Disney is Just an Average Company at Best

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[00:00:04] Doug Mcintyre: Disney came out with what people thought were, I think reasonably good results. But the problem is, is that, Iger was brought back in. He was the CEO for about 10 years. He left a guy named Chapi who was the handpicked successor.

[00:00:22] Doug Mcintyre: He was only there about nine or 10 months.

[00:00:24] Lee Jackson: Didn’t even get him year end. Yeah.

[00:00:25] Doug Mcintyre: Iger came back and now he says that they’ll try to pick somebody by the end of 2026, which means that. He’ll be there until he is like Warren Buffet. He’ll be there until he’s in his nineties. Maybe Jamie Dimon will have a bid, but if you look under the surface of these earnings, was the streaming business better?

[00:00:44] Doug Mcintyre: Sure, little bit. But are they, they’re still up against, Netflix. They’re up against Amazon. They’re up against HBO Max. That’s streaming, if you’re in the second tier, is not a good business period. I don’t get Well, and you know how it’s

[00:01:01] Lee Jackson: Doug Hulu’s essentially a streaming version of cable, as opposed to Netflix or some of the other provider.

[00:01:08] Lee Jackson: And for a lot of people that’s okay, but you’re not gonna get any premium pricing or anything like that. And so, yeah, why they did blow the top off was exactly the reason you said that they would, and it was.

[00:01:23] Doug Mcintyre: Blow the top off

[00:01:24] Lee Jackson: Amusement parks.

[00:01:26] Doug Mcintyre: Oh, well, yeah. Here’s the other, right? We keep talking about this, the amusement parks.

[00:01:31] Doug Mcintyre: They do well until you price them so highly that people won’t go anymore. it’s like when do they hit the point where they start to lose customers? Yeah. I mean, what’s your theory?

[00:01:46] Lee Jackson: Well, they’re gonna build a new one in Abu Dhabi. I don’t think anybody there will have any problem at any of the price points there, but I think you’re right.

[00:01:56] Lee Jackson: If you’re the, if you’re the typical American family of four or five, if you’ve got two or three kids and you want to go, it’s an expensive proposition. And if the economy slows down dramatically, that could price a lot of people out because it’s very expensive.

[00:02:12] Doug Mcintyre: Yeah, let me just take a while we’re talking.

[00:02:14] Doug Mcintyre: Why don’t we just, let me take a quick look at Disney. So, how they’ve done in like, I don’t know, the last couple, three years. I mean, I understand that these stocks occasionally get a bump because there’s some sort of temporary good news, but it is just not compelling. It’s, it’s underperformed the s and p in the last year.

[00:02:36] Doug Mcintyre: Has it made a comeback? The answer to that is yes. Has it made a comeback to the point where you say to yourself, I should buy this stock? I think the answer’s no. You’ve gotta challenge with the theme parks on pricing. You’re probably gonna get some inflation now because of the tariffs, which means disposable income that families have is gonna start to drop down.

[00:02:59] Doug Mcintyre: And then on top of that, yep. You’ve got what I think is a semi crummy streaming business. And listen, the studio does okay. Okay. Because it has all these, superhero movies

[00:03:12] Lee Jackson: and stuff. Yeah. The Marvel stuff does good. The rest of it, so-so

[00:03:16] Doug Mcintyre: They’re gonna have an ESPN version that you can pay for.

[00:03:20] Doug Mcintyre: Okay, great. I don’t know how many people are gonna pay for that. I mean, most people,

[00:03:24] Lee Jackson: Again though, that’s in Hulu, so un, unless you just wanna somehow buy just ESPN or ESPN Plus is there, so I, I’ll be interested to see how that works. I was surprised we may announce that.

[00:03:38] Doug Mcintyre: Well, I think this is one of these situations where they throw mud at the wall and they hope of a little of it sticks.

[00:03:46] Doug Mcintyre: They can start to keep, have reasonable earnings. But what the stock market’s telling us right now is Disney is an average company. Yeah. Disney was a crummy company. Now, now it’s an average company, so I’m not buying Disney here. Okay. Just for everybody who’s sitting around listening to us. To me, Disney is it’s, it’s a hold on a good day.

[00:04:09] Lee Jackson: Yeah. And I think it’s interesting because I noticed today this Charter and Cox, which are, charter’s very big and, and our, our pal, Warren Buffet owns it and Cox are gonna kind of merge their operations. So that’s gonna be a formidable challenge because what if they start putting out a lot of streaming content and things of that nature?

[00:04:31] Lee Jackson: It just puts another challenger into the mix for sure.

[00:04:35] Doug Mcintyre: I don’t think there’s a chance to make a bunch of money. Streaming, unless you’re Amazon or your Netflix, can you make a few bucks? Yes. Yeah. Margin like cable was, Are you gonna be up against churn all the time? Yes. Yes. So you, you may have a couple of good quarters, but the the problem is, is you’re not going to have quarters where you’re ratcheting. I mean, God, look at Netflix. It’s so huge, but it just rat. It is

[00:05:05] Lee Jackson: every, well, it’s worldwide and that’s where they have the big advantage. I mean, I, how many people in, in, name your country, wanna watch American television?

[00:05:18] Doug Mcintyre: I, I can just say that I don’t want to be in the Disney streaming business if I’m up against big players.

[00:05:24] Doug Mcintyre: I know they’ve got some good content. It’s not great. And then you have people who are insane, like Apple. Apple has a streaming business, it has no subscribers, but Apple has a balance sheet where they will keep pushing money into this over and over and over again. Yep. I do not wanna be in a competition where I have irrational players with infinite amounts of money, and that’s what Apple is.

[00:05:47] Doug Mcintyre: It’s a, it’s a, they’re irrational to try to be in the movie streaming business. But they will kick it over. They will throw, somebody told me they lost a billion dollars on that last year. If, if you said to Tim Cook you prepared to lose another, billion dollars. And he says, strategically, we, we need to be there to feed our devices.

[00:06:09] Doug Mcintyre: they got two. Yeah. Right. Billion devices or it’s sticky. That’s what they call it in that way.

[00:06:15] Lee Jackson: Yeah. So you’re our resident, 24/7 Wall Street Disney analyst. What’s your call, buy, sell, or hold?

[00:06:22] Doug Mcintyre: No, it’s a hold. It’s not, there is very little upside here. The parts worry me because of inflation.

[00:06:32] Doug Mcintyre: We have inflation now. I don’t care what anybody said. Did you see the consumer confidence numbers today? Yes. They were horrible. They were the second lowest they’ve been since they started to measure. Yep, since that yardstick began. So you tell me a bunch of people are gonna go to theme parks now.

[00:06:50] Lee Jackson: Could be a cruel summer, let’s put it that way.

[00:06:53] Doug Mcintyre: It’s gonna be a cruel summer. Disney is a company that counts on consumer confidence. Okay, that’s it. Is what they do is purely discretionary, purely discretion. Absolutely. So anyway,

[00:07:07] Lee Jackson: Well after the second quarter numbers are out, we’ll go in and review it again. What do you say?

[00:07:12] Doug Mcintyre: Hold it best.

[00:07:13] Doug Mcintyre: I’ll see you then.

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