They sure are. The company has issues in every one of its business lines and what to do with ESPN is one of the biggest. Bob Iger has said that he wants to spin off ESPN as a standalone direct-to-consumer service. Frankly, there is no way that entity can be profitable by itself without a massive increase in net revenue. They can either demand more revenue from carriers or seek concessions on package values with leagues and conferences. But that leaves them vulnerable to competitors like CBS, FOXSports and NBC. And some of those guys have streaming platforms they'd like to build. And they can undercut Disney for a year or three. And there's always Amazon, Warner Bros/Max, Netflix and YouTube TV.
What to do with Hulu is another thing. Comcast (parent of NBC) has a put option on the 30% stake it owns in the service. They will execute that option this year and Comcast has the right to decline negotiations and just send the invoice. Hulu is how I watch what I used to watch on cable and DirecTV. It's nice but very pricey and going higher.
Parks attendance is ok but not growing much. Films are underachieving in theaters. The company was the target last year of activist investor Nelson Peltz (current CEO of Wendy's) who demanded a seat on the board of directors when Iger was re-hired as CEO. He also demanded steep cost cuts and the firing of long-term execs. He set up a proxy fight for the company's annual shareholder meeting and started acquiring beaucoup shares and votes. He gave the stand-down order just before the vote was to happen when Iger gave up everything except the board seat for Peltz.
Things are only gonna get worse. They have chosen to take sides in a hotbutton political issue that is serving to alienate about half of its customer base. Not getting into that here except to say that if some cultural or political issue in the public sphere doesn't affect your business financial results, the best response is always "no comment." Biz Comms 205...
The stock (Ticker: DIS) hasn't paid a dividend since December 2019. It reached an all-time high of about $206 in early 2021 and is trading in the low $80's now. Total market cap is about $150 billion and if it gets into the $70/shr range it's an acquisition target for companies like Apple, Amazon, Microsoft...
I only hammered out this long post to show that how we pay for and watch college football next season will be very, very different from next year. ESPN may be owned by someone else and who knows what it will cost to watch the 3td Saturday or Iron Bowl next year.
