Disney is almost certainly the world's most widely known and best-trusted entertainment brand. After years of ailing performance following the death of its founder, it found a whole new lease of life in the 1980s by reinventing the concept of the animated family movie. The huge popular success of The Little Mermaid, The Lion King and others encouraged the group to spread its wings into other areas; a key development was the takeover of Capital Cities/ABC to create one of the world's biggest media conglomerates. But by the end of the 1990s a good deal of the shine had come off the company's prestige as the house of mouse was rocked by management rows and lacklustre performance from both its core movies division and the ABC Television Network. The years of rumbling discontent culminated in a rift in the group's board, followed by an unexpected (but unsuccessful) takeover bid from cable giant Comcast. Peace was finally restored in 2005 when divisive CEO Michael Eisner agreed to step down in favour of his deputy Bob Iger. Performance continued to be mercurial for a few years, buffeted by recessionary forces, declines in DVD sales, and several under-performing movie releases. In fact, the group's most consistently profitable subsidiary for several years was not its high-profile movies, parks or ABC divisions but top-rated cable sports network ESPN. Disney finally got into its stride again with the takeover of Marvel and the astonishing success of the various movies inspired by its diverse collection of superheroes. In an even more startling move, it announced at the end of 2017 a deal to acquire most of entertainment rival 21st Century Fox for what was finally a price tag of $71.3bn in stock and debt. The group reported another year of record revenues and profits for the year to Sept 2018. Group revenues were $59.4bn with net income of $12.6bn. Bob Iger remains chairman & CEO of Walt Disney, and has led the aggressive expansion of its entertainment portfolio through acquisitions of Pixar, Marvel, Lucasfilm and 20th Century Fox, among others. He is unquestionably the most powerful figure in the global entertainment industry. He had been expected to step down in 2018, but postponed that move in the wake of the Fox takeover.
Capsule checked 30th July 2019
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Historical profile information for Walt Disney Company
Adbrands Daily Update 14th Nov 2019: A day after the official launch of its Disney+ streaming service, Walt Disney said it had already signed up in excess of 10m subscribers. On the face of it, that's an exceptionally strong start, but Disney had been running discounted promotional offers for three months ahead of the launch, and has agreed a partnership with Verizon to offer the telecoms group's customers their first year free of charge. As many as 17m Verizon customers are eligible for that deal; neither group has said how many have already signed up. Disney has itself said it aims to sign up between 60m and 90m subscriber worldwide by 2024. Disney's share price touched record highs of just under $150 on the back of its recent strong financial performance and the Disney+ launch.
Adbrands Daily Update 8th Nov 2019: Strong growth across all its existing divisions, plus an additional lift from the consolidation of Hulu and the newly acquired Star India satellite channel, boosted Disney's revenues for the year ended Sept to a new high of $69.6bn. Revenues for the final quarter alone jumped by more than a third overall, and by more than 50% in the studio entertainment division. However costs associated with Hulu, investment in the ESPN+ streaming channel and the launch of Disney+ ate into profits, which slipped back from the previous year's record highs to $11.1bn. The biggest weakness has been the poorer than expected performance by the Fox movie division. Disney's own movie business was enhanced over the summer by the spectacular success of The Lion King, Toy Story 4 and Aladdin. By contrast, Fox had a series of flops including Ad Astra and X-Men: Dark Phoenix.
Adbrands Daily Update 15th Oct 2019: Omnicom Media Group retained the bulk of the business of Disney's North Amerian media channels following a major global review worth over $2bn in billings. That includes the Disney, Fox, Pixar, Marvel and other movie studios as well as ABC, ESPN and other broadcast and cable strands. A new dedicated agency, OMG23, is being created to manage the business. However, Publicis Media has been awarded all international entertainment assets as well as the soon-to-launch Disney+ streaming service worldwide and Disney's global Parks & Resorts division, previously held by Carat. It's an important counter to the Groupe's poor Q3 results, unveiled earlier than expected last week. (Was the timing arranged to get the bad news out of the way in time for this week's good news?) WPP is reported to have retained Disney's business in India.
Adbrands Daily Update 15th May 2019: Comcast agreed to transfer full operational control of Hulu to Disney in return for a five-year partnership agreement running until Jan 2024. The two sides will divide WarnerMedia's recently reacquired 10% stake between them, lifting the equity split in Hulu to Disney 66% / Comcast 33%. Comcast will continue to license NBCU content to the platform during that period, and will also carry Hulu on its Xfinity service. In 2024, a reciprocal put/call option comes into effect whereby either side can force the transfer of Comcast's remaining stake to Disney for a minimum valuation of $9bn. That figure could go higher, subject to an independent valuation of Hulu. NBCU CEO Steve Burke called the deal "a perfect outcome for us... the extension of the content-licensing agreement will generate significant cash flow for us, while giving us maximum flexibility to program and distribute to our own direct-to-consumer platform."
Adbrands Daily Update 10th May 2019: So much for the irresistable rise of upstart media company Vice. In its latest quarterly results, Walt Disney disclosed that it has written off the entire value of what is now a holding of around 30% in the fast-fading challenger brand. Disney acquired 21% of Vice in 2015, and inherited further shares in its takeover of 21st Century Fox. It wrote off $157m in value at the end of 2018, and the remaining $353m in the most recent quarter.
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