Disney Digest 7/16/24 (Media Mergers, D23 Shopping, and More)

M&A

Recently, moguls of various industries congregated at Sun Valley for the annual summer camp for billionaires. This is where major media deals have occurred over the years, including Disney’s acquisition of ABC. But attendees to this bizarre retreat have been documented to agree on one thing. Outside of the unusual circumstances surrounding Paramount, there have been very few media deals over the past few years.

Current FTC Chair Lina Kahn has chilled all merger and acquisition activity as she has renewed legal challenges to potential deals. But despite the threat of regulatory issues, entertainment companies feel the need to evolve in order to challenge technology companies such as Amazon, Netflix, and Apple. In fact, while Warner Bros Discovery was undergoing another round of layoffs, Bank of America analysts shared that they do not believe that the company in its current form is working. The conventional wisdom is waiting for the election to get a sense of what the regulatory situation will be come January. While Kahn is known for her aggressive posture, under Trump, the FTC also sued to prevent the eventual AT&T-Time Warner deal. By the time the deal went through, it was basically undone when the telecom spun it off to merge with Discovery. During the years that process took, the entertainment industry went through a major transformation, and the media assets were bringing down AT&T. This brings home that even if the FTC may not win, their delays can freeze companies while the industry is in need of massive changes.

Disney got ahead of some of the secular decline of the business with their acquisition of 21st Century Fox. While it is debatable if this deal was good for Disney, there is no doubt that the pairing of Disney+ and Hulu has allowed Disney to be considered in a position to succeed while its peers in Max, Peacock, and Paramount+ are desperate to find a path forward. In fact, according to Nielsen, more minutes are spent watching Disney offerings than any other company, including Netflix.

Will Disney do another major acquisition if there is a change at the FTC? It is hard to tell. They could also look outside of content companies for their next growth initiative. As Live Nation is also under the FTC’s microscope, perhaps Disney will extend their theme park operations know-how to other types of venues. But after the media landscape was focused on the troubles at Paramount and now the problems at Warner Bros. Discovery, Disney is avoiding the doom and gloom narrative. This doesn’t mean Disney stock isn’t down or that Disney needs to figure a path forward. It just means they are in a better position than many others. I don’t know when Disney will roll-out their vision for growth of the entire company, but they have a luxury that both Paramount and Warner Bros. Discovery do not: time.

Let’s Go Shopping

Today, D23 announced all the shopping offerings at their upcoming event. They have wiseley moved the retail operations to the North Hall which will give it plenty of space to allow for additional capacity and hopefully an improved shopping experience.

While there is always a lot of fun merchandise, such as the Pluto Corner collectible that is on my list, it is time for my annual PSA: Do not let the success of your D23 experience rely on getting any particular piece of merchandise. While we all love our tangible memories, the retail operations at these events are often flawed and poorly thought out.

Don’t miss a once in a lifetime panel, concert, or experience due to the pursuit for yet another Disney collectible. The merchandise means something to you because it recalls Disney memories from the past. Try and make creating new memories your priority. There will always be some merchandise available to remind you of this special event after the initial rush. Merchandise is good, but magical moments are even better.

Remembering Sully

We lost another Disney Legend with the passing of Bill “Sully” Sullivan. While I never worked with Sully, while I was at Disney World stories of his commitment to quality and the guest experience were legendary. Whenever we missed the mark by not following through on the quality Disney is known for, an old-timer would shake their head and say “Sully would never allow this.”

Many of my great leaders were inspired by Sully. Those leaders inspired the great leaders of today. In my opinion, whenever you see a Disney executive who is committed to doing the right thing, a line can be drawn back to Sully and other leaders of his ilk. My thoughts go out to his friends and family. His legacy will live on and he will never be forgotten.

Quick Hits:

6 Thing to Watch for Tomorrow:

As you can see, there is a lot happening tomorrow. See you tomorrow night to break it all down.