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I’m taking a quick break from pre draft breakdowns to just briefly mention some takeaways from last night’s Disney Shareholder’s meeting. I am not a shareholder but was lucky enough to gain access to chunks of the call by participants who posted audio.
Let me repeat what I keep trying to say, I am staying away from the politics as much as possible. In every single arena of life right now there is divisive and stressful mudslinging that we just don’t need. Most of us seem to want to just have some idea of what “the new normal… is and roll with it.
ESPN did announce another specific departure based on a segment called “the last dance…. I’ll be honest, I’ve never seen it. The producer behind it is now gone. The reason I’m lumping the Disney news in with this is because ESPN is kind of on information lockdown. As many as 300 people (depending on outlet) were let go in the last round. The next round is in June. That is when “on air talent… will be announced and seems to coincide with the end of the playoffs for NHL and NBA.
Here’s what you need to know in what the earnings report had to say. 4 million subs were lost world wide in streaming. Here’s where it gets odd. One source said 300k in North America, one said 700k but specifically said U.S. and Canada. Regardless, it’s not that simple. The number of VPN users (and some of you have openly talked about it) that list themselves as living in Europe is almost unattainable. India lost massive subs because of a Cricket league that is no longer with Disney/Hulu international. Some of you may still have that 3 part package of ESPN+/HULU/Disney and at least a few were told if you cancel you can’t get it back. Disney is now planning to roll Hulu into Disney+ (or vice versa) and the remaining 33% owned by Comcast can be forced into sale at a minimum of 23 billion.
The streaming services “only… lost $659 million this past quarter (down from 1.1 billion in the previous quarter). That was actually presented as a high point. The streaming service increased to 10.99 on the no ad tier and will increase again this year (as will park prices) in trying to recover lost revenue and cover raises promised to park employees. The last 3 theatrical releases had a combined loss of over 500 million.
Back to hockey. ESPN is being mentioned less and less on the calls and was turned into its own tier. After the June layoffs we’re probably going to find out what the long term plan is. Streaming continues to fall short for the company, and the layoffs next month will be the 6th round in the past 10 years for ESPN. Further “trimming… could be pointing to a sale or transfer of the IP.
As far as Bally’s goes, while they continue to turn in debts and figures, the mid parent tier of Diamond sports sued the Phoenix Suns and a judge nullified the teams new deal with a different broadcast company. A counter suit is already in place. Bally wants to keep as much “value… as possible if a sale becomes inevitable and losing teams hurts the brand.
Right now, if we could go back in time, nixing the ESPN deal and staying with NBC/Universal would look like a genius strategy. The initial move gained $220 million per year but now Ad revenues for streaming are down as high as 80%. You probably heard that VICE closed “Vice News…, and are looking at other outlets. MTV news (didn’t know it was still around) closed its doors as well this week. The Freepress has switched to online subs fully (not even 3 free articles a week or month any more) and Mlive has done some similar changes. The Hollywood writer’s strike has shut down as many as 3 late night shows and scripts that were pre written and in production are being picketed and shut down (Disney just abandoned a project this week). There is also an actor’s strike and director’s strike on the horizon.
Revenues are down and all the strikes are about more money and in the case of the writers, forcing studios to overhire (from 2 to 5 or 10) and guarantee jobs for more people. It is not the best time to ask for a raise, but I don’t envy anyone losing their jobs.
So there you have it. Sifting through 45 minutes of updates and countless hours of Q and A and analysis. My personal opinion? Apple TV could easily purchase ESPN and integrate into a fairly familiar platform. They could then purchase Bally (which Disney had owned) and combine into a much more user friendly platform. I don’t know if that will happen, but would be nice to have a single place to go to next season. Let me know your thoughts, and tomorrow we’re back to the draft!