Will Apple Make A Play For Disney?
Last week, there were a whole bunch of articles and news posts about the possibility of Apple buying The Walt Disney Company.
Disney Stock Has Crashed. 1 Analyst Thinks Apple Should Bid.
- Market volatility has created an attractive entry point, and Disney shares are down more substantially than Apple stock.
- Disney is in the middle of a CEO transition.
- Disney+ could solve Apple’s content problem. He thinks Apple TV+ is off to a relatively slow start.
- “Disney+ has the potential to be the unifying force creating a Disney ecosystem between segments,” he wrote. “Ultimately, we believe Disney will benefit from the Disney+ customer relationship driving more sales of parks and movie tickets, and streaming service subscriptions. Apple generates similar benefits from their iOS ecosystem, and we believe there could be synergies from combining the two.”
Savitz was clear. This was pure speculation.
As of this moment, here on a Monday afternoon in the middle of the Corona Quarantine, there’s no evidence of any movement by either entity.
And, there are probably good reasons for that.
3 Reasons Apple Isn’t Buying Disney
1. Apple can get more bang for its buck elsewhere
In other words, it would be too expensive. Munarriz explained, “At its peak just four months ago, Disney was commanding $335 billion in enterprise value. Apple would naturally offer a cash-and-stock deal, but that money could go toward buying a dozen tech and tech-services providers that would slide into Apple’s existing ecosystem more easily.”
2. Playing favorites isn’t a good look
Munarriz wrote: “Content is king, but there’s a reason the queen is the chess piece with the power to go anywhere she wants. Apple’s success with media distribution platforms from iTunes to App Store stems from the fact that it doesn’t play favorites among content creators and developers.”
3. Premium products aren’t the same as premium services
“Disney is the Apple of theme parks, movie studios, cruise lines, timeshares, and perhaps even media networks,” said Munarriz. “What does this do to widen Apple’s services revenue? It’s not going to upsell Disney World visitors into trading in their MagicBands for Apple Watch devices. It’s not going to get ESPN viewers to pay for cloud storage of games.”
My — VERY — uninformed hunch. It ain’t happening. But there remains the one tingle in the back of my buzz-o-meter.
Barron’s reminded readers that former Disney CEO Bob Iger’s autobiography posited, “I believe that if Steve were still alive, we would have combined our companies, or at least discussed the possibility very seriously.”
Be sure to check out the full articles at Barron’s and The Motley Fool. Yes, it’s money talk but money certainly does TALK!