Disney Park Activist Play With 200% Return Potential
Jan Martinek • 18 Comments
Jan Martinek • 18 Comments
Time To Short Disney: Horrendously Expensive And Misunderstood
J Mintzmyer • 397 Comments
J Mintzmyer • 397 Comments
Yesterday, 5:42 PM
- Another slow weekend for films ended with a remake of The Magnificent Seven (SNE -0.4%) topping the box office by beating some animated counter-programming.
- Sony's new take on the Western grossed $34.7M to top the week's other wide debut, Storks (TWX -0.8%), which drew $21.3M. Both films edged last week's leader, Sully (NYSE:TWX), which fell to third with $13.5M. It's grossed $92.1M domestically in its three weeks of release.
- Sequel Bridget Jones's Baby (CMCSA -2%) fell off in its second weekend, dropping to No. 4 with just $4.7M.
- Storks is the second film for recently assembled Warner Animation Group, after The LEGO Movie.
- Among longer-running high grossers still in theaters: Suicide Squad (TWX) was No. 8 with $3.1M (cumulative domestic of $318.1M; worldwide total of $731.8M); Pete's Dragon (DIS -1.4%) was No. 13 with $870K (cumulative domestic of $74.2M; worldwide total of $122.4M); The Secret Life of Pets (NASDAQ:CMCSA) was No. 15 with $692K (cumulative domestic of $364.3M; worldwide total of $820.9M).
Yesterday, 3:32 PM
- With Salesforce (reportedly working with Bank of America) (CRM -0.2%), Alphabet (GOOG, GOOGL) and The Walt Disney Co. (DIS -1.3%) rumored to be in the mix, Twitter (NYSE:TWTR) is said to be gearing up to present itself to potential acquirers.
- While a bid by Salesforce is seen as unlikely and unfavorable by some (Citi, Morgan Stanley), last Friday it appeared firmly in the mx. Alphabet, meanwhile, is considered a favorite by others, with the available cash, advertising expertise and social network tie-in possibilities to make Twitter work under a new parent organization. Now that Disney is the latest to reportedly join the group, sports, distribution and video prospects are being weighed.
- Trading up more mildly than Friday's run on this development, it appears analysts, investors and Twitter itself are unsure of what direction the company will take next. The negative reaction of Salesforce shares on Friday and Disney shares today, though, may signal difficulty in attaining favorable terms for all parties involved in a deal should one come closer to materialization.
- Update (3:41 PM ET): CNBC's David Faber adds Microsoft (MSFT -0.8%) in as a potential bidder.
Yesterday, 2:28 PM
- With stocks moving on a report that Disney (NYSE:DIS) is talking to advisers about a possible bid for Twitter (NYSE:TWTR), Disney chief Bob Iger last week gave a clue to one aspect of synergy: Twitter's moves into video.
- Speaking at the Goldman Sachs Communacopia Conference last week, Iger pointed out that "new entrants" to sports broadcasting (obliquely including Twitter, which is streaming Thursday Night Football) will have a rough time competing against incumbent owners of sports broadcasting rights, most prominently Disney's ESPN.
- "Nobody can monetize sports better than ESPN," he said. "If you think about [new entrants] in terms of direct competitors to incumbent sports rights owners," not just ESPN but NBC, CBS, Fox, Turner -- new entrants "have the capital, but would dig deep into their pockets and do something that would be a loss leader and then some. It's gonna be hard for them to compete on an equal playing field, no pun intended."
- Meanwhile, he said the company's $1B investment in streaming firm BAMTech was an "enabler" for Disney in digital video, and that the company's moves are all about an effort to "reach more sports fans" -- a timely opportunity considering Twitter's audience for Thursday broadcasts rose 34% from the prior week, but with a lot of room to grow (327,000 average users per minute, up from the prior week's 243,000).
- After the volume spike in both stocks, TWTR now up 0.8%; DIS down 1.6%.
Yesterday, 1:55 PM
- Twitter (NYSE:TWTR) is back on the move, up 1.4%, on reports that Walt Disney (NYSE:DIS) is working with financial advisers to consider a possible bid for the messaging service.
- Disney, for its part, has turned further down on the news, -1.8%.
- Previously: Morgan Stanley considers Salesforce, Twitter deal probability low (Sep. 26 2016)
- Previously: Citi considers Twitter, Salesforce deal unlikely (Sep. 23 2016)
- Previously: Twitter +17% pre-market, M&A speculation recirculating (Sep. 23 2016)
- Developing story ...
Fri, Sep. 23, 7:17 PM
- Dalian Wanda -- the conglomerate topped by China's second-richest man, billionaire Wang Jianlin -- is ramping up efforts to battle Walt Disney's (NYSE:DIS) Shanghai theme park on the eve of opening a second Wanda City destination.
- Set to open tomorrow, the $5.2B Hefei Wanda City is the second of 15 projects -- a "pack of wolves" that can beat Disney's "tiger," Wang says -- planned to open by the end of the decade. Set about 311 miles west of Shanghai Disney Resort, the development includes not only theme-park facilities but hotels, residences, a movie theater and a shopping mall.
- The first Wanda City opened in southeastern China's Nanchang three months ago; Wanda estimates it will bring 10M visitors a year. It drew 2M visitors in its first month, while it took Disney more than a month to get to 1M visitors.
- Wanda (which was spurned in an effort to buy a minority stake in Paramount Pictures) is reportedly close to a motion picture alliance with Sony.
- Meanwhile, at the Communacopia Conference this week, Disney chief Robert Iger said Disney Shanghai was "well received by the Chinese consumer": "They love this park ... we have attractions and shows that are off the charts in terms of popularity."
Wed, Sep. 21, 12:28 PM
- Segueing from sports broadcasting to the rest of Disney's (DIS -0.9%) TV business at the Communacopia conference, CEO Robert Iger said he couldn't provide headlines on their approach: "We have two goals: One, make great product, and two, monetize it best we possibly can."
- The Shanghai park opening has been a solid success, he says. Visitors in the first 100 days were strong, and what the company has learned from its frequent surveys is that "they love this park ... we have attractions and shows that are off the charts in terms of popularity; they’re staying a lot longer per visit then we have expected, by a lot, by almost two hours."
- "The fact that it is well received by the Chinese consumer" -- and Iger says the visitors have been overwhelmingly Chinese -- "is a great thing for not only the Disney theme park brand but for Disney [overall] in that marketplace."
- Back in the U.S., there's been "no discernible impact" from Zika Virus in Florida, he says.
- What's the "Disney difference" in films? After seeing some "very sobering returns" over the decade prior to when he took the job, the company decided to focus on quality over quantity. There were "too many movies being made, too many bets being made, too much money being spent."
- "Let's make fewer, and make bigger bets. Tentpole films had the ability to be leveraged more across the world, and China is a great example of that ... We got out of the Miramax business, got out of the Touchstone business, because returns on the Disney brand were strong, so: Make Disney."
- On interactive products: After getting out from interactive toy/game Disney Infinity, the approach will likely continue to be "license, not make."
Wed, Sep. 21, 12:16 PM
- Discussing digital TV, sports, parks and films in a discourse at the Communacopia conference, Disney (DIS -0.7%) chief Robert Iger said the company invested $1B into streaming firm BAMTech as an "enabler."
- Digital video is "growing and it's growing significantly ... what BAMTech represented for us, particularly for ESPN, is as an enabler of sorts -- and a very high-quality one." Sports is something a lot of people are passionate about, "particularly young men; they use mobile devices very frequently."
- "We're not doing this because the current business model is crumbling," Iger says. "We're doing it to reach more sports fans."
- New aspirants for sports rights will have a tough time against incumbents, he says: "Nobody can monetize sports better than ESPN ... If you think about [new entrants] in terms of direct competitors to incumbent sports rights owners," not just ESPN but NBC, CBS, Fox, Turner -- new entrants "have the capital, but would dig deep into their pockets and do something that would be a loss leader and then some. It's gonna be hard for them to compete on an equal playing field, no pun intended."
- "There can't really be a new entrant offering a side-by-side product for almost all of what ESPN has," he added.
Mon, Sep. 19, 12:44 PM
- Viewership of the Emmy Awards looks to have hit a new low, declining slightly from last year's record -- and reflecting a trend in award shows in general.
- The broadcast on ABC TV (DIS +0.4%) got an 8.4 rating in preliminary overnights, slightly lower than last year's, which eventually figured to 11.9M viewers. That was the least-watched show in the 68-year history of the awards.
- This year's broadcast was, however, running against regular winner Sunday Night Football on NBC.
- In February, viewership of the Oscars (also on ABC) slid 6% and hit an eight-year low.
Mon, Sep. 19, 3:06 AM
- Hollywood Reporter discusses the entertainment industry's fears of a Netflix (NASDAQ:NFLX) content monopoly.
- Netflix is spending $6B/year on creation, and was nominated for 54 Emmys.
- Incumbents (TWX, DIS) worry they won't be able to compete in bidding wars.
- On the flipside, some note that Netflix's huge spend on new content will continue to drive subscription price increases, which will take a toll.
- Read the full article on Hollywood Reporter. Come back here to discuss.
Fri, Sep. 16, 7:01 PM
- Disney (NYSE:DIS) has hired veteran executive Bruce Rosenblum to lead business operations for Disney/ABC Television -- a piece of the business under pressure as the industry adjusts to shifting viewing patterns and the competition of streaming services.
- The move's effective Monday. Rosenblum spent 26 years as president of Warner Bros. Television, and at Disney he'll oversee global distribution, affiliate sales and digital media strategy for the TV group.
- ESPN has been fighting discouraging numbers in carriage and pay TV subscribers, but Rosenblum's role won't include oversight of the sports network.
- A key part of his job, Rosenblum says, will be working with Disney's consumer insights group to pursue new business outside of traditional pay TV distribution.
Wed, Sep. 14, 9:26 PM
- Disney (NYSE:DIS) cut 5% of its consumer products and digital media staff on Wednesday (about 250 jobs).
- While small for a company of Disney's size (180K employees), small-sized layoffs have been frequent at the company in recent months.
- After a period of blistering growth fueled by the “Frozen” and “Star Wars” franchises, Disney Consumer Products and Interactive Media has recently become an area of concern for some analysts.
- via NYT
Wed, Sep. 14, 10:14 AM
- Turner Broadcasting (TWX +0.3%) has reached a comprehensive deal with Walt Disney (NYSE:DIS) making it the exclusive basic-cable home of the lucrative Star Wars franchise.
- A huge pact with Disney covers 10 films, including new and upcoming outings, and five of the six original films. A separate deal with 20th Century Fox (FOX +0.5%, FOXA +0.4%) also covers 1977's Star Wars: A New Hope, giving Turner rights to 11 films in total.
- TNT and TBS will be the network home of the films, including premiere windows for last December's Star Wars: The Force Awakens and the upcoming Rogue One: A Star Wars Story.
- Wasting no time, TNT is kicking off six nights of the programming next Tuesday, beginning with prequel film The Phantom Menace and proceeding through the first six films in story order. Another broadcasting push will follow in December, alongside the release of Rogue One.
Tue, Sep. 13, 8:22 PM
- NBC (CMCSA -1.5%) took advantage of the return of football season to take a dominating win in TV ratings this week, with a little help from politics as well.
- It averaged 11.1M prime-time viewers, far ahead of ABC's (DIS -1%) 4.5M. CBS (CBS -1.7%) averaged 4.2M viewers, and Fox (FOX -1.9%, FOXA -1%) 2.15M.
- Football matchups made up the week's top two programs, and related shows took other top spots. A season-opening Super Bowl rematch between the Carolina Panthers and Denver Broncos drew 25.19M viewers for NBC, while New England at Arizona got 23.08M.
- Those two games were followed in the top 10 by the Thursday NFL Pre-Game Show on NBC, with 18.51M; the Sunday NFL Pre-Game Show, 17.67M; and Thursday's Commander-in-Chief Forum, with 14.72M.
Wed, Sep. 7, 6:44 PM
- Fox News (FOX -0.6%, FOXA -0.2%) sits again in a familiar spot, atop the prime-time ratings for cable networks.
- The network -- despite being buffeted by the sexual harassment scandal enveloping its former chief, Roger Ailes -- drew 2.1M viewers on average during the first week of the fall season, well outpacing HGTV (SNI +0.2%) at No. 2, with 1.5M viewers.
- ESPN (DIS -0.1%) and USA Network (NASDAQ:CMCSA) tied for third place with 1.4M viewers.
- On a full-day basis (usually the stomping grounds of children's programming), Fox News also led, ahead of Nickelodeon (VIA +2.6%, VIAB +2.5%) and Adult Swim (TWX +0.4%) among others.
- In individual programming for the week, an episode of Hannity on Fox News topped the charts with 5.2M viewers, ahead of Rizzoli and Isles on TNT (NYSE:TWX) and Saturday college football on ESPN.
Tue, Sep. 6, 1:46 PM
- Wrapping the traditional summer movie season, thriller Don't Breathe (SNE +2.4%) again outstripped its small budget and topped the box office with little new competition in theaters.
- The film drew $19.6M over the four-day U.S. holiday weekend to bring its two-week domestic total just shy of $55M, and it easily topped Suicide Squad (TWX -0.4%), which with $12.8M still crested the $300M mark in its fifth week.
- Completing the top five: Pete's Dragon (DIS -0.7%), No. 3 with $8.6M ($66.3M in four weeks); Kubo and the Two Strings (NASDAQ:CMCSA) with $8.5M ($36.4M in three weeks); and Sausage Party (NYSE:SNE), with $6.5M ($89.6M in four weeks).
- New films had little impact: The Light Between Oceans (NYSE:DIS) grossed $5.9M, good for eighth place, while No Manches Frida (LGF +0.3%) took $4.65M for 12th. Morgan, a sci-fi thriller from Fox (FOX -0.8%, FOXA -1.3%), disappointed with $2.4M (18th place) despite opening in more than 2,000 theaters.
Thu, Sep. 1, 2:31 PM
- Every stock seeks market equilibrium, but some buyers and sellers are more intense than others and media stocks are no exception, says Bernstein's Todd Juenger -- pointing to "tug-of-war" between investors in Walt Disney (DIS -0.4%), Lions Gate (LGF -3.2%) and Twenty-First Century Fox (FOX -0.2%, FOXA).
- "A thing about tug-of-war matches – they can last a long time, especially with two evenly matched, very strong sides competing against one another," Juenger and team write. "But eventually, one of the sides will tire, and end up covered in mud."
- The fight at Disney (rated Market Perform by Bernstein) is between media specialists who think the stock's too expensive and (mostly) long-only consumer generalists who see it as a big bargain. In the case of Lions Gate (Market Perform), it's all about some investors' belief in "Malone math" to generate synergies from John Malone's machinations, vs. valuation fundamentalists.
- And for Fox (Outperform), a battle between "value-oriented investors who see it has having an especially low valuation relative to the quality and growth of its assets; versus those who believe it is just another troubled media company with ever-decreasing earnings estimates, trading about where it always does."