- ESPN: The ESPN networks represent 45% of Disney's value. Consisting of a myriad of cable channels, radio, and website functions, ESPN continues to refine its products and grow. Subscription fees are on the rise and ad revenues continue to jump. The growth of the NFL and NCAA football have contributed to much of the success and these sports are only getting stronger. ESPN has been smart to stay clear of overpriced NHL and MLB contracts while still giving their views talk and perspective on the sports. Last quarter, the ESPN segment of Disney missed its revenue targets due to some revenue recognition timing but full year outlooks remained strong.
- Avengers: With the Avengers, the income of Disney's film studio unit grew from $49 million the year prior to $313 million. Disney will continue to monetize the Avenger craze as they signed Joss Whedon (writer of Avengers) to write a second Avengers movie. To go with it, a new ABC (who is owned by Disney) series based on the Marvel comics characters is also being created. I have yet to mention the deals made to create 4 addition movies over the next 2 years like IronMan 3 and Thor: The Dark World. To further capitalize on the viewership of the Avengers craze, Disney is adding the Marvel characters to its theme parks. Through various channels, Disney will be able to cash in on Avengers for years to come. During Iger's tenure, Disney stock is up 80%
- Bob Iger: When Mr. Iger took over as president and CEO of Disney, the Disney brand was struggling. He showed up to his 1st board meeting with a plan to buy PIXAR and Disney has not looked back. Iger is also responsible for the Disney acquisition of Marvel which is the reason for the Avengers craze mentioned in #2. Not only that, but Iger has increased the global exposure for Disney. The Disney channel is now broadcast in 167 countries and a foothold into China is just beginning. Maybe the only negative that Iger brings to the table is that he will resign as president in March of 2015.
With these 3 tailwinds behind Disney, the stock should continue to grow in the years to come.
Disclosure: I am long DIS.