THE WALT DISNEY The Walt Disney Company, commonly known as Disney, is an American diversified multinational mass media and entertainment ...
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THE WALT DISNEY The Walt Disney Company, commonly known as Disney, is an American diversified multinational mass media and entertainment conglomerate headquartered at the Walt Disney Studios complex in Burbank, California
• Disney was originally founded on
October 16, 1923, by brothers Walt and
Roy O. Disney as the Disney Brothers
History Cartoon Studio; it also operated under
the names The Walt Disney Studio and
Walt Disney Productions before officially
changing its name to The
Walt Disney Company in 1986.
THE MEDIA EMPIRE
ANY MOATS: YES, WIDE MOAT
RIGHT
BUSINESS?
The magical and unique “ECONOMIC
MOAT”
Revenue segment on 28 March 2020 result VS 30 March 2019 (1yr)
Revenue segment dated on 28 Revenue Segment dated on 30
March 2020 March 2019
Direct
Studio Consumer
Entertaiment 8%
Direct 14%
consumer
21% MEDIA Media
NETWORK Network
38% 37%
Park
studio Experience
enterttainme Park and products
nt Experience 41%
13% and products
28%
Media Network: +1%, Park Experience& Products -13%, Studio
entertainment -1%, Direct consumer +13%
Revenue segment on 28 March 2020 result VS 28 Dec 2019 (Quaterly)
Revenue segment ended on 28
Dec 2019
Direct
consumer
product
18% Media Network
Studio 32%
Entertaiment
17%
Park
Experience &
Products
33%
Media Network Park Experience & Products
Studio Entertaiment Direct consumer product
Media Network: +6%, Park Experience& Products -5%, Studio
entertainment -5%, Direct consumer +3%
DISNEY BIGGEST COMPETITORS BASED ON SEGMENTS: DISNEY MEDIA NETWORK VS Comcast, Sony & Viacom.CBS PARK EXPERIENCE AND PRODUCT VS Six Flags Entertainment (SIX), Cedar Fair (FUN), Universal Studios and Comcast. Disney Studio entertainment: Lucasfilm, Paramount Pictures, Blue Sky, Sony Pictures, Universal Studios, Warner Bros., Lionsgate, Viacom.CBS and Cartoon Network Disney Direct consumer vs Netflix
Disney market share: Cable network and media network
Market share: Consumer Products
Market share: Studio Entertainment
2020 movies
Direct consumer market share
Plenty of show and movies in Disney +
Right Number: Yes
Share repuchase
Covid 19 impact on the
earning sectors20-23
26
March :Dip
June:
to $85.76-
$109
$85.98Revenue Segment
Parks, Experiences and
ProductsTheme parks and resorts, which include: Walt
Disney World Resort in Florida; Disneyland Resort in California;
Disneyland Paris; Hong Kong Disneyland Resort (47% ownership
interest); and Shanghai Disney Resort (43% ownership interest),
all of which are consolidated in our results. Additionally, the
Company licenses our intellectual property to a third party to
operate Tokyo Disney Resort. Disney Cruise Line, Disney Vacation
Club, National Geographic Expeditions (73% ownership interest),
Adventures by Disney and Aulani, a Disney Resort & Spa in
Hawaii, Licensing of our trade names, characters, visual, literary
and other intellectual properties to various manufacturers, game
developers, publishers and retailers throughout the world Sale of
branded merchandise through retail, online and wholesale
businesses, and development and publishing of books, comic
books and magazines (except National Geographic, which is
reported in Media
Strong impact on its revenue as covid
19 constraint the amount of crowd
visiting the Park and hotels. Lock down
for almost 4 months so revenue will be
strongly affected for next earningREVENUE SEGMENT
• Media segment: Cable
network &
Broadcasting (Disney, ESPN,
Freeform, FX and National Geographic branded
domestic cable networks • ABC branded
broadcast television network and eight owned
domestic television stations • Television
production and distribution • National
Geographic magazines • A 50% equity investment
in A+E Television Networks (A+E) Networks).
Not much impact as I get to see
increase of revenue on this sector.Revenue Segment
• Studio Entertainment: Motion picture
production and distribution under the Walt Disney
Pictures, Twentieth Century Fox, Marvel, Lucasfilm, Pixar,
Fox Searchlight Pictures and Blue Sky Studios banners •
Development, production and licensing of live
entertainment events on Broadway and around the world
(stage plays) • Music production and distribution • Post-
production services, which include visual and audio effects
through Industrial Light & Magic and Skywalker Sound
Revenue might be impacted by
covid 19 for next earning.Revenue Segment Will be affected as I see a strong
increase of revenue in this
segment
• Direct-to-Consumer & InternationalBranded
international television networks and channels,
which include Disney, ESPN, Fox, National
Geographic and Star (International Channels) •
Direct-to-consumer (DTC) streaming services,
which include Disney +, ESPN+, Hotstar and Hulu
• Other digital content distribution platforms and
services • Equity investments: A 50% ownership
interest in Endemol Shine Group A 20% ownership
interest (49% economic interest) in Seven TV A
30% effective ownership interest in Tata Sky A 21%
effective ownership interest in Vice Group
Holdings, Inc. (Vice). Vice operates Viceland, which
is owned 50% by Vice and 50% by A+E. Significant
revenues: • Advertising - Sales of advertising
time/spaceDisney+ & ESPN+
• DIRECT-TO-CONSUMER & INTERNATIONAL
• Significant revenues: Yes
• • Advertising - Sales of advertising time/space on our International Channels and sales of non-ratings based
advertising time/space on digital media platforms (“addressable ad sales”) across the Company. In general,
addressable ad sales are delivered using technology that allows for dynamic insertion of advertisements into
video content, which can be targeted to specific viewer groups
• • Affiliate fees - Fees charged to MVPDs for the right to deliver our International Channels to their customers
• • Subscription fees - Fees charged to customers/subscribers for our streaming and technology services
(D+ $6.99 or 69.99 in USA.) (E+$4.99 OR 49.99)
• Significant expenses:
• • Operating expenses consisting primarily of programming and production costs (including amortization of
digital content obtained from other Company segments), technical support costs, operating labor and
distribution costs
• • Selling, general and administrative costs
• • Depreciation and amortizationMy personal opinion (In million) in the next earning of Disney which is on 04 August 2020 Revenue 28 March 2020 04 August 2020 Media Network $7257 Possible increase Park Experience & $5543 Possible decrease Product Studio entertainment $2539 Possible decrease Direct consumer $4123 Possible increase
DISNEY KEY PERSON
5D FRAMEWORK FOR A LEADER IN AN ORGANIZATION TO PROVE IF THE COY HAS A RIGHT MANAGMENT
Right management? Proven
Right Management?
Yes
I am still very confident that Bob
Iger as chairman & Mr Bob
Chapek as CEO can lead Disney to
a greater height based on his
familiarity in Walt Disney Coy.
26 year career with the Walt Disney Company,
beginning in the Home Entertainment division,
and rising to become the Chairman of Disney
Parks, Experiences and Products.Robert Chapek
• Chapek worked for H. J. Heinz Company in brand management[1] and in advertising for J. Walter
Thompson before joining The Walt Disney Company in 1993. Early on he worked at Buena Vista
Home Entertainment becoming the unit's president. In July 2006, he was promoted to president of
worldwide for the home video arm until November 2009.[3] Then he was for two years president of
distribution for Walt Disney Studios.[4]
• Chapek was appointed president of Disney Consumer Products in September 2011.[5] On February
23, 2015, Chapek was named chairman of Walt Disney Parks and Resorts effective that day to
replace Thomas O. Staggs, who was promoted to Disney Company Chief operating officer earlier in
the month.[6][7] As part of The Walt Disney Company's March 2018 strategic reorganization, Disney
Consumer Products and Interactive Media was merged into the Walt Disney Parks and Resorts
segment and renamed Walt Disney Parks, Experiences and Products. Parks and Resorts chairman
Chapek was named chairman of this segment.[8] In February 2020, Chapek was named chief
executive officer of The Walt Disney Company replacing Bob Iger, who will remain as an executive
chairman until 2021.[9] In April 2020, Chapek was elected to Walt Disney Co.'s board of
directors.[10] The same month, however, it was revealed that despite the fact that Chapek remained
CEO of the Walt Disney Co., Iger had taken advantage of the 2019-20 coronavirus pandemic and
used his position as executive chairman to reassert control of the company's operational duties for
an undisclosed period.[11]
• Chapek has been married to his wife Cynthia for 40 years and together they have three children and
three grandchildrenCan Disney sustain for the next 10 years? Yes Intangible asset that you and I will remember forever.
•
Risk Factor
Changes in U.S., global, or regional economic conditions could have an adverse effect on the profitability of some or all of our businesses
• Misalignment with public and consumer tastes and preferences for entertainment and consumer products could negatively impact demand for
our entertainment offerings and products and adversely affect the profitability of any of our businesses.
• Changes in technology and in consumer consumption patterns may affect demand for our entertainment products, the revenue we can generate
from these products or the cost of producing or distributing products.
• The success of our businesses is highly dependent on the existence and maintenance of intellectual property rights in the entertainment products
and services we create.
• Protection of electronically stored data is costly and if our data is compromised in spite of this protection, we may incur additional costs, lost
opportunities and damage to our reputation.
• A variety of uncontrollable events may reduce demand for our products and services, impair our ability to provide our products and services or
increase the cost of providing our products and services.
• Changes in our business strategy or restructuring of our businesses may increase our costs or otherwise affect the profitability of our businesses.
• Increased competitive pressures may reduce our revenues or increase our costs.
• Our results may be adversely affected if long-term programming or carriage contracts are not renewed on sufficiently favorable terms
• Changes in regulations applicable to our businesses may impair the profitability of our businesses.
• Our operations outside the United States may be adversely affected by the operation of laws in those jurisdictions.
• Damage to our reputation or brands may negatively impact our business across segments and regions.
• Risks that impact our business as a whole may also impact the success of our direct-to-consumer (DTC) business.
• Turmoil in the financial markets could increase our cost of borrowing and impede access to or increase the cost of financing our operations and
investments
• Labor disputes may disrupt our operations and adversely affect the profitability of any of our businesses
• Sustained increases in costs of pension and postretirement medical and other employee health and welfare benefits may reduce our profitability.
• The seasonality of certain of our businesses and timing of certain of our product offerings could exacerbate negative impacts on our operations.Will that be another closure if the covid 19 cases spike?
Technical chart
RSI shown
an index 50
which tell
me no
trend
Bollinger bands
shown me it
might be a
reversal as it
touches the
lower band and
candlestick show
a hangingman
follow by a
greencandle(but
not strong)
It shows a sign
of crossover. It
could be a
bearish signalFundamental and Valuation I decided to use 5 years avg P/S to calculate the estimated Share price. $131.76/- (Sales per share: (Total rev/O- Shares) $43.06x 3.06 PE Ratio: 51% (Abv 15%, overvalue) Book Value: Increased by 49% (More asset has added into the book of the company which is good). Goodwill to asset ratio:
Goodwill to asset ratio: you can find in balance sheet Goodwill/total asset: 80320/206294=38.9% (if the number keep increasing might not be a good sign as Disney only increase the asset value via from intangible asset…even the book value increase) An intangible asset is an asset that lacks physical Goodwill in accounting is an intangible substance; in contrast to physical assets, such as asset that arises when a buyer acquires machinery and buildings, and financial assets such as an existing business. Goodwill represents government securities. An intangible asset is usually very assets that are not separately identifiable hard to evaluate. Examples are patents, copyright, franchises, goodwill, trademarks, and trade names.
My current Strategy: Bought a long call in march, I currently still own the shares and bought a put recently. Disney vs Coronavirus: Short term disruption, long term gain if everything back to normal. Concern about the Disney growth : Can Disney continue grow its revenue after Disney +? Any more revenue segment to grow in the next 5-10 years
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