Disney CEO Bob Iger is under pressure from activist fund Trian Fund Management, which has nominated its founder Nelson Peltz and former Disney CFO Jay Rasulo as board members. Trian, who has invested about $3 billion in Disney, complains that the company is not well run and plans to fight at the next meeting, scheduled for April 3. Iger, for his part, is trying to ingratiate himself with shareholders. This Wednesday, when presenting the results, it countered with a series of announcements that drove up the price: the exclusive broadcast of the Taylor Swift film; the acquisition of a $1.5 billion stake in Epic Games, which developed the video game Fortnite, a 50 percent increase in dividends to up to 45 cents per share and a $3 billion share buyback in that one Year.
The Burbank, Calif.-based entertainment giant posted revenue of $23,549 million between October and December, the first quarter of its fiscal year, almost identical to the same period last year. However, while sales of theme parks and other experiences are growing strongly (7%, up to 9,132 million, due to the appeal of its international parks) and the sports division is defending (it is growing by 4%, up to 4,835 million), the entertainment division is declining by 7% to 9,981 million. This decline is largely due to the relatively poor response to The Marvels and Wish in the current quarter, compared to Black Panther: Wakanda Forever, Avatar: The Shape of Water and The Strange World in the same quarter last year.
By cutting costs, Disney was able to increase profits by 49% to $1,911 million on almost the same revenue, thus exceeding analysts' forecasts. Additionally, the company said it expects earnings per share to rise at least 20% to about $4.60 per share thanks to cost cuts. This will allow Disney to increase its dividend by 50% to 45 cents per share and launch a $3 billion share buyback program this year.
Stock market rise
Disney's share price has reacted upwards, rising around 7% outside of normal trading hours. In the last 12 months the price has fallen by 11%. In addition to the financial figures and the increase in shareholder compensation, Disney filled the earnings presentation day with a number of announcements.
The foretaste came Tuesday when ESPN, a subsidiary of Disney, Fox and Warner Bros. Discovery, announced an agreement to form a new joint company to offer a streaming sports service through its platform. The platform will bring together the various companies' sports channels, certain direct-to-consumer (DTC) sports services and sports rights, including content from major professional sports leagues and college sports.
But that was not all. The company has jumped on the current star's bandwagon and announced that Disney+ will premiere exclusively on Taylor Swift on March 15 | The Eras Tour (Taylor's Version), which is the first time the entire concert film has been made. “It will include the entire concert, including the song Cardigan and four additional acoustic songs that were not included in the theatrical or digital version of the film,” Iger himself announced. “We know the public will love it,” he added.
The number of subscribers to streaming service Disney+ fell to 149.6 million in the quarter, missing analyst forecasts of 151.2 million, while overall losses in the streaming business, including Hulu and ESPN+, widened to 216 million from 1,050 million a year earlier Dollar decreased. In part due to Taylor Swift's claim, the company expects to add between 5.5 million and 6 million Disney+ subscribers this quarter and continues to expect its streaming operations to break even in the fourth quarter of the current fiscal year becomes.
In addition, Disney has also announced that it will take a “small stake” of $1.5 billion in Epic Games as part of a collaboration with the company that developed the popular title Fornite “in a new universe of gaming and entertainment.” “Expand the scope of Disney’s most popular stories and experiences.”
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