Author Topic: DIS - Disney  (Read 79101 times)

DooDiligence

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Re: DIS - Disney
« Reply #260 on: October 13, 2020, 08:33:20 AM »
Dan Loel letter to management:

https://www.scribd.com/document/479102830/Loeb-Letter-to-Disney

The buying opportunity (if they cut the dividend) would be tremendous. I prob should've held my sub $100 cost shares but sold when it was bumping a 52 week high, expecting another round of drops.

They've survived multiple disasters including having an alligator eat a baby on one of their properties. In hindsight, covid will likely be hailed as the accelerant to their transition into a more defensible & profitable moat.
AFL // BRK.B // CLB an incredibly stupid move // EW // GPC // MO // MTB // NVO // PSX // TRMD // VDE // VLGEA // WFC

Investable cash 22% + 18 months of survival $


flesh

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Re: DIS - Disney
« Reply #261 on: October 13, 2020, 02:43:27 PM »

rogermunibond

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Re: DIS - Disney
« Reply #262 on: October 14, 2020, 07:07:11 AM »
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 donít 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).

You left out the Fox acquisition which is a huge use of Disney cash flow.  ROI on that is TBD

DocSnowball

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Re: DIS - Disney
« Reply #263 on: October 14, 2020, 02:08:25 PM »
The strategy shift is significant, and will need capital investment - not just from cutting dividends but also some reallocation of capital. Disney has built it's business in the Bob Iger era by buying up "pieces of childhood" icon figures. While that worked in the past, Disney+ is their best way to stay relevant with kids and their families in this new era.

As a parent of two young kids, I'm one of the 60 million plus new subscribers. The content feels much like early Netflix streaming days, you can watch for a few weeks and then get saturated. They'll need to come up with new series that keep viewers hooked, but with their wealth of characters that should be doable. There was interesting discussion about other aspects of the flywheel during the CoBF meetup which I greatly appreciated - gaming, virtual reality etc. Not saying that's happening now but that there is enough to keep the flywheel going long term as long as a loyal band of users is there.

Two questions - one is their debt, although not that high (total debt 55.4 billion out of market cap of 213 billion, around 1 B in long term interest and another 1B in uncapitalized leases), what is the risk of dilution if losses continue in 2021? Second, what are the catalysts? Is it pricing, when the market starts to value the long term $$$ each user can generate?