Activist Report Against Disney $DIS
Thought this report from Train Partners titled "Restore the Magic" $DIS would be of interest to any Disney shareholders or observers.

Can find the presentation here.

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Benjamin Tan's avatar
The presentation does raise valid concerns about profitability, cost controls, and inherent value of Disney+. One should not rule out hubris when Iger made that aggressive bid for 21CF - he was on a roll with Pixar, Lucas, Marvel.

Reorientating $DIS to center around streaming does make sense in the world of DTC, but profitability appears to be dependent on many more subscribers above the guided 300-350mn range. See below my estimation of subs versus profits at Disney+, further comparing to $NFLX:

"Disney is targeting 300-350mn subscribers across Disney+, Hulu and ESPN by FY 2024. Extrapolating from the current revenue run-rate of $20bn with an average subscriber base of 230mn, this implies a potential annual recurring revenue base of $30bn by end of FY 2024, not dissimilar to where Netflix is today. Will it attain the same operating profit margin of 19.3% at that stage? Unlikely, given the breakeven guidance for the DTC business exiting FY 2024. Profitability will therefore have to depend on additional subscribers above the 300-350mn range guided. That is a lot of subscribers to bridge from the current 225mn to the promised land!"

Conor Mac's avatar
@consumeowntech Solid thoughts Benjamin, thanks for sharing. Will read your report too!
Joshua Simka's avatar
@consumeowntech I shy away from the comparisons between Disney and Netflix because it's not apples-to-apples. Disney has a different and much more diversified business model. In my opinion, Disney has managed to build up Disney+ much more quickly than many were thinking and it's certainly no surprise that that would be expensive.
Benjamin Tan's avatar
@tomato From 0 to 164 million subscribers in 3 years was going to be expensive indeed ! But DTC is also an existential pivot that $DIS has to make
Joey Hirendernath's avatar
Christian's avatar
@joeyhirendernath have not gotten a chance to go through it yet but thank you for the tag. I’ve been very vocal about Disney and Iger on here so this should be a very interesting perspective. Disney pretty adamant about them not being on the board though
MT Capital's avatar
This was great, thanks Conor!
Conor Mac's avatar
@mt_capital1 Pleasure sir, digging the new pp!
Brett Schafer's avatar
Great find, excited to give it a read
Conor Mac's avatar
@ccm_brett Pleasure!
Rihard Jarc's avatar
$DIS needs to be run much better. The value, brand and assets they have is one of the best in the business, but the stock price hasn't reflected that for so long that it needs something to change.
Nathan Worden's avatar
Thanks for sharing!
Conor Mac's avatar
@nathanworden My pleasure sir!

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