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  • Writer's pictureHahn Lee

Disney: Inaugural Post

Updated: Jul 6, 2020

July 5, 2020


I am a long-term bull on Disney (NYSE: DIS). Despite near term challenges due to coronavirus-related park shut-downs and movie and television production delays, when it comes to intellectual property and the ability to create inspired story-telling, Disney remains unmatched. Among the large media companies, Disney has always been extremely aggressive in embracing new technologies even if it meant threatening existing business models and near term economics. I admire this organizational trait that embraces transformation and believe that Disney deserves a premium for it. (And yes, if you were wondering, I also have a soft spot for Disney, because it was my first employer out of college.)


As a digital media enthusiast, I will place my focus going forward on Disney’s Direct-to-Consumer (DTC) & International segment. This is the segment that reports the results of Disney+, ESPN+ and Hulu. To me, Disney’s valuation rests mostly in its ability to grow this business segment.

 
 

Since I am just getting back into tracking Disney and this is my first blog post about the Mouse House, I wanted to memorialize a few key milestones for posterity’s sake.


Leadership Changes

  • Kevin Mayer appointed CEO of TikTok and COO of ByteDance (May 18, 2020)

  • Bob Chapek announced as Disney CEO (Feb. 25, 2020).

Disney+

  • In November 2019, the Company launched Disney+, a subscription based Direct-to-Consumer (DTC) streaming service with Disney, Pixar, Marvel, Star Wars and National Geographic branded programming in the U.S. and four other countries.

  • Expanded to select Western European countries in March 2020 and in additional Western European countries and India in April 2020. Following these launches, Disney+ exceeded 50 million paid subscribers, including those who receive the service through wholesale arrangements in which the Company receives a fee for the distribution of Disney+ to each subscriber to an existing content distribution tier.

  • The Hotstar service in India was converted to Disney+ Hotstar, resulting in approximately 8 million additional Disney+ paid subscribers.

  • Further launches are planned for Latin America in fall of 2020, and Europe and various Asia-Pacific territories throughout calendar 2020 and calendar 2021.

TFCF Corporation Acquisition

  • On March 20, 2019, the Company acquired the outstanding capital stock of Twenty-First Century Fox (TFCF). The acquisition purchase price totaled $69.5 billion, of which the Company paid $35.7 billion in cash and $33.8 billion in Disney shares (307 million shares at a price of $110.00 per share).

  • As part of the TFCF acquisition, the Company acquired TFCF’s 30% interest in Hulu increasing Disney’s ownership in Hulu to 60%.

Disney Reorganization

  • On March 14, 2018, Disney announced a reorganization of the company into four segments:

  • Media Networks co-chaired by Ben Sherwood and Jimmy Pitaro

  • Parks, Experiences and Products headed by Bob Chapek

  • Studio Entertainment with Alan Horn remaining on as Chairman

  • Direct-to-Consumer and International headed by Kevin Mayer

Until the next Disney post...


Hahn.

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