Latest news with #BobChapek
BreakingNews.ie
2 days ago
- Business
- BreakingNews.ie
Disney to pay $439m to take full control of streaming service Hulu
Disney will pay Comcast's NBCUniversal nearly $439 million (€384 million) for its stake in Hulu, taking full control of the streaming service. The move closes out an appraisal process that has dragged on for a few years. Advertisement Disney said in November 2023 that it was acquiring a 33 per cent stake in Hulu from Comcast for at least $8.6 billion. That amount reflected Hulu's guaranteed floor value of $27.5 billion, according to a regulatory filing. Disney has run Hulu since 2019, when Comcast ceded its authority to Disney and effectively became a silent partner. Hulu began in 2007 and quickly evolved into as a service backed by entertainment conglomerates who hoped to stave off the internet with an online platform for their own TV shows. Advertisement Disney joined in 2009, planning to offer shows from ABC, ESPN and the Disney Channel. A decade later, Disney gained majority control of the business when it acquired 21st Century Fox. The entertainment giant said on Monday that its appraiser arrived at a valuation below the guaranteed floor value during the initial phase of the appraisal process, while NBCUniversal's appraiser arrived at a valuation substantially in excess of the guaranteed floor value. A third appraiser was brought in and concluded that The Walt Disney Co will pay $438.7 million for the Hulu stake. 'We are pleased this is finally resolved. We have had a productive partnership with NBCUniversal, and we wish them the best of luck,' Disney chief executive Bob Iger said in a statement. Advertisement World Disney laying off several hundred employees worldw... Read More 'Completing the Hulu acquisition paves the way for a deeper and more seamless integration of Hulu's general entertainment content with Disney+ and, soon, with ESPN's direct-to-consumer product, providing an unrivalled value proposition for consumers.' The transaction is anticipated to close by July 24th. It is not expected to impact Disney's fiscal 2025 adjusted earnings forecast. Shares in Disney rose slightly in morning trading on Tuesday.
Globe and Mail
04-05-2025
- Business
- Globe and Mail
Disney: The Compelling Case for Buying Now Before They Scale Up
[content-module:CompanyOverview|NYSE:DIS] The Walt Disney Co. (NYSE: DIS) is the second-largest media and entertainment conglomerate in the world, widely recognized for its portfolio of recognizable brands, iconic intellectual property (IP), and theme parks. The consumer discretionary sector leader has managed to turn its direct-to-consumer (DTC) streaming networks business profitable. Value investors embracing the core strategy of buying low and selling high may take advantage of the low valuations. Disney is trading at a price-earnings (P/E) ratio of 29.42x and 16.46x forward earnings, compared to its average P/E of 46.58x. The growing number of catalysts and opportunities ahead underscore the potential ramp and scale-up of its multi-engine growth platform, which makes for a compelling case for buying now before it occurs. The Streaming Networks Are in the Black Disney's DTC streaming services business, including Disney+, ESPN+ and Hulu, incurred significant operating losses of nearly $1.5 billion in FQ4 2022, more than doubling its $630 million in losses in the year-ago period. This led to the immediate termination and replacement of its then-CEO, Bob Chapek, with returning CEO Bob Iger. Under his stewardship, Disney enacted a $5 billion cost-cutting plan streamlining its services and content. Implementing $5 Billion in Cost Savings While Boosting Quality Despite the fanfare behind its Marvel Cinematic Universe (MCU) Disney+ series and continuity-anchored storylines, episodes were extravagantly expensive, costing $20 million to $25 million each to produce. Additionally, its guaranteed box office blowout results also started to fade with disappointing results starting with the Phase Five release of "Ant-Man and Wasp: Quantumania." Iger decided to reduce the output of shows and movies to focus on quality over quantity. Disney also administered multiple price hikes, boosting average revenue per user (ARPU) for all tiers, including its ad-supported tier. Disney's Animated MCU Can Be 90% Cheaper Than Live-Action Series This momentum comes as Disney scales up its direct-to-consumer business with a slate of highly anticipated Marvel Cinematic Universe series. Upcoming titles include the critically acclaimed "Daredevil: Born Again," the Black Panther franchise expansions "Ironheart" and "Eyes of Wakanda," and sleeper hits such as "Marvel Zombies" and "Your Friendly Neighborhood Spider-Man." Rather than focusing on costly live-action productions, most of these new Disney+ series are animated, making them far more cost-effective. With live-action, the costs can be staggeringly high for a season, ranging from $150 million to $200 million, as they have to use the same A-list actors from their films for continuity of storylines, pay for locations, expensive CGI/VFX, reshoots, and film crews. The costs for a season with animation can range from $7.5 million to $20 million. While live action attracts more viewers, animation provides a better return on equity (ROE). Disney's Entertainment Segment Is Ramping Up [content-module:Forecast|NYSE:DIS] The DTC business is part of Disney's Entertainment segment and was instrumental in its 95% year-over-year (YOY) growth in operating profits in FQ1 2025. In addition to scaling up its direct-to-consumer operations, Disney has a slate of proven billion-dollar blockbuster franchise releases lined up for 2025, including "Zootopia 2" and "Avatar: Fire and Ash," the third installment in the "Avatar" series. Other highly anticipated films include the live-action "Lilo & Stitch," "Thunderbolts," and "The Fantastic Four: First Steps." Don't write off the merchandising revenues accompanying these films, even after Chinese tariffs. The trajectory for surpassing Disney Experiences' profits is favorable after doubling from $874 million to $1.7 billion versus flat Experiences' profit of $3.11 billion in FQ1 2025. Disney Experiences Segment Is Steady and Ready to Rise The stable nature of its Experiences segment can't be understated. When Disney lost $1.5 billion in its DTC streaming business, the theme parks business made $1.5 billion in profits to offset it. While growth has been flat, it is preparing to ramp up thanks to capital expenditures (CapEx) spending of up to $8 billion in its theme parks and cruises. Its Magic Kingdom theme parks will include its largest slate of expansion projects ever, including themes centered around "Cars," "Monsters, Inc." and Disney Villains, as well as intellectual properties in Animal Kingdom and California Adventure such as "Encanto," "Indiana Jones" and "The Lion King." Disney Cruise Line is adding seven new ships to its fleet, with Destiny and Adventure launching in 2025. Contrary to popular belief, the ships are family-oriented and kid-friendly, but aren't cheap. They are premium offerings targeting affluent consumers and households costing more than mainstream cruise lines in the transportation sector, like Carnival Corp. & plc (NYSE: CCL). Barbarians Await at Every Gate, But Disney's Moat Is Wide Disney is not without competition at every corner. In the Entertainment segment, it faces off with other studios and streaming networks from Comcast Co. (NASDAQ: CMCSA), Peacock, Warner Bros Discovery Inc (NASDAQ: WBD), Max, and the 800-lb gorilla Netflix Inc. (NASDAQ: NFLX). With its Experiences segment, it also faces off with Comcast, which is opening its new Universal Epic Adventure theme park just 15 minutes from its flagship Disney World in Orlando, Florida. Where Should You Invest $1,000 Right Now? Before you make your next trade, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
Globe and Mail
24-04-2025
- Business
- Globe and Mail
Is Disney Stock a Buy Now as Trump Tones Down Trade War Rhetoric?
With a year-to-date loss of 19.4% as of April 23, Disney (DIS) is among the bottom five constituents of the Dow Jones Industrial Average Index ($DOWI). Disney has been a consistent underperformer over the last few years, and while the stock's returns were in line with broader market last year, it underperformed in the previous three years. In response to underperformance under former CEO Bob Chapek, Disney brought back his predecessor, Bob Iger, to head the company in November 2022. The stock initially rose following the announcement, but now trades below the levels when Iger took over. To be sure, it isn't fair to blame Iger's policies for Disney's woes. If anything, under his leadership, we have seen some noticeable improvements in the company's performance, particularly in the streaming business. Specifically, Disney posted adjusted EPS of $1.76 in fiscal Q1 2025 that ended on Dec. 28, 2024, compared to $0.99 in the corresponding quarter in the fiscal year 2023, which was the first reported quarter after Iger's return. Why Has Disney Stock Dropped? The recent fall in Disney stock has been primarily due to concerns over President Donald Trump's policies taking a toll on its business. Economists raised the odds of a U.S. recession amid the U.S.-China trade war, and the rising fears of a recession are hurting stocks like DIS. Additionally, there are concerns over China retaliating against U.S. businesses, some of which we are already witnessing. For instance, China has restricted the imports of Hollywood movies. Disney operates two of its theme parks in the region - one in Shanghai and the other in Hong Kong. So far, China hasn't acted against these, but fears over Disney's business suffering in China are not unfounded, as in general, Chinese consumers are increasingly shunning U.S. brands like Nike (NKE), Apple (AAPL), Starbucks (SBUX), and Ford (F) for domestic alternatives. While Disney's prospects in China look relatively immune compared to these companies, it is still a risk that investors should be mindful of. Looking stateside, consumer sentiment has nosedived over the last couple of months while recession risks have spiked. Even if the U.S. economy can fend off a recession, the slowdown in consumer spending, particularly discretionary spending, is quite palpable. An economic slowdown and tepid consumer spending could hurt Disney's parks business. As Bernstein analyst Laurent Yoon aptly said, 'When the economy is not doing well, the parks' performance tends to follow that trend.' As for streaming, Disney might not have the same moat as Netflix (NFLX), whose business looks a lot more immune to a recession and might not be the first on the chopping block for most users. Moreover, the tourism industry – both domestic and international – could be a casualty of the trade war. A Bankrate survey in March showed that compared to 2024, fewer Americans are planning a summer vacation this year. International tourism looks even more vulnerable, and foreign tourists to the U.S. fell in double digits in March. International tourists are a key profitability driver for Disney parks as they, on average, tend to stay longer and spend more than domestic tourists. Disney Stock Forecast Wall Street analysts are, however, quite upbeat on Disney, and of the 29 analysts actively covering the stock, 21 rate it as a 'Strong Buy' while two rate it as a 'Moderate Buy.' The remaining six analysts rate it as a 'Hold' or some equivalent. Is Disney Stock a Buy? While Disney's earnings have grown significantly over the last two years, its share price has sagged, which has led to a contraction of its trading multiples. Specifically, the stock now trades at a forward price-earnings (P/E) multiple of 15.4x, which is at a discount to the average S&P 500 Index ($SPX) constituent. While Disney might see some earnings downgrades amid the tariff and economic uncertainty, I find the multiples attractive here. Disney has been testing investors' patience for the last few years, and just when it seemed the company had its house in order with the streaming business becoming profitable, it has been hit by the trade war. The Trump administration has dropped multiple hints of reconciliation with China even as the world's second-largest economy has denied any ongoing trade talks with the U.S., insisting on the withdrawal of what it calls 'unilateral' tariffs. There is no easy fix for the U.S.-China tariff war, but these fears should eventually abate, and at these levels, the downside looks quite limited for DIS stock given the valuation comfort.
Vox
04-03-2025
- Entertainment
- Vox
The controversy over Disney's new Christian character, briefly explained
Disney has added an explicitly Christian character to Pixar's new series Win or Lose . That might not be head-turning in isolation, but it comes just months after nixing a transgender character's storyline from the same show, and amid a cultural wave of pushbacks to diversification, both for Disney and the country at large. Now fans online are speculating about exactly what this latest move might mean. Is Disney entering a new conservative era, or is this just all business as usual? Let's take a look. Pixar's series, which debuted on Disney+ at the end of February, follows a team of preteen softball players, with each episode focusing on a different character. Reports about what actually happened to Win or Lose 's trans character seem to be in conflict. In December, the Hollywood Reporter reported that Disney characterized the changes as simply removing 'a few lines of dialogue that referenced gender identity' from one character's storyline. But as Deadline reported, Pixar had explicitly sought a trans voice actress to play the role, and she later described herself as 'very disheartened' by the change. Some media reports have been oversimplistically juxtaposing the two decisions, either lamenting or celebrating the Christian character as a repudiation of the trans one, when of course, there can be overlap between religion and gender identity, and the Christianity portrayed in the show doesn't take a position on the issue. Yet in a larger context, there are some grounds for questioning the company's motives. Disney has spent decades battling pushback from conservatives over its LGBTQ inclusivity, most recently over its hostile response to Florida's 'Don't Say Gay' law. The feud resulted in backlash on all sides, both for Florida and for then-Disney CEO Bob Chapek, who was subsequently given the boot in favor of his predecessor, Bob Igor. Igor's second tenure over the company has been markedly less progressive. In November 2024, the Disney channel pulled an episode of the Marvelverse show Moon Girl and Devil Dinosaur that featured a trans character. And this week, Disney+ canceled Tiana , a series sequel to animated film The Princess and the Frog, even though it had been underway since 2020. The film featured Disney's first Black princess (Anika Noni Rose, who was reprising her role) — but the Mouse said this decision was about moving away from long-form streaming content rather than pulling back from shows with diverse casts. (For other recent diverse examples across the Disney empire, see Moana 2 and Agatha All Along .) That hasn't stopped audiences across the political spectrum from making connections to what they see as a bigger change afoot. One frustrated fan described the cancellation of Tiana as 'pure antiblackness.' 'Openly gay out. Openly Christian in,' was how another Twitter user framed Win or Lose ; yet another cheered the removal of the trans character and the portrayal of the Christian character as 'what winning looks like!' In its current incarnation, however, Win or Lose isn't easily a 'win' for regressive politics. The show is not exactly pushing any barriers, but it's far from proselytizing. The first episode shows a kid, Laurie, praying out loud to 'Heavenly Father' as she waits for her turn to bat — but then she goes home and greets her tarot-reading, crystal-wearing mom. Meanwhile, there has been conservative upset online about another character: a Black mother who twerks. What these character decisions add up to for the company's future is unclear. Ultimately, this doesn't seem like a situation where anyone has to win or lose. See More: Culture Internet Culture Life Religion TV
