As Disney battles activist investors Nelson Peltz’s Trian and Jason Aintabi’s Blackwells Capital, one activist firm that supports Iger and the Board released its own thesis on the future of Disney.
ValueAct Capital, led by co-CEO Mason Morfit, released a whitepaper outlining their strategic ideas and why they support Iger and Disney.
Here are some takeaways from ValueAct’s Take on Disney.
ValueAct has experience in all the areas Disney is currently in
ValueAct has experience in media, tech, gaming, sports betting, and theme parks. Those are some key areas that Disney is currently in. Disney has been a household name in media and theme parks yet the company is trying to break into the tech, gaming, and sports betting sectors.
A common trend in ValueAct’s investment is companies that have unique products and bundles such as The New York Times, Spotify, Microsoft, and Adobe.
This thesis makes sense… now we need to follow through
ValueAct’s thesis may be a dream of every Disney Parks fan.
For years Parks fans have been clamoring — begging — that Disney invest less into streaming and theatrical and more into their parks. ValueAct’s pitch is to lean into the parks and move beyond the streaming wars by utilizing various bundles.
Disney now needs to act on its $60 billion Disney Parks investment because so far we haven’t seen much. Now it is time for the follow-through.
ValueAct also showed the Studios vs Netflix and I think it illustrated why the studios haven’t been able to crack the code just yet. However, they will have to update this once Disney reaches profitability with Disney+. Also, can we just talk about ValueAct going no-holds-barred on Netflix? Just wild to see.
Disney Genie could be more
This slide in the whitepaper illustrates that Disney Genie could be so much more than just a simple “extra window” to make money. Wall Street looks at Genie as a way to monetize characters and story IP. I guess it does in certain cases like when a new attraction opens with a certain IP (Guardians of the Galaxy: Cosmic Rewind & TRON: Lightcycle Run) and people are willing to pay extra to ride it.
Yet, I don’t think Genie does everything it should but then again this is coming from a guy who believes Walt Disney World FastPass should be free.
Could ValueAct convince Disney to do the Disney Prime bundle?
ValueAct shares that the key lessons from their portfolio have been the bundle. Microsoft it’s the Office 365 suite which includes products like Microsoft Word, PowerPoint, and Excel. For The New York Times, it’s a bundle that includes news, games (Wordle, Connections), cooking, and The Athletic. For Spotify it’s the range of music, podcasts, audiobooks, and now integrations with live events. ValueAct didn’t include Adobe but they would be another example of a bundle that includes Photoshop, Premiere, AfterEffects, Illustrator, and etc.
So with that being said will ValueAct be the one to advise Disney to resurrect Disney Prime? Disney Prime is an idea that I have been passionate about and it’s a membership bundle that would integrate all aspects of The Walt Disney Company (streaming, shopping, parks). It was an idea that gained steam in the Chapek era.
ValueAct also cited the data from the NYT bundle. Just imagine if they could convince Disney to build a bigger Disney bundle.
Disney & Hulu and Disney & Epic are good bundles but more will be needed
I understand the logic here. Although I would argue the appeal of Disney+ and Hulu isn’t the bundle. It’s the ability to merge the service into a powerhouse streaming platform. Add in ESPN, and you have a streaming service that will appeal to a lot more subscribers.
The Disney and Epic bundle has way more potential. Disney wants to use the relationship to create a Disney universe and to create games. They also want the ability to sell physical and digital goods.
Even though ValueAct didn’t mention it, I wouldn’t rule out Disney and Apple coming together for a bundle. Disney+, AppleTV, ESPN, and maybe some sort of Apple Vision Pro component too.
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Zach Perilstein is the Editor-in-Chief of the Boardwalk Times
