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Iger does ESPN deal

Interesting story on a number of fronts. The Vox story focuses on how out of character this is for Disney. But this story talks more about the interactive part of it.


“We’re not necessarily looking for a cash infusion when it comes to potential partners,” Iger said. “We are looking for partners that are going to help ESPN transition to a [direct-to-consumer] model. That can come in the form of content, or distribution and marketing support, or both.”
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Iger likes interaction with consumers. That's what the theme park experience is all about. So yes, gambling is not a family activity. But it's very interactive.

The coincidental selling of Barstool Sports makes this deal more family friendly. I'm a regular reader of Barstool, and it could never exist in the same pool with ESPN or Disney. I never understood Penn's purchase of Barstool. I didn't see the value there. But this makes total sense to me.

 
Some analysts talk about the overall picture at Disney. Interesting pull quote from one:
“Perhaps the easiest way to close that gap would be to create a new company (or “newco”) with Disney’s Parks, Experiences and Products segment combined with Disney+ and the studio IP that fuels these flywheels. This asset would likely trade at a premium valuation given the high moat, iconic assets and strong revenue growth.”

The rest he would put into a separate “oldco, housing Disney’s linear networks, ESPN+, Hulu SVOD, Hulu Live TV and Disney+ Hotstar. “Given peer [stock] multiples at Fox and Warner Bros. Discovery, we have no illusions that the market will be generous in the valuation of these businesses,” Nathanson argued. “Yet, we think that the low current implied value of Disney’s non-park businesses doesn’t require anything heroic for these moves to be accretive.”

www.hollywoodreporter.com

Disney in Transition: Wall Street Divided on When Bob Iger’s Overhaul Ideas Will Pay Off

As the CEO discusses core and non-core assets, several analysts lowered their stock price targets, while others touted their belief in an improving outlook.
www.hollywoodreporter.com www.hollywoodreporter.com
 
michael hagerty said:
Some analysts talk about the overall picture at Disney. Interesting pull quote from one:
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I don't get the view that theme parks are part of the "newco." To me, that's the oldest of oldco. That's as old school as the live theater. On the other hands, what they call "oldco" are the most valuable brands. The reason Penn wants to do this deal is because of the ESPN brand, and attaching what they do to that. The brand is the value. Disney understands that. That's why early in their relationship, they started ESPN cafes and restaurants.

But here's a more cautious view from Barrons:


Jonas sees several risks for the gambling tie-up. For one, the deal can be terminated after year three, “if certain market share thresholds are not met.” To gain market share, Penn will be competing with other more established online sports-betting players like DraftKings (DKNG), which just posted a profitable quarter.
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It works on a timetable that's good for Disney. The catch in all of this is the number of states that make online gambling legal. If it grows, that's good. If not, it's bad.
 
TheBigA said:
I don't get the view that theme parks are part of the "newco." To me, that's the oldest of oldco.
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I think their view is that the parks may have up and down cycles, but there's nothing threatening the existence and concept of parks the way linear media is being threatened now.

I keep waiting for Disneyland to become "too expensive" for too many people, but the crowds just keep getting bigger. We went on two mid-week days in early November (after Halloween, before Thanksgiving break for the schools) and it was as packed as weekends used to be.

Looking at the website, if we wanted to go tomorrow, the single ticket one-day price is $169. The reported gross per day is between $11 and $20 million in ticket sales alone. And it drives merch, the kids' desire to see Disney content after the visit, and return visits.
 
michael hagerty said:
I think their view is that the parks may have up and down cycles, but there's nothing threatening the existence and concept of parks the way linear media is being threatened now.
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Really? Tell that to all of the companies that used to own theme parks that are now shut down. The only reason Disney parks have survived is because of the brand, or brands. They keep adding new branded rides that fit with what people know. But at its base, it's no different from what existed 150 years ago. Yes it's expensive. But for that price, your family is entertained all day. It's an open buffet, where they don't have to pay for every ride. It's all covered. That's why it's expensive. You go to the buffet at the Vegas casinos, and it's also expensive. But you get everything, and eat as much as you can. The other way adds up to about the same price. You go to an amusement park and pay per ride, and you get to $100 real quick. And there isn't as much variety.
 
TheBigA said:
Really? Tell that to all of the companies that used to own theme parks that are now shut down. The only reason Disney parks have survived is because of the brand, or brands. They keep adding new branded rides that fit with what people know. But at its base, it's no different from what existed 150 years ago. Yes it's expensive. But for that price, your family is entertained all day. It's an open buffet, where they don't have to pay for every ride. It's all covered. That's why it's expensive. The other way adds up to about the same price. You go to an amusement park and pay per ride, and you get to $100 real quick. And there isn't as much variety.
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You don't spend a week at Six Flags, you plan your vacations around a trip to Disney.
 
TheBigA said:
Really? Tell that to all of the companies that used to own theme parks that are now shut down. The only reason Disney parks have survived is because of the brand, or brands. They keep adding new branded rides that fit with what people know. But at its base, it's no different from what existed 150 years ago. Yes it's expensive. But for that price, your family is entertained all day. It's an open buffet, where they don't have to pay for every ride. It's all covered. That's why it's expensive. You go to the buffet at the Vegas casinos, and it's also expensive. But you get everything, and eat as much as you can. The other way adds up to about the same price. You go to an amusement park and pay per ride, and you get to $100 real quick. And there isn't as much variety.
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I phrased it poorly. I meant "Disney parks" when I said "parks". Clearly there's no parallel between Disney parks and others.
 
TheBigA said:
Really? Tell that to all of the companies that used to own theme parks that are now shut down. The only reason Disney parks have survived is because of the brand, or brands. They keep adding new branded rides that fit with what people know.
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That’s more than just a throwaway, “only” reason the parks survive. Is a methodically nurtured strategy to keep things current. Universal has caught on to that in large measure. Others have smaller scale versions where they’ve built a park into more of a multi day destination. And many others do well in their lane as day-trip parks. Yes some failed over time. That’s hardly an indictment on the entire sector.
TheBigA said:
But at its base, it's no different from what existed 150 years ago.
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It fundamentally is different. Go out to a place like a Hershey Park in PA. Yeah, century old and then some. But it bears no substantial resemblance to what it did back then.



TheBigA said:
Yes it's expensive. But for that price, your family is entertained all day. It's an open buffet, where they don't have to pay for every ride. It's all covered. That's why it's expensive. You go to the buffet at the Vegas casinos, and it's also expensive. But you get everything, and eat as much as you can. The other way adds up to about the same price. You go to an amusement park and pay per ride, and you get to $100 real quick. And there isn't as much variety.
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Depends on the parks being compared. And only the rides are covered at the theme parks. The food, speaking of buffets…is ludicrously expensive for often crappy quality chow served in far from desirable environments.

The model works because people gotta eat. But the gate price is hardly the last you’ll be emptying your wallet.
 
The suggestion seems to be basically go back to Disney as it existed pre-ABC/ Capital Cities purchase with the exception of Disney +
 
AbrahamJSimpson said:
That’s more than just a throwaway, “only” reason the parks survive. Is a methodically nurtured strategy to keep things current.
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I agree with all of that. The big part of the Disney was is synergy. Which is different from being a free-standing amusement park.

AbrahamJSimpson said:
It fundamentally is different.
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It's a gathering place where people converge for entertainment. At it's base, that's what it is. They've added to that.

AbrahamJSimpson said:
The model works because people gotta eat. But the gate price is hardly the last you’ll be emptying your wallet.
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That's up to you. I know people who avoid the food and chachkas. It can be done.
 
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