Walt Disney Co (NYSE: DIS) is scheduled to report its fiscal Q3 results after market close on August 9.
BTIG’s Richard Greenfield mentioned that there were concerns associated with the company’s growth in fiscal 2017 and beyond, and listed key questions for management.
Questions For Management
1. Zika And Orlando: With fears regarding Zika rising, following the CDC having confirmed 14 cases of the Zika virus, Greenfield questioned whether Disney had seen any changes in booking trends at Orlando.
Related Link: Florida May Consider Use Of Scientifically Engineered Mosquitos To Battle Zika
2. DISH: Greenfield also questioned whether DISH Network Corp (NASDAQ: DISH)'s new lead offer, which excludes Disney-owned cable and broadcast networks, was legal. In fact, Disney was the only major network without any channels in the Dish Flex Pack base bundle. The analyst expressed concern regarding this packaging being replicated by other MVPDs, which could impact Disney’s cable network distribution over the next few years.
3. ESPN, Altice USA: Pointing out that the next significant negotiation for ESPN was with Altice USA, Greenfield wondered whether Altice would be “more willing to lose video subscribers to vMVPDs that carry ESPN, such as Sling, rather than be forced to pay up for the channel across the entire sub base.” The analyst expressed concern that Altice might market the availability of Sling as an alternative for ESPN among its subscriber base.
4. ESPN Expansion: The analyst also pointed out that ESPN was continuing to buy and extend its sports rights contracts “as if its growth prospects had not changed meaningfully over the past several years.” With ESPN intending to launch another conference-based cable network in 2019, Greenfield questioned the decision to push more content at higher prices “that an increasingly smaller fraction of consumers actually want to watch.”
5. Hulu: Recent filings suggest that Hulu’s run rate losses are close to $500 million, while programming costs are ramping and subscriber growth appears sluggish. The analyst wondered whether Hulu would exit 2017 with annual loss of close to $1 billion, with Disney bearing its 30 percent share.
6. Live Video Streaming: Greenfield also questioned why Disney was not building its own tech stack for live video streaming, given the strength of its balance sheet.
7. Gaming: In addition, the analyst questioned why Disney did not show interest beyond its licensing business, especially given that importance of gaming across all demographics and the opportunity for diversification that this category offers.
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Latest Ratings for DIS
| Date | Firm | Action | From | To |
|---|
| Mar 2022 | MoffettNathanson | Maintains | | Neutral |
| Feb 2022 | Citigroup | Maintains | | Buy |
| Feb 2022 | JP Morgan | Maintains | | Overweight |
View More Analyst Ratings for DIS
View the Latest Analyst Ratings
