition.
Title: Re: DIS - Disney
Post by: Liberty on May 14, 2019, 06:34:59 AM
https://www.cnbc.com/2019/05/14/comcast-has-agreed-to-sell-its-stake-in-hulu-in-5-years.html

"Comcast agreed to sell its stake in Hulu in five years to Disney and give up its voting rights immediately, according to a press release."
Title: Re: DIS - Disney
Post by: brk64311 on May 20, 2019, 09:02:10 AM
Anyone has a view about the Star India and Hotsar within Disney, acquired through Fox transction? Star India seems to be the lead video provider in India. HotStar, their DTC product,  has 300M monthly active users. India seems to be poised for a long runway of economic growth and digital video business  growth.
Title: Re: DIS - Disney
Post by: bsned2 on May 21, 2019, 11:26:03 AM
I just opened a position, so prepare yourself for at least a 10% drop :)

LOL!  Same here.
Title: Re: DIS - Disney
Post by: cameronfen on May 21, 2019, 11:41:55 AM
Anyone has a view about the Star India and Hotsar within Disney, acquired through Fox transction? Star India seems to be the lead video provider in India. HotStar, their DTC product,  has 300M monthly active users. India seems to be poised for a long runway of economic growth and digital video business  growth.

My friend from India says Hotstar has a couple advantages over Netflix and Prime video, namely more local language content and more importantly sports like cricket.   Additionally its mobile first and most watch on their phones so less shared accounts and more relevent to future trends. 
Title: Re: DIS - Disney
Post by: SlowAppreciation on July 15, 2019, 06:02:36 AM
https://valueinvestorsclub.com/idea/DISNEY_WALT_CO/6126412036
Title: Re: DIS - Disney
Post by: Jurgis on August 08, 2019, 12:15:42 PM
https://www.bloomberg.com/news/articles/2019-08-06/disney-fires-shot-at-netflix-with-13-a-month-streaming-bundle

Non-investor personal view:

- Not gonna buy DIS bundle, since I don't watch sports and I hate ads, so Hulu part is worthless.
- Might sub to Disney+ for Marvel/Lucas opportunistically to watch what I have not seen and then unsub. Although might just watch through Netflix DVD service.
Title: Re: DIS - Disney
Post by: Liberty on August 29, 2019, 04:05:58 PM
https://www.cnbc.com/2019/08/29/disney-sells-its-stake-in-yes-network-to-investor-group-that-includes-amazon.html

Quote
Disney sold its stake in the YES Network to an investor group that includes Amazon, the company announced Thursday.

The total enterprise value of the stake is $3.47 billion, according to the announcement.

The Yankees and Sinclair Broadcast Group are also part of the investor group.
Title: Re: DIS - Disney
Post by: DooDiligence on September 13, 2019, 06:55:47 AM
Work today get paid today, or keep getting paid longer?

https://www.latimes.com/entertainment-arts/business/story/2019-09-12/disney-tv-shows-backend-profit-participation-changes
Title: Re: DIS - Disney
Post by: rogermunibond on September 13, 2019, 08:48:37 AM
Not just Disney but Netflix has been buying out back end participation as well.

It's just kind of hard to calculate when you're not selling in all the pay TV rights windows and syndication.
Title: Re: DIS - Disney
Post by: DooDiligence on September 13, 2019, 09:33:46 AM
Not just Disney but Netflix has been buying out back end participation as well.

It's just kind of hard to calculate when you're not selling in all the pay TV rights windows and syndication.

I agree & think it's a good move for them.
Title: Re: DIS - Disney
Post by: UK on October 04, 2019, 02:46:02 AM
https://www.wsj.com/articles/bob-igers-next-move-11569932934?mod=rsswn

“Him staying at Disney is their gain and the country’s loss,” Winfrey says. “If he had run for president, I would be out there canvassing right now.... I’d be going door to door.... And I’d be saying, ‘Let me tell you about Bob Iger. ’ ”
Title: Re: DIS - Disney
Post by: Spekulatius on October 04, 2019, 05:15:32 AM
Anyone thinks the  chart gap to $115 might close again.“? The stock basically jumped by $20 because of a great presentation. Profits for the next few years will be compressed and if the economy slows down theme parks will be hit.

My biggest worry is ESPN bleeding; it’s still a huge profit generator. I sold my DIS shares a while ago, because I felt the shares were overextended. I like the business, but paying up is not exactly in my nature 💵
Title: Re: DIS - Disney
Post by: Value92 on October 04, 2019, 07:30:50 AM
The licensing rights are not all in the ownership of the company especially outside the US. The Investor Day presentation assumes a lot of those rights will be owned by the company at the launch of the streaming service. When the market starts to realize this, that might be a good entry point
Title: Re: DIS - Disney
Post by: chrispy on October 04, 2019, 09:53:17 AM
The streaming services will have a brutal few years before there is consolidation. Only after consolidation will there be serious profits I think.

And correct, Disney is years away from having the licenses to much of it's celebrated content.

Right now all of the value is flowing to the content companies.
Title: Re: DIS - Disney
Post by: rogermunibond on October 04, 2019, 10:10:47 AM
That's Greenfield's argument but Disney seems to be methodically buying back these various rights across territories and licensing windows.
Title: Re: DIS - Disney
Post by: Jurgis on October 04, 2019, 11:33:00 AM
Right now all of the value is flowing to the content companies.

Somehow I did not see any of that value flow when I owned LGF. Or while I still own DISCA.  ::)
Title: Re: DIS - Disney
Post by: Liberty on October 16, 2019, 11:25:06 AM
Good post on Disney by Matt Ball:

https://www.matthewball.vc/all/marginalaffinity
Title: Re: DIS - Disney
Post by: winjitsu on October 17, 2019, 02:45:50 PM
Quote
Right now all of the value is flowing to the content companies.

Disagree. Value is flowing to content creators. Look at the bidding wars and fat deals for producers / writers / comedians.

Way more money between new and legacy companies than top creative talent available.
Title: Re: DIS - Disney
Post by: chrispy on October 17, 2019, 04:39:56 PM
Winjitsu, I agree with you and must have poorly worded my statement
Title: Re: DIS - Disney
Post by: spartan on November 12, 2019, 06:21:14 PM
Pure anecdotal evidence but it sounds like Disney+ is crushing it. Colleagues and friends wouldn’t stop talking about it today. Many bought one-year subscriptions and seemed very pleased with the content.

I realize this isn’t rigorous fundamental analysis.. but the ubiquity and uniformity of positive sentiment was striking.
Title: Re: DIS - Disney
Post by: merkhet on November 12, 2019, 07:12:55 PM
Pure anecdotal evidence but it sounds like Disney+ is crushing it. Colleagues and friends wouldn’t stop talking about it today. Many bought one-year subscriptions and seemed very pleased with the content.

I realize this isn’t rigorous fundamental analysis.. but the ubiquity and uniformity of positive sentiment was striking.

They’re basically monetizing my nostalgia.
Title: Re: DIS - Disney
Post by: Gregmal on November 12, 2019, 07:29:13 PM
Parked some money here about a month ago. Just an easy place to be that should have some wind at its back for a couple months as this rolls out...Dont need to be a genius to see that.
Title: Re: DIS - Disney
Post by: glorysk87 on November 12, 2019, 08:38:59 PM
Sentiment is definitely positive, but looking at the numbers, having a hard time seeing a reason not to sell the stock. At/above $140, there's an awful lot being priced in.
Title: Re: DIS - Disney
Post by: Jurgis on November 12, 2019, 09:01:05 PM
Disney+ what? ... /yawn  ???
Title: Re: DIS - Disney
Post by: Spekulatius on November 13, 2019, 05:23:36 AM
Sentiment is definitely positive, but looking at the numbers, having a hard time seeing a reason not to sell the stock. At/above $140, there's an awful lot being priced in.
My thinking too. The streaming business will only turn profitable in a couple of years (2024?) and will cost a lot of money before that. I also don’t think Netflix will be easy to topple.
Title: Re: DIS - Disney
Post by: Gregmal on November 13, 2019, 09:18:51 AM
10M subs already!

People often quote various market jingles like "short term market is a voting machine and long term its a weighing machine"...well, right now it's voting and then momentum is all that matters.

EZ
Title: Re: DIS - Disney
Post by: wabuffo on November 13, 2019, 09:29:42 AM
10M subs already!

Yes - but how many subs after the free week is over and every-one has binged watched all of the StarWars/MCU movies.   ;)

wabuffo
Title: Re: DIS - Disney
Post by: Gregmal on November 13, 2019, 09:31:07 AM
10M subs already!

Yes - but how many subs after the free week is over and every-one has binged watched all of the StarWars/MCU movies.   ;)

wabuffo

Haha yea. Im not a TV guy at all, so I dont get it. But the news flow I find is somewhat predictable. Im lightening up into this...
Title: Re: DIS - Disney
Post by: decko on November 13, 2019, 09:35:54 AM
Families alone will be subscribers.. If you have kids you know what i mean. If you dont, kids marathon the million titles that disney has in their library. That is a lot of subscribers, domestic and international.  What is the expected subscribers number that is considered a success.? Have they put a number out yet?
Title: Re: DIS - Disney
Post by: Gregmal on November 13, 2019, 10:12:51 AM
Families alone will be subscribers.. If you have kids you know what i mean. If you dont, kids marathon the million titles that disney has in their library. That is a lot of subscribers, domestic and international.  What is the expected subscribers number that is considered a success.? Have they put a number out yet?

I dont believe DIS has put anything out there. But for all the reasons you describe above, you know that its a near certainty that in the beginning, the numbers will be huge. So, if you front run that, and then just let the news flow and excitement work its way into the market, things typically skew your way. Or at least that's what Ive found is the easiest way to get 10% monthly returns out of mega cap stocks...let others focus on the granular bullshit. By the time they figure it out, the markets will already be re-priced and from there they can figure out if its worth hanging around for 7% annual appreciation.

Again, full disclosure, Ive cut about half my position into this rally, but wouldn't be shocked to see the 52 week tested again. This also gets quite interesting from a value perspective if you look at things through the lens of NFLX's valuation(assuming one thinks its valid, which I dont)...
Title: Re: DIS - Disney
Post by: Jurgis on November 13, 2019, 10:18:52 AM
If anyone is considering D+, here's the presumed list of all movies: https://www.wildaboutmovies.com/features/disney-plus-complete-list-of-movies/
Not sure if it's 100% correct, but FYI.

Edit: So far I saw about 5 titles that I'd wanna watch and haven't seen before.

And this section: Disney Original Movies (Straight to TV or DVD) - I did not realize Disney made so much crap...  ::)
Title: Re: DIS - Disney
Post by: absolutbrian on November 13, 2019, 10:20:52 AM
10m subscribers on the first day. That's incredible. Some analysts thought it would take Disney a year to reach 10 million subscribers.
Title: Re: DIS - Disney
Post by: peridotcapital on November 13, 2019, 10:37:14 AM
Families alone will be subscribers.. If you have kids you know what i mean. If you dont, kids marathon the million titles that disney has in their library. That is a lot of subscribers, domestic and international.  What is the expected subscribers number that is considered a success.? Have they put a number out yet?

Management guided to between 60M and 90M subs by the end of fiscal 2024, with 1/3 US and 2/3 Intl. Impressive numbers out of the gate aren't that surprising, in part due to partnerships. Verizon customers with unlimited data plans get a 1-year subscription for free, for instance. Now that the bar has been set high by both the company and the market, they will need to get to the high end of expectations. And between now and 2024, they will give up 100% margin third party licensing revenue and start booking loss-making streaming revenue. Looks like a good candidate to trim into this strength and I will probably sell it all at 150.
Title: Re: DIS - Disney
Post by: Castanza on November 13, 2019, 10:56:44 AM
10M subs already!

Yes - but how many subs after the free week is over and every-one has binged watched all of the StarWars/MCU movies.   ;)

wabuffo

Is there any breakdown of which subs are standalone vs bundled with other services (Verizon)?
Title: Re: DIS - Disney
Post by: wabuffo on November 13, 2019, 11:20:17 AM
There's also reports in the media industry that Disney did some panic-buying back of their streaming rights on more titles than the original business plan in order to beef up Day 1 content.  Particularly, Marvel Comic Universe titles. 

This is a purely defensive move by Disney and it will cost them money.   I think they were getting $2-$3B in annual royalty revenue (not sure about these revenue numbers) with little opex from Netflix and other streaming services.   That is rapidly going to zero and they will have to make it up via subscriptions.  At $80 per year per subscriber, they will need 25m-37m subscribers just to recover the revenue

But their new annual opex will be significantly higher due to exclusive content creation (eg. Mandolorian) + technology/digital streaming costs.  They may end up in a good place -- but in the short term, this is profit-destructive (even at 5x their Day 1 signup numbers).   At 10m paying subscribers, they are incinerating money.

The streaming service business is not very profitable as many services basically give it away from a revenue perspective while scripted content creation costs for talent are going through the roof.

Good for the broadband internet providers, though  8)

wabuffo
Title: Re: DIS - Disney
Post by: TorontoRaptorsFan on November 13, 2019, 12:35:20 PM
10M subs already!

Yes - but how many subs after the free week is over and every-one has binged watched all of the StarWars/MCU movies.   ;)

wabuffo

They're only releasing episodes from their original programs weekly. The first episode of the Mandolorian was done extremely well. No expense was spared in the special effects of the show and the ending of the episode had a very nice cliffhanger. The second episode is coming out on friday. At the conclusion of the series either a new Star Wars or Marvel original series will begin. A lot of the Marvel, Star Wars, and Pixar movies/shows are being released in 4K and Dolby Atmos.
Title: Re: DIS - Disney
Post by: Gregmal on November 13, 2019, 12:46:06 PM
10M subs already!

Yes - but how many subs after the free week is over and every-one has binged watched all of the StarWars/MCU movies.   ;)

wabuffo

They're only releasing episodes from their original programs weekly. The first episode of the Mandolorian was done extremely well. No expense was spared in the special effects of the show and the ending of the episode had a very nice cliffhanger. The second episode is coming out on friday. At the conclusion of the series either a new Star Wars or Marvel original series will begin. A lot of the Marvel, Star Wars, and Pixar movies/shows are being released in 4K and Dolby Atmos.

Hopefully someone figures out that the binge watch model ultimately sucks for the consumer. At least I feel it does, when it comes to ongoing series. Its bad enough with shit like HBO where you wait 18-36 months for a new season. But with Netflix, you legit watch the entire season in a couple days and then are often waiting even further. At the least, killing that, and doing the one episode per week would be great. Or taking it a step further and not releasing the first 12 episodes until 18 or so are finished. This way, you can finish up season 2 while one is running, and then shoot season 3 in the lead up to season 2. That would significantly knock the lag time down and keep viewers plugged in. Yea, yea, I know its added cost...but with certain shows, there isn't exactly uncertainty regarding whether or not it will get renewed.
Title: Re: DIS - Disney
Post by: wabuffo on November 13, 2019, 12:48:44 PM
A lot of the Marvel, Star Wars, and Pixar movies/shows are being released in 4K and Dolby Atmos.

which appeals to the nerdy 1% of the 10m subs who actually care about this stuff.

I thought the Mandalorian pilot was meh... like the Star Wars recent vintage of movies - it looks like it was written (and rewritten) by committee.  The best stuff is not coming to Disney+, the rest of Disney is going to see to that.  This is the problem with successful businesses - they can't bring themselves to fully commit to do what it takes to make their new business successful if it means destroying/cannibalizing their legacy businesses.

wabuffo
(one of 1% videophile nerds)
Title: Re: DIS - Disney
Post by: Castanza on November 13, 2019, 01:16:01 PM
10M subs already!

Yes - but how many subs after the free week is over and every-one has binged watched all of the StarWars/MCU movies.   ;)

wabuffo

They're only releasing episodes from their original programs weekly. The first episode of the Mandolorian was done extremely well. No expense was spared in the special effects of the show and the ending of the episode had a very nice cliffhanger. The second episode is coming out on friday. At the conclusion of the series either a new Star Wars or Marvel original series will begin. A lot of the Marvel, Star Wars, and Pixar movies/shows are being released in 4K and Dolby Atmos.

Hopefully someone figures out that the binge watch model ultimately sucks for the consumer. At least I feel it does, when it comes to ongoing series. Its bad enough with shit like HBO where you wait 18-36 months for a new season. But with Netflix, you legit watch the entire season in a couple days and then are often waiting even further. At the least, killing that, and doing the one episode per week would be great. Or taking it a step further and not releasing the first 12 episodes until 18 or so are finished. This way, you can finish up season 2 while one is running, and then shoot season 3 in the lead up to season 2. That would significantly knock the lag time down and keep viewers plugged in. Yea, yea, I know its added cost...but with certain shows, there isn't exactly uncertainty regarding whether or not it will get renewed.

From a consumer perspective who would want that though? It's like Pandora's box. With today's mindset of gotta have it now one would think it's difficult to keep subscribers if you shift your platform to the 1 episode a week model if the competition manages to pump out binge worthy content at a faster rate. The streaming wars is beginning to look like a race off a cliff. At what point will plethora of original content not keep the consumers satisfied enough to continue a subscription? Personally, I think the platforms that don't offer some form of live tv alongside original content will eventually begin to see their subscription rates dwindle if sub prices continue to rise. The amount of big names Netflix has been using can't be cheap. 

I've used Hulu Live for a year or so and have enjoyed the platform. It has some decent original content but also has live TV which satiates you when you're waiting for the next season of whatever it is you were watching. I do think the original content on Netflix is generally better.
Title: Re: DIS - Disney
Post by: Gregmal on November 13, 2019, 01:26:14 PM
There should be a middle ground between gotta have it now and wait 2 years for a new season. Sure theres people with nothing to do, and gotta have it now means they blow through House of Cards new season in one day. Then theyre stuck waiting years for the next one and probably forget what ever happened the previous season by the time the new one rolls around. Get on a schedule were you are releasing new content every 6-12 months(in terms of shows), while also dragging along viewers by forcing them to be disciplined. I know I kept Showtime for an extra few months because of a couple series they had going that only did one episode a week. Same with HBO recently, until Righteous Gemstones and Succession finished up. If those shows come back in 6 months, vs 12-18, I probably dont cancel and if I do, the in between lag time is less. IE company has me as a monthly paying sub for longer.

People will literally just watch and then cancel unless something new comes along. Thats why live sports and news is going to be crucial. Its silly, and part of the reason I am short NFLX, to assume people will just put up with same old, same old, forever, WHILE being OK with price hikes. I mean the whole basis of the streaming revolution is because people are friggin cheap and dont want to pay $70 a month for shit they dont find interesting.

Title: Re: DIS - Disney
Post by: glorysk87 on November 13, 2019, 01:39:46 PM
10m subscribers on the first day. That's incredible. Some analysts thought it would take Disney a year to reach 10 million subscribers.

It's really not day 1 though. They've been running the marketing machine at full tilt for weeks now, and pre-orders have also been open for months.
Title: Re: DIS - Disney
Post by: glorysk87 on November 13, 2019, 01:41:57 PM
I sold half my position today. Even with extremely generous assumptions, the best case scenario is that the stock offers ~10% annual return from here. In a best case scenario. Not great risk/reward in my view.
Title: Re: DIS - Disney
Post by: Liberty on November 20, 2019, 08:05:01 AM
https://www.youtube.com/watch?v=zNb2PhiwOF0

40-min interview with Kevin Mayer, who oversees Disney+
Title: Re: DIS - Disney
Post by: Spekulatius on February 05, 2020, 05:04:34 PM
I wonder if Mr market is waking up to the fact that this is a company with challenging looking financials trading for $140 and earning $5.3 this year and. It much more next year. I guess it’s cheap relative to Netflix, but it’s quite expensive relative to its own history. Disney’s cable channels are struggling mightily and the ARPU of their streaming accounts is way lower than for cable.

I do get the narrative about the flywheel of Disney brands, entertainment properties and DTC, but it’s going to take years until they can lap the effects of cable cutting.
Title: Re: DIS - Disney
Post by: bizaro86 on February 05, 2020, 06:07:20 PM
I think its interesting that there were no questions on the call about cord cutting and espn sub losses. A year or two ago that's all anyone asked about, with maybe a parks and a studio question thrown in.

Now all the questions were about disney plus with a parks and studio question thrown in.

I was hoping for a big bump on disney plus numbers which I expected to be good, and then sell and/or sell in the money calls. I think I will still sell the calls.

I think DIS is one of the all time great businesses. I just dropped a few thousand dollars at the parks in California, and every individual purchase (tickets, maxpass, food, snacks, character breakfast) felt like great value. But the total bill was significant. I actually think they could take significant price in the parks business. I've gone to all the bigger west coast theme parks with my kids in the last 2 years - DIS is the most expensive but it's so much better I think the value is there.

But the headwinds for the next year are huge. The theatrical business will make half as much money if they're lucky, 2 parks are shut down, and ESPN will make less money on lower subscriptions/higher rights payments. Plus DTC spending - both on content (3x marvel series) and promotion (takes a lot of $6 arpu months to pay for a super bowl ad).

Given the multiple it seems likely that there will be a better chance to re-enter at a lower price in the next 24 months. I have a hard time owning things that are mostly trading on story.
Title: Re: DIS - Disney
Post by: Liberty on February 25, 2020, 01:08:39 PM
Bob Iger is out:

https://www.cnbc.com/2020/02/25/disney-names-bob-chapek-next-ceo.html
Title: Re: DIS - Disney
Post by: Pauly on February 25, 2020, 01:24:33 PM
Wow, didn't see that coming. Wonder if it's health related?

If it was conduct based I assume he wouldn't be staying on as chairman.

Title: Re: DIS - Disney
Post by: Liberty on February 25, 2020, 01:36:56 PM
Wow, didn't see that coming. Wonder if it's health related?

If it was conduct based I assume he wouldn't be staying on as chairman.

That was my first thought.. Either he's ill, or he's running for president ¯\_(ツ)_/¯
Title: Re: DIS - Disney
Post by: CorpRaider on February 25, 2020, 02:43:32 PM
Those were my thoughts too.  One other possibility (probably low) but he said he wants to focus 100% on content...I wonder if the Star Wars film is really in the ditch and he wants to try and fix that.
Title: Re: DIS - Disney
Post by: Spekulatius on February 25, 2020, 04:08:19 PM
Wow, didn't see that coming. Wonder if it's health related?

If it was conduct based I assume he wouldn't be staying on as chairman.

I think health related is the most likely possibility. I first thought they the board may have canned him, but I think this is unlikely, but who knows? In any case, Iger has masterfully created a narrative for DIS that has helped it trade at a premium valuation roughly twice as high than peers. I think some of this value premium may deflate.

It’s partly justified by having better assets, but I think the narrative created by Iger was a big part of it.
Title: Re: DIS - Disney
Post by: dwy000 on February 25, 2020, 05:07:30 PM
I dont know.  He wanted to leave a couple of years ago (according to his book) but got forced to stay to close the Fox acquisition. So it makes sense he wants out now that it's all going gangbusters and Fox has been swallowed.

In addition, it's tough to transition the closer you get to your end date. The last year would be so destructive with infighting and he would be a lame duck for internal politics. In this way he gets to announce and transition with less distraction for the company.

Could be health ( or something else a la Les Moonves) but hard to know. Either way, his legend has been cemented right next to Walt.
Title: Re: DIS - Disney
Post by: bizaro86 on February 25, 2020, 05:32:14 PM
I think he knows the next couple of results are going to be bad and is getting out on top.

Two parks closed for coronavirus, Mulan opening rescheduled (from an already much weaker than 2019 film slate). And potential bad news (expenses ++) from the upcoming NFL renegotiation.

I sold covered calls at $130 (thanks to Gregmal for the idea!) on my whole position in the mid $140s. Now I need to decide whether to roll them lower or just let it ride.
Title: Re: DIS - Disney
Post by: Spekulatius on February 25, 2020, 06:09:14 PM
I think he knows the next couple of results are going to be bad and is getting out on top.

Two parks closed for coronavirus, Mulan opening rescheduled (from an already much weaker than 2019 film slate). And potential bad news (expenses ++) from the upcoming NFL renegotiation.

I sold covered calls at $130 (thanks to Gregmal for the idea!) on my whole position in the mid $140s. Now I need to decide whether to roll them lower or just let it ride.

Yes, that’s also a possibility. The earnings estimate a while ago were ~$5.5/share, so if we get a significant earnings warning and get $4.5/share, how do we justify a one $125 share price, when competitors trade at 8x earnings and 10%+ FCF yields? Even discounting the difference in quality, that a bridge or two too far imo. I can easily see DIS hit $100/ share and it still wouldn’t look cheap.
Title: Re: DIS - Disney
Post by: bizaro86 on February 25, 2020, 08:24:21 PM
I think he knows the next couple of results are going to be bad and is getting out on top.

Two parks closed for coronavirus, Mulan opening rescheduled (from an already much weaker than 2019 film slate). And potential bad news (expenses ++) from the upcoming NFL renegotiation.

I sold covered calls at $130 (thanks to Gregmal for the idea!) on my whole position in the mid $140s. Now I need to decide whether to roll them lower or just let it ride.

Yes, that’s also a possibility. The earnings estimate a while ago were ~$5.5/share, so if we get a significant earnings warning and get $4.5/share, how do we justify a one $125 share price, when competitors trade at 8x earnings and 10%+ FCF yields? Even discounting the difference in quality, that a bridge or two too far imo. I can easily see DIS hit $100/ share and it still wouldn’t look cheap.

I'd be a pretty heavy buyer at $100. I think the studio business and D+ are better than their competitors businesses, and the parks are basically unequaled.

At $100 the market cap would be $195B, add $48B debt and deduct $7B cash for an EV of $236B.

The parks did $7 B in op income in the TTM. It's been growing 11% pretty consistently, so I dont think 20x is out of line. So that leaves $96 B for the rest of the business. There's ~$9B of ex-parks EBITDA. That seems pretty cheap for their studio and networks to me. Their competitors are cheaper than that even now, but I'd rather own the Disney studio than any of the other ones.

Title: Re: DIS - Disney
Post by: mcliu on February 25, 2020, 08:49:43 PM
Agreed. Disney has a lot of irreplaceable unique assets + direct & global distribution in this new streaming age. Worth the premium.
Title: Re: DIS - Disney
Post by: bizaro86 on February 26, 2020, 08:58:05 AM
Agreed. Disney has a lot of irreplaceable unique assets + direct & global distribution in this new streaming age. Worth the premium.

The biggest risk here is that the income from networks (==ESPN) starts to fall off. They've been able to overcome customer losses with price increases so far. But the NFL comes up soon, and their cost for Monday Night Football will go way up (which they need to keep, imo). That will put more pressure on ESPN income.

The narrative here has changed - a couple of years ago ESPN sub losses was all anyone cared about, and they were languishing at/below $100. That was a great buying opportunity (and I bought lots). Nobody seems to be talking about that anymore, and the long term issue is still the same imo. D+/Hulu/ESPN+ might eventually get there, but it'll be a long road. Plus you have recession/coronavirus risk for the parks business.

I'm long term extremely excited about this company, but I think the short term is likely to be a disappointment. I sold calls against my full position (which are now out of the money) and I still might roll them lower/longer. If this gets to $100-$105 or so I'd buy another big tranche, but at $126 I think its more like a hold.
Title: Re: DIS - Disney
Post by: CorpRaider on February 26, 2020, 10:15:31 AM
I am waiting/hoping it gets punished a lot as the financials look horrible over the next few years.
Title: Re: DIS - Disney
Post by: nspo on February 26, 2020, 05:16:38 PM
I think he knows the next couple of results are going to be bad and is getting out on top.

Two parks closed for coronavirus, Mulan opening rescheduled (from an already much weaker than 2019 film slate). And potential bad news (expenses ++) from the upcoming NFL renegotiation.

I sold covered calls at $130 (thanks to Gregmal for the idea!) on my whole position in the mid $140s. Now I need to decide whether to roll them lower or just let it ride.

+1

Yes, that’s also a possibility. The earnings estimate a while ago were ~$5.5/share, so if we get a significant earnings warning and get $4.5/share, how do we justify a one $125 share price, when competitors trade at 8x earnings and 10%+ FCF yields? Even discounting the difference in quality, that a bridge or two too far imo. I can easily see DIS hit $100/ share and it still wouldn’t look cheap.

I'd be a pretty heavy buyer at $100. I think the studio business and D+ are better than their competitors businesses, and the parks are basically unequaled.

At $100 the market cap would be $195B, add $48B debt and deduct $7B cash for an EV of $236B.

The parks did $7 B in op income in the TTM. It's been growing 11% pretty consistently, so I dont think 20x is out of line. So that leaves $96 B for the rest of the business. There's ~$9B of ex-parks EBITDA. That seems pretty cheap for their studio and networks to me. Their competitors are cheaper than that even now, but I'd rather own the Disney studio than any of the other ones.
Title: Re: DIS - Disney
Post by: Spekulatius on February 26, 2020, 05:22:56 PM
I am waiting/hoping it gets punished a lot as the financials look horrible over the next few years.

Same here. As it stands currently, I prefer CMCSA because it’s much lower valued and I see it only in part justified by DIS better asset quality. Anyways, it will be interesting how it goes with DIS new CEO. We know the spiel - reset expectations, write off a couple of assets that aren’t doing well and reset the bar so it’s easier to jump over.
Title: Re: DIS - Disney
Post by: Gregmal on February 26, 2020, 06:04:11 PM
Maybe we can get a team of us COBF real estate dudes together and do a "whats Disneys real estate worth" report!

I think this one was obviously a little euphoric a few months back but its got some irreplaceable assets and content. I'll probably look/hope to start buying in the $11x range and below. Which by my count should maybe next Monday or Tuesday. At the current rate we just need like 6 more days of people getting the coronavirus and short term market folks will drive this to the $90s. Maybe if US cases reach 1,000, this and like half the market will be in single digits!
Title: Re: DIS - Disney
Post by: woltac on March 12, 2020, 06:18:10 PM
Anyone want to guess what Disney will be selling for after they shut down the US theme parks?
Title: Re: DIS - Disney
Post by: bergman104 on March 12, 2020, 06:42:22 PM
Anyone want to guess what Disney will be selling for after they shut down the US theme parks?

I'm hoping much lower. I'm already interested at this price. Seems like the general theme has been to cancel school, colleges, and gatherings for the next 2-3 weeks. I imagine we'd see a much lower price if that happens
Title: Re: DIS - Disney
Post by: glorysk87 on March 12, 2020, 06:42:42 PM
Anyone want to guess what Disney will be selling for after they shut down the US theme parks?

Don't think it goes a whole lot lower. Shutdown of the parks was already mostly priced in.
Title: Re: DIS - Disney
Post by: CorpRaider on March 12, 2020, 06:57:02 PM
They announced the closures.  Postponing Mulan release, current pixar film has to be tanked...espn has no sports to show for who knows how long...cruise lines and hotels are going to be empty and moody's put them on credit watch negative.
Title: Re: DIS - Disney
Post by: Castanza on March 12, 2020, 07:05:54 PM
They announced the closures.  Postponing Mulan release, current pixar film has to be tanked...espn has no sports to show for who knows how long...cruise lines and hotels are going to be empty and moody's put them on credit watch negative.

3 new cruise ships in the pipe for 2021, 22, 23 too, that's got to be expensive. They don't break down revenue for their cruise line their 10k. It's all lumped together under Parks and Resorts which is (going from memory) 25ish% rev?
Title: Re: DIS - Disney
Post by: mwtorock on March 13, 2020, 05:51:22 AM
the princesses and the mouse will live on, probably longer than any of us. and the revenue lost in this quarter might just be captured later this year.
Title: Re: DIS - Disney
Post by: Castanza on March 13, 2020, 05:58:08 AM
Absolutely

It was more of a near term comment that will probably add to the downward pressure.
Title: Re: DIS - Disney
Post by: CorpRaider on March 13, 2020, 06:05:39 AM
I don't see how they recapture the lost revenue from cancelled cruises and shut down parks and postponed movie showings, and cancelled sporting events/seasons especially in the same year.  Also, we have a brand new CEO here.  He would be most unusual if he didn't use this opportunity to clear the decks/reset expectations, especially following Iger.  The financials were already likely to look like crap for a while as they invest/transition from a fantastic linear tv model to direct to consumer.
Title: Re: DIS - Disney
Post by: DooDiligence on March 13, 2020, 06:12:30 AM
www.latimes.com/entertainment-arts/business/story/2020-03-11/disney-annual-shareholder-meeting
Title: Re: DIS - Disney
Post by: Xerxes on April 18, 2020, 05:24:28 AM
Question for you guys.

I own DIS for about 5 years and have been enjoy Iger' last chapter with the stock nearing $150. Right now, I had lost about a third of the position, i usually don't have a problem in holding long term positions through thick and thin, it is just that in Disney's case, every business that they are in, there seem to have be heavily impacted by the pandemic .... and social distancing will aggravate its situation.

People point to Disney+, yes it has now 50 million subs, but that is money-losing machine on the front-end of the investment cycle. So right now, DIS is akin to a money-losing Netflix with the additional headaches of fixed cost of its theme parks + cruise ships + ESPN passing through the income statement and hitting the bottom line.

Add to it the $50 billion debt that Disney has (mostly due to 20th Cent Fox). 

Is there a bull case here for me to add if it does go down to $90 after earning.
Title: Re: DIS - Disney
Post by: glorysk87 on April 18, 2020, 12:01:43 PM
Question for you guys.

I own DIS for about 5 years and have been enjoy Iger' last chapter with the stock nearing $150. Right now, I had lost about a third of the position, i usually don't have a problem in holding long term positions through thick and thin, it is just that in Disney's case, every business that they are in, there seem to have be heavily impacted by the pandemic .... and social distancing will aggravate its situation.

People point to Disney+, yes it has now 50 million subs, but that is money-losing machine on the front-end of the investment cycle. So right now, DIS is akin to a money-losing Netflix with the additional headaches of fixed cost of its theme parks + cruise ships + ESPN passing through the income statement and hitting the bottom line.

Add to it the $50 billion debt that Disney has (mostly due to 20th Cent Fox). 

Is there a bull case here for me to add if it does go down to $90 after earning.

The only question that matters here is "what is your timeframe"?
Title: Re: DIS - Disney
Post by: DooDiligence on April 18, 2020, 02:18:05 PM
Question for you guys.

I own DIS for about 5 years and have been enjoy Iger' last chapter with the stock nearing $150. Right now, I had lost about a third of the position, i usually don't have a problem in holding long term positions through thick and thin, it is just that in Disney's case, every business that they are in, there seem to have be heavily impacted by the pandemic .... and social distancing will aggravate its situation.

People point to Disney+, yes it has now 50 million subs, but that is money-losing machine on the front-end of the investment cycle. So right now, DIS is akin to a money-losing Netflix with the additional headaches of fixed cost of its theme parks + cruise ships + ESPN passing through the income statement and hitting the bottom line.

Add to it the $50 billion debt that Disney has (mostly due to 20th Cent Fox). 

Is there a bull case here for me to add if it does go down to $90 after earning.

The only question that matters here is "what is your timeframe"?

I agree, my time frame is 10+ years on DIS.

I had an average cost of $100.77 & had trimmed around 25% last year at $141. 07 & then repurchased at exactly $80 the same number of shares that I'd previously sold & if it goes to $80 again I'll add more.
Title: Re: DIS - Disney
Post by: plato1976 on April 18, 2020, 05:34:04 PM
If the time frame is 10 years you may not want to trade it

Question for you guys.

I own DIS for about 5 years and have been enjoy Iger' last chapter with the stock nearing $150. Right now, I had lost about a third of the position, i usually don't have a problem in holding long term positions through thick and thin, it is just that in Disney's case, every business that they are in, there seem to have be heavily impacted by the pandemic .... and social distancing will aggravate its situation.

People point to Disney+, yes it has now 50 million subs, but that is money-losing machine on the front-end of the investment cycle. So right now, DIS is akin to a money-losing Netflix with the additional headaches of fixed cost of its theme parks + cruise ships + ESPN passing through the income statement and hitting the bottom line.

Add to it the $50 billion debt that Disney has (mostly due to 20th Cent Fox). 

Is there a bull case here for me to add if it does go down to $90 after earning.

The only question that matters here is "what is your timeframe"?

I agree, my time frame is 10+ years on DIS.

I had an average cost of $100.77 & had trimmed around 25% last year at $141. 07 & then repurchased at exactly $80 the same number of shares that I'd previously sold & if it goes to $80 again I'll add more.
Title: Re: DIS - Disney
Post by: DanielGMask on April 18, 2020, 08:22:15 PM
Question for you guys.

I own DIS for about 5 years and have been enjoy Iger' last chapter with the stock nearing $150. Right now, I had lost about a third of the position, i usually don't have a problem in holding long term positions through thick and thin, it is just that in Disney's case, every business that they are in, there seem to have be heavily impacted by the pandemic .... and social distancing will aggravate its situation.

People point to Disney+, yes it has now 50 million subs, but that is money-losing machine on the front-end of the investment cycle. So right now, DIS is akin to a money-losing Netflix with the additional headaches of fixed cost of its theme parks + cruise ships + ESPN passing through the income statement and hitting the bottom line.

Add to it the $50 billion debt that Disney has (mostly due to 20th Cent Fox). 

Is there a bull case here for me to add if it does go down to $90 after earning.

The only question that matters here is "what is your timeframe"?

I agree, my time frame is 10+ years on DIS.

I had an average cost of $100.77 & had trimmed around 25% last year at $141. 07 & then repurchased at exactly $80 the same number of shares that I'd previously sold & if it goes to $80 again I'll add more.

If the time frame is 10 years you may not want to trade it

I agree.
Title: Re: DIS - Disney
Post by: Gregmal on April 19, 2020, 01:48:14 PM
Not really investment related, but the upcoming Jordan series sounds like it's going to be huge. Pretty incredible story behind all of it, and in the world we live in, hard to imagine how in the world this sat unseen for more than two decades.
Title: Re: DIS - Disney
Post by: roark33 on April 19, 2020, 07:34:39 PM
It sat unseen because Jordan didn't want it to be seen....yet. 

He finally gave permission this year.  He had ultimate veto power and always said no over the years.

Here's the story behind releasing it now:

https://www.espn.com/nba/story/_/id/29044827/an-all-access-michael-jordan-documentary-how-last-dance-was-made-possible
Title: Re: DIS - Disney
Post by: Agrippa07 on April 20, 2020, 02:53:27 AM
Disney stops paying 100,000 workers to save $500m a month
https://giftarticle.ft.com/giftarticle/actions/redeem/3afc3fd5-7a03-4f54-9521-fe07c1330b4b  (http://Disney stops paying 100,000 workers to save $500m a month
https://giftarticle.ft.com/giftarticle/actions/redeem/3afc3fd5-7a03-4f54-9521-fe07c1330b4b)

   The decision leaves Disney staff reliant on state benefits — public support that could run to hundreds of millions of dollars over coming months — even as the company protects executive bonus schemes and a $1.5bn dividend payment due in July.

As a shareholder in Dis, I find this is appalling. The executives should be forgoing their base &variable pay 1st, followed by shareholders and lastly the employees.

 

Title: Re: DIS - Disney
Post by: gfp on April 20, 2020, 04:57:15 AM
Great article - thanks for posting.  I grew up in Chicago in the 80's and 90's - what a time

It sat unseen because Jordan didn't want it to be seen....yet. 

He finally gave permission this year.  He had ultimate veto power and always said no over the years.

Here's the story behind releasing it now:

https://www.espn.com/nba/story/_/id/29044827/an-all-access-michael-jordan-documentary-how-last-dance-was-made-possible
Title: Re: DIS - Disney
Post by: DooDiligence on April 20, 2020, 05:54:32 AM
Disney stops paying 100,000 workers to save $500m a month
https://giftarticle.ft.com/giftarticle/actions/redeem/3afc3fd5-7a03-4f54-9521-fe07c1330b4b  (http://Disney stops paying 100,000 workers to save $500m a month
https://giftarticle.ft.com/giftarticle/actions/redeem/3afc3fd5-7a03-4f54-9521-fe07c1330b4b)

   The decision leaves Disney staff reliant on state benefits — public support that could run to hundreds of millions of dollars over coming months — even as the company protects executive bonus schemes and a $1.5bn dividend payment due in July.

As a shareholder in Dis, I find this is appalling. The executives should be forgoing their base &variable pay 1st, followed by shareholders and lastly the employees.

Disney Execs Are Unhappy About Slashed Salaries

"A standard Disney vp earns between $150,000 and $200,000 in annual base pay while an executive vp can earn upwards of $700,000 per year depending on their department, according to The Hollywood Reporter. Under this new effort, earnings are being reduced to weather the financial storm. However, the amended contracts presented to the affected executives reportedly do not include an end date, which is eliciting backlash from the higher ranks."

"Chairman and former CEO Bob Iger has already announced that he will forgo his entire salary. New CEO Bob Chapek will reduce his base salary by 50 percent. However, the outlet notes that this only applies to their base salaries. Iger’s on-paper take home last year was “just” $3 million but he earned $44.5 million in total compensation (and was on pace for potentially more than $400 million over the next four years) while Chapek carries an annual target bonus of $7.5 million and a long-term deal worth upwards of $15 million. Some are flummoxed by this arrangement particularly as they contemplate an extended economic downturn."

https://observer.com/2020/04/bob-iger-bob-chapek-salary-disney-execs-pay-cuts-coronavirus/

---

Not a particularly good look for them.

I sent a msg to investor relations re: Iger & Chapek's bonuses.

Who knows, my email to MO may have been the one that tipped Howard Willard into resignation.
Maybe this msg will prompt Iger & Chapek to forgo their bonuses?   ???
Title: Re: DIS - Disney
Post by: mwtorock on April 20, 2020, 06:47:07 AM
Way to go!!

*******************************************************************************
I sent a msg to investor relations re: Iger & Chapek's bonuses.

Who knows, my email to MO may have been the one that tipped Howard Willard into resignation.
Maybe this msg will prompt Iger & Chapek to forgo their bonuses?   ???
[/quote]
Title: Re: DIS - Disney
Post by: Xerxes on April 20, 2020, 03:01:00 PM
Thanks folks for the feedback.
Timeframe is 10 year +, I have been holding flat for 4 years by itself before the re-rating of last spring, what is another 10 years  :-)

I am hesitant to add unless it drops big post earing, just because, I would categorize DIS as net-net headwinds in the short-term. Said differently, down for a reason and I will have more opportunities to buy again. Too much headwinds.

I am guessing the bargain for names that have net-net tailwinds in the short-term are already gone. My focus in March, throughout the liquidity air pocket crash, was to make Berkshire my second largest holding from a minor position, … i accomplished that, and have dollar set aside for add-ons. But I didn't really had a chance to focus on adding up on other positions.

The BAM family is my largest I believe, BRK is my second largest, followed by Amazon as a close third.
I think FFH family is my fourth largest.

The market may very well roll over in the next 6 months again, as the recession takes hold, but with a lower VIX, so no opportunities to get bargain due to forced selling, …. unless there is something very drastic that would re-ignite hurricane forces (very high VIX) that would create another massive liquidity crunch, whereby names with tailwinds and headwinds would all go down. 
Title: Re: DIS - Disney
Post by: fareastwarriors on May 05, 2020, 03:14:05 PM
Cut the dividend for first half. Probably wise to preserve cash.

The company had 33.5 million Disney+ subscribers as of March 28.
Disney reported that Hulu has 32.1 million total subscribers, up 27% from last year. ESPN+ also grew to 7.9 million subscribers. 



 The Walt Disney Company today reported earnings for its second fiscal quarter ended March 28, 2020. Diluted earnings per share (EPS) from continuing operations for the quarter decreased 93% to $0.26 from $3.53 in the prior-year quarter. Excluding certain items affecting comparability(1), diluted EPS for the quarter decreased 63% to $0.60 from $1.61 in the prior-year quarter.

EPS from continuing operations for the six months ended March 28, 2020 decreased 73% to $1.44 from $5.42 in the prior-year period. Excluding certain items affecting comparability (1), EPS for the six months decreased 38% to $2.14 from $3.45 in the prior-year period. Results in the quarter and six months ended March 28, 2020 were adversely impacted by the novel coronavirus (“COVID-19”) pandemic.


https://thewaltdisneycompany.com/app/uploads/2020/05/q2-fy20-earnings.pdf
Title: Re: DIS - Disney
Post by: DooDiligence on May 05, 2020, 04:17:35 PM
For all my talk about holding for the next decade, I got the jitters & sold all but a tiny bit on 30 April for $110.80 and if it plunges down to $80 again I'll start repurchasing.
Title: Re: DIS - Disney
Post by: mwtorock on May 06, 2020, 06:08:29 AM
NFLX is constantly trading at $1000 per subscriber, and they do not have a huge IP portfolio, parks, licensing, etc. Of cause DIS would not selling at 100 if no pandemic, but dtc business is growing faster than usual too. In a two to three years horizon, with a normalized environment, it is reasonable to expect DISNEY+ to get over 100m subs globally and other businesses generate tons of cash again. Obviously there are other opportunities out there in this market. We all just need to pick and choose.
Title: Re: DIS - Disney
Post by: DooDiligence on May 18, 2020, 09:40:01 AM
Is it just me or does that header image of a Mickey flower sculpture look kind of like a COVID cell?

https://thewaltdisneycompany.com/shanghai-disneyland-reopens-its-gates/

---

I'd still like to own this again but...
Title: Re: DIS - Disney
Post by: Gregmal on May 22, 2020, 03:05:31 PM
Was speaking to an analyst the other day and while talking about other names the subject of Disney came up. It seems all but certain that Disney ticket prices upon re-opening(or shortly thereafter) will be astronomical given the pent up demand seen in other places where they've re-opened. Same applies to most likely any other event/experience oriented ticket. I'd imagine this definitely helps short term, but it may also have lasting long term benefits.
Title: Re: DIS - Disney
Post by: Spekulatius on May 22, 2020, 04:07:56 PM
Was speaking to an analyst the other day and while talking about other names the subject of Disney came up. It seems all but certain that Disney ticket prices upon re-opening(or shortly thereafter) will be astronomical given the pent up demand seen in other places where they've re-opened. Same applies to most likely any other event/experience oriented ticket. I'd imagine this definitely helps short term, but it may also have lasting long term benefits.

Did ticket prices in China go up after reopening? that might be a clue. If they significantly raise ticket prices, I think there is going to be a lot of backlash and brand damage.
Title: Re: DIS - Disney
Post by: Gregmal on May 22, 2020, 04:39:07 PM
Was speaking to an analyst the other day and while talking about other names the subject of Disney came up. It seems all but certain that Disney ticket prices upon re-opening(or shortly thereafter) will be astronomical given the pent up demand seen in other places where they've re-opened. Same applies to most likely any other event/experience oriented ticket. I'd imagine this definitely helps short term, but it may also have lasting long term benefits.

Did ticket prices in China go up after reopening? that might be a clue. If they significantly raise ticket prices, I think there is going to be a lot of backlash and brand damage.

My sense, and what seems too be the thought process is that the demand is the feeler. If demand is sky high as it was when China reopened you have a runway to get there. Of course they will be sensitive about how they go about it, but it's most likely going to be a bidding war for rich folks as long as capacity is limited. Same for concerts and other high demand events. Imagine a Yankee ticket right now? The businesses will be sneaky about how they get to higher prices, but the ones Ive looked into all seem to be aware of the supply/demand imbalance. And oh yea, the millions/billions they've just lost while shut down.

https://www.businessinsider.com/disneyland-reopening-shanghai-china-pictures-2020-5
Shanghai sold out on less than a half hour.
Title: Re: DIS - Disney
Post by: bizaro86 on May 22, 2020, 06:20:21 PM
Disney wont raise prices necessarily, but I bet they'll do more exclusive ticketed events and things like that, which are effectively a price increase.
Title: Re: DIS - Disney
Post by: plato1976 on May 22, 2020, 06:37:29 PM
what will espn be worth if it's separated from disney?

Disney wont raise prices necessarily, but I bet they'll do more exclusive ticketed events and things like that, which are effectively a price increase.
Title: Re: DIS - Disney
Post by: Spekulatius on May 22, 2020, 07:47:57 PM
what will espn be worth if it's separated from disney?

Disney wont raise prices necessarily, but I bet they'll do more exclusive ticketed events and things like that, which are effectively a price increase.

Does ESPN benefit from being within Disney? I don’t think so. ESPN itself would be worth only a small multiple. Think MSGN or other cable business. 7x EBITDA maybe.
Title: Re: DIS - Disney
Post by: bizaro86 on May 22, 2020, 08:48:58 PM
what will espn be worth if it's separated from disney?

Disney wont raise prices necessarily, but I bet they'll do more exclusive ticketed events and things like that, which are effectively a price increase.

Does ESPN benefit from being within Disney? I don’t think so. ESPN itself would be worth only a small multiple. Think MSGN or other cable business. 7x EBITDA maybe.

I think Disney benefits from owning ESPN though. I suspect they get better placement and fees for their other cable networks in the bundle as a result of being able to negotiate with ESPN.

Not a huge deal perhaps, and bundle wont last forever. But I also think the ideal state for a cash cow zero growth low multiple business (like espn) is to have a good place to reinvest the cashflow.

Disney is reinvesting espn cashflow into the parks, hotels, and cruise ships at what I believe are high ROIs. That strategy is obviously being affected by covid, but I think disney travel will be durable post recovery (whenever that is).