As an AAPL shareholder, I would not be in favor of this - at least, not as a cash deal at around $157 per DIS share. As a merger or as a largely stock deal? I'd have to think about that some more.
At $157 a share, Disney would cost around $250 billion. Apple has around $160 billion in cash net of debt. If we're talking about using repatriated cash, which the OP suggests, that pile would likely be somewhat smaller due to some taxes being paid on those remitted foreign earnings. At 10% that would cost around $20 billion. And in acquiring Disney, Apple would be taking on a little bit of additional debt (net or cash). Could Apple do it? Sure. But I don't think it would and I don't think I'd want it to. The debt that Apple would have to take on is not my only concern.
Also... for accuracy's sake, though it isn't that important... at the time of his death Mr. Jobs' stake in Disney was worth around $4.35 billion.
Laureen Powell Jobs has a currently estimated net worth of $14.1 B and Disney is the bulk of that. Laureen bought a property in Florida in an equestrian community so that one of her daughters could train with her competition. That probably didn't leave a dent.
This ain't going to happen. Disney is a global brand which enhances Apple's brand to keep in front of consumers with Theme park, Movies, Sports, etc but Apple is known for buying smaller niche tech companies and put it to use for better product offerings. Disney doesn't fit into Apple's investment philosophy, way expensive(DIS:$113) than in past.
I'd love to know how much Apple and Disney stock that analyst owns. My bet is this was a ploy to raise the stock price temporarily and make some profits.
I don't see this happening. Although Marvel films have been flying high recently, it's very possible over the next few years that people tire of those comic book movies and move on and that's aside from the fact that the theatrical business is in decline (and IMO, will fall off a cliff if the studios get "day-and-date" releases, which Disney, among others, is self-destructively pushing for). Although Marvel and Star Wars take in enormous box-office, profits are actually relatively slim because the films are so expensive to make and market. Chinese box-office has been suffering lately. The Henson properties haven't done well in recent years. The theme parks have good years and bad years and Euro-Disney has never really made money. In a recession (and my bet is that another one is coming) the parks don't do well and international tourism to the U.S. is already down due to perception of Trump administration policies. Like all the traditional broadcast networks in a cable and streaming world, ABC is a shell of its former self.
ESPN hasn't been doing well recently either, which I have to admit being surprised about, because sports still dominates media.
Apple is not really a content company. As the world moves away from downloading and towards streaming, even though Apple has an offering, I don't think it does well compared to the competition. And Apple TV does not dominate.
Looking at the longer term, do you really see Apple has owning a movie studio or as a company involved in medicine, artificial intelligence and robotics? I see the latter.
That was a different issue. What was never realized about AOL is that people weren't there for the content and chat rooms, even though they used them. Once people moved away from dialup, AOL didn't have much of a purpose anymore as people were able to use generic browsers. Had AOL or AOL-Time Warner become an ISP, either organically or through acquisition, the merger probably would have been a huge success, especially if they had kept Warner Records, which they sold in 2003 (and now owned by Access Industries). Back when AOL was still able to charge subscription fees, they had tremendous revenues and profits. But the Time Warner Board probably didn't understand the technology and didn't understand that the age of dialup was coming to an end.
Why yes it was. Especially considering the fact that the $3 billion that Apple paid was considered to be far more than Beats was worth. Beats entire product line: headphones, bluetooth speakers and a music streaming company. And Beats wasn't making a whole lot on the bluetooth speakers, and the music streaming company was likely losing money. It is funny ... companies with billions quarterly in revenue with huge product portfolios that are very influential like Qualcomm, Nvidia and - depending on the context - even Microsoft, Amazon, Samsung and Google get regularly marginalized on here while a small maker of audio accessory hardware - we aren't even talking about Bose here! - has this question asked.
Before Apple bought them out, Beats was making turning over a billion and a half and had 70% of the headphone market. More importantly, they had Iovine and a fledging music service. Apple paid 3 billion for a way in to streaming, a billion dollar business, and the kind of contacts that netted some pretty impressive exclusives. Could they have done this without them? I doubt it. Apples management is made up of middle-aged men who had the good sense to know when they were out of their depth.
Anti-trust regulators, both domestic and foreign, would never approve.
This would present zero anti-trust problems. Apple and Disney have virtually no overlap in their business lines. Therefore, in no market would this result in a reduction in competition. This would be like Wal-Mart buying General Motors or Google buying Boeing--a merger of two behemoths but not the combination of two competitors.
But just to be clear, this ain't going to happen.
The statement "this would present zero anti-trust problems" is based on the assumption both companies would continue to work completely independently of each other and would enter into licensing & distribution agreements with other companies (Samsung or CBS Corporation for example) on the same terms and conditions as the now related companies. The only way to ensure that happens is to have anti-trust regulators scrutinize transactions between the two companies to ensure they are done at arms length. Even though there is little overlap in their current business lines there are still a multitude of ways consumer choice could be harmed by the combined company.
In your example what would happen if Wal-Mart bought General Motors but followed up by saying the only place you can buy a GM product is through Wal-Mart? It is certainly possible if Apple bought Disney that it would institute a period of exclusivity for digital distribution of Disney/ABC/Marvel movies to Apple products. That would be harmful to consumers who use competing products. Maybe they would also offer substantial discounts to Disney theme parks only if you paid for the tickets with ApplePay which would be harmful to Samsung Pay consumers.
Horizontal consolidation of direct competitors is not the only anti-trust issue. The potential for vertical integration after-the-fact has to be considered as well.
Excellent points. Apple would likely be forced (in some markets) to commit to not doing some things that they would be unlikely to want to do. My assumption is that if Apple wanted to buy Disney the deal would not be scuttled due to regulatory interference.
No it wouldn't. Disney doesn't have a monopoly, neither does Apple, and contrary to popular belief, monopolies aren't illegal.
Having said that, I reckon a Disney buyout is a terrible idea.
A good idea in theory, a bad one in practice. Both companies are huge. The CEO of this union would be busy on purely Disney matters as much as on purely technical ones. That would lead to a more vague direction and hurt the tech business imo.
In theory, they could run this more like a Berkshire-Hathaway type conglomerate, leaving the Disney leadership intact. They are in completely separate industries, so it's not like the Apple guys would be obligated to mess around in the details of movies, TV, theme parks, licensing, etc., etc.
That is to say that Apple could make this work if they wanted to, while not ruining what's great about Apple. In fact, they would be foolish to give up any of the brand capital of either company, so they would probably do an "Alphabet-style" move--making Apple Inc. and Disney Inc. subsidiaries of a new entity--with Cook either handing the reins of Apple to someone else or someone else coming in to run the parent company.
If Apple had another $150 billion lying around, I'd say "go for it; got to put the money to some use and Disney is an excellent investment."
Yes, I thought about that. I don't know much about mergers so I thought they were two different things. But we agree that a classical merger wouldn't work.
If all that Apple cared about was the "top line", such a move could be possible (but even then, I suspect a cost/benefit analysis would not be positive). Lots of ego-driven CEO's would think of it. But think of the complexity in running such a beast. And if the answer is "well, they could operate as essentially two companies", then the question is "why buy them at all" - has to be a better use of $250B.
In the end, it is cheaper to license content (even paying a 'high' price), or create it organically, than it is to acquire a company just to get it. One media company acquiring another can make sense. One cable company acquiring another can make sense. Those examples are all about increasing scale for cost reasons. A consumer tech company buying a large media company doesn't really make sense.
I would think that Apple is far more interested in wearables, AR, transportation, and automating the home, than buying a media company.
Example. Netflix with 100M subscribers makes perhaps $10B USD annually (could be less depending on international pricing & exchange rate). Margins with all of their content spend and expenses are very low (make a few hundred million $ in earnings).
Apple in 2017 could easily sell $7B worth of wearables (AW + AirPods + W1 Beats), at much higher margins - making substantially more profit than Netflix - likely 10-20x as much..
A good idea in theory, a bad one in practice. Both companies are huge. The CEO of this union would be busy on purely Disney matters as much as on purely technical ones. That would lead to a more vague direction and hurt the tech business imo.
In theory, they could run this more like a Berkshire-Hathaway type conglomerate, leaving the Disney leadership intact. They are in completely separate industries, so it's not like the Apple guys would be obligated to mess around in the details of movies, TV, theme parks, licensing, etc., etc.
That is to say that Apple could make this work if they wanted to, while not ruining what's great about Apple. In fact, they would be foolish to give up any of the brand capital of either company, so they would probably do an "Alphabet-style" move--making Apple Inc. and Disney Inc. subsidiaries of a new entity--with Cook either handing the reins of Apple to someone else or someone else coming in to run the parent company.
If Apple had another $150 billion lying around, I'd say "go for it; got to put the money to some use and Disney is an excellent investment."
Yeah, in theory it could be that kind of acquisition. But the question would be why? Would Disney be worth that kind of premium if there weren't expected to be significant synergies? I don't think so.
If Apple wanted to make what would essentially be a massive (presumably long-term) investment in a wholly separate business, would Disney (at a price of $157) be the most attractive opportunity it could identify? At that price it doesn't seem cheap to me. For that matter, If Apple was willing to spend that much money and take on that much additional debt (and leave itself with more debt than it had cash), why wouldn't it use that money to buy even more of its own stock back? I would consider AAPL at $150 or even $175 to be cheaper - a better risk-weighted long-term investment - than DIS at $150+.
If all that Apple cared about was the "top line", such a move could be possible (but even then, I suspect a cost/benefit analysis would not be positive). Lots of ego-driven CEO's would think of it. But think of the complexity in running such a beast. And if the answer is "well, they could operate as essentially two companies", then the question is "why buy them at all" - has to be a better use of $250B.
In the end, it is cheaper to license content (even paying a 'high' price), or create it organically, than it is to acquire a company just to get it. One media company acquiring another can make sense. One cable company acquiring another can make sense. Those examples are all about increasing scale for cost reasons. A consumer tech company buying a large media company doesn't really make sense.
I would think that Apple is far more interested in wearables, AR, transportation, and automating the home, than buying a media company.
Example. Netflix with 100M subscribers makes perhaps $10B USD annually (could be less depending on international pricing & exchange rate). Margins with all of their content spend and expenses are very low (make a few hundred million $ in earnings).
Apple in 2017 could easily sell $7B worth of wearables (AW + AirPods + W1 Beats), at much higher margins - making substantially more profit than Netflix - likely 10-20x as much..
Where would you focus your $$ on?
For an idea of Netflix's margins on its streaming service...
In the U.S., its cost of revenues (which is mostly content costs) have been 60-65% of its revenues for the last couple of years. Internationally its cost of revenues have been around 90% of revenues. Combined it's been around 70%. So that means (what we might call) a gross margin of around 30%.
Netflix also reports what it calls contribution margins. Those account for cost of revenues (mostly content costs, but also, e.g., content delivery and payment processing expenses) and marketing. In the U.S. they've been in the mid-30%s while internationally they've been negative. Combined they were a little under 20% last year. Netflix expects the combined contribution margin to improve this year as to finally turns positive for its international streaming segment.
Anti-trust regulators, both domestic and foreign, would never approve.
This would present zero anti-trust problems. Apple and Disney have virtually no overlap in their business lines. Therefore, in no market would this result in a reduction in competition. This would be like Wal-Mart buying General Motors or Google buying Boeing--a merger of two behemoths but not the combination of two competitors.
But just to be clear, this ain't going to happen.
The statement "this would present zero anti-trust problems" is based on the assumption both companies would continue to work completely independently of each other and would enter into licensing & distribution agreements with other companies (Samsung or CBS Corporation for example) on the same terms and conditions as the now related companies. The only way to ensure that happens is to have anti-trust regulators scrutinize transactions between the two companies to ensure they are done at arms length. Even though there is little overlap in their current business lines there are still a multitude of ways consumer choice could be harmed by the combined company.
In your example what would happen if Wal-Mart bought General Motors but followed up by saying the only place you can buy a GM product is through Wal-Mart? It is certainly possible if Apple bought Disney that it would institute a period of exclusivity for digital distribution of Disney/ABC/Marvel movies to Apple products. That would be harmful to consumers who use competing products. Maybe they would also offer substantial discounts to Disney theme parks only if you paid for the tickets with ApplePay which would be harmful to Samsung Pay consumers.
Horizontal consolidation of direct competitors is not the only anti-trust issue. The potential for vertical integration after-the-fact has to be considered as well.
Excellent points. Apple would likely be forced (in some markets) to commit to not doing some things that they would be unlikely to want to do. My assumption is that if Apple wanted to buy Disney the deal would not be scuttled due to regulatory interference.
No it wouldn't. Disney doesn't have a monopoly, neither does Apple, and contrary to popular belief, monopolies aren't illegal.
Having said that, I reckon a Disney buyout is a terrible idea.
I don't think we fundamentally disagree that anti-trust issues likely wouldn't be a problem with a possible merger (how's that for a triple negative?), but anti-trust agencies in the US and Europe would scrutinize the deal. European regulators would be concerned about the classic anti-trust issue of "does a company use market power in one market to illegally increase their market power in another market." Skeptical regulators would say "this would allow Apple to use Disney's (legal) monopoly over Disney content to illegally force consumers to use Apple devices and services." To assuage those concerns, Apple would stipulate to limitations in those areas. This sort of thing happens all the time. Unless you think Apple would buy Disney and then cut off ESPN and other Disney content from non-Apple devices, such stipulations would be no big deal.
A good idea in theory, a bad one in practice. Both companies are huge. The CEO of this union would be busy on purely Disney matters as much as on purely technical ones. That would lead to a more vague direction and hurt the tech business imo.
In theory, they could run this more like a Berkshire-Hathaway type conglomerate, leaving the Disney leadership intact. They are in completely separate industries, so it's not like the Apple guys would be obligated to mess around in the details of movies, TV, theme parks, licensing, etc., etc.
That is to say that Apple could make this work if they wanted to, while not ruining what's great about Apple. In fact, they would be foolish to give up any of the brand capital of either company, so they would probably do an "Alphabet-style" move--making Apple Inc. and Disney Inc. subsidiaries of a new entity--with Cook either handing the reins of Apple to someone else or someone else coming in to run the parent company.
If Apple had another $150 billion lying around, I'd say "go for it; got to put the money to some use and Disney is an excellent investment."
Yeah, in theory it could be that kind of acquisition. But the question would be why? Would Disney be worth that kind of premium if there weren't expected to be significant synergies? I don't think so.
If Apple wanted to make what would essentially be a massive (presumably long-term) investment in a wholly separate business, would Disney (at a price of $157) be the most attractive opportunity it could identify? At that price it doesn't seem cheap to me. For that matter, If Apple was willing to spend that much money and take on that much additional debt (and leave itself with more debt than it had cash), why wouldn't it use that money to buy even more of its own stock back? I would consider AAPL at $150 or even $175 to be cheaper - a better risk-weighted long-term investment - than DIS at $150+.
I agree. I have no idea if Disney is a great buy or not. But if the Apple board came out and said "we've run the numbers and believe that buying Disney and running it as a stand-alone subsidiary is a good use of our cash (and to diversify our revenue)" I wouldn't be inclined to doubt them. If they said, something along the lines of "Apple and the House of Mouse are perfect partners for each other and we're going to mash these organizations together into a beautiful whole" I would be very skeptical and worried. But you're right, if there aren't significant synergies between Apple and Disney, why should Apple pay a significant premium to buy Disney?
Stupid idea. Apple is a gadget maker. It needs $200 billion to safeguard component supplies. The deal will wipe out all the cash balance and saddle Apple with debt. It's death knell. Besides, can't just Apple partner with Disney now on TV programs?
Anti-trust regulators, both domestic and foreign, would never approve. And Sony has shown what happens to tech companies when they try to transcend tech. Not only are they running the entertainment properties that they acquired (including Columbia Pictures, RCA/BMG and other record labels etc.) into the ground, but where once they are among the biggest and most powerful tech companies in the world - more so than Samsung, Google, Apple and Amazon - now they are pretty much just the PlayStation and the #2 maker of TVs (behind Samsung). They don't even make PCs anymore, and where they had the potential to rival Samsung in the mobile device market, they so badly bungled marketing and product development efforts that now they don't even try to sell smartphones outside Japan, and it is unclear whether they still make tablets at all.
Sony proves that if you try to dominate everything you become good and competitive at nothing. They are certainly a cautionary tale for Apple and all the people who claim that Apple should buy Disney or even Netflix.
If you ask me, Google is another cautionary tale. Of all their efforts to expand beyond their initial search engine/web browser/email product - synergy that they did not innovate as AOL first started combining the 3 back in the early 90s - pretty much everything else they have tried their hands at since then but YouTube and Android have failed. And even those have qualifiers. Google bought an already successful YouTube only after years of trying and failing to compete with them with "Google Video". Android only succeeded because of the efforts of Samsung and the other hardware partners. That is why the other Android products where Google hasn't given manufacturers the freedom that they gave them with smartphones and tablets to control their own products so long as they retained the mandatory apps and Google branding i.e. Android Wear, Android TV etc. have failed, as has Google Fiber, Google Fi, the Nexus/Pixel programs, Google Home, Google VR, Google+ and so on. Even their Google Cloud venture, something that they should be great at, has been only a small success at best. Apple should not try to be Sony or Google.
All you points are moot.
Apple ins't Sony
Sony was bigger and more influential than Apple before they diluted themselves and added all these distractions by becoming a diverse media company instead of sticking with tech. Sony went from revolutionizing consumer hardware with products like the Walkman and Blu-Ray - as well as transforming the video game market with Playstation, which at that time was dominated by Nintendo and wannabes like Sega where Playstation - to getting crushed by companies who used to make cheap versions of their own products like Samsung and Huawei. Take smartphones. I know, you regard Android as an illegitimate interloper and you hate and desire the failure of all Android OEMs equally. But as a tech and business story as opposed to merely "how does this affect Apple" story, Sony with their name brand alone - to speak nothing of things like R&D, marketing, supply chain -should have been #3 in smartphone sales behind Samsung and Apple. Instead they are getting crushed by companies that either weren't selling consumer products like Xiaomi or flat out did not exist at all like One Plus, and haven't even been able to effectively market their mobile devices to PlayStation owners.
Apple isn't Sony today, but give them 10 years after buying Disney. Sony didn't fall apart immediately after buying Columbia Pictures, BMG Music Group, RCA etc. either. Neither did the AOL/Time Warner/Yahoo merger go south right away. It took years before the effects of spreading themselves too thin, mostly the result of placing the wrong vice presidents in charge of various divisions, took effect. And here is the deal: Sony was a huge company with a ton of divisions and products BEFORE. If anyone should have been capable of such diversification, it should have been them. But Apple, who throughout its history has only made a small range of computing devices targeted primarily towards consumers (Macs, then iPods, then Apple TV, then iPhones, then iPads, then Apple Watch ... I am not going to mention HealthKit or HomeKit until they become actual products) to take on the huge conglomerate that is Disney (Disney, Miramax, Lucasfilm, Marvel and Pixar are the movie studios alone!) would have no chance of managing such a monstrosity.
Sony was NEVER EVER EVER bigger than more influential than Apple is right now.
That is total and utter crap.
It's also utter crap that he called Sega a Nintendo wannabe when the historical Nintendo wannabe is Sony. Gamers know this. Problem is Nintendo's marketing and business people are monkeys, they'll allow copycats to steal their market and they'll just shrug their shoulders.
As an AAPL shareholder, I would not be in favor of this - at least, not as a cash deal at around $157 per DIS share. As a merger or as a largely stock deal? I'd have to think about that some more.
At $157 a share, Disney would cost around $250 billion. Apple has around $160 billion in cash net of debt. If we're talking about using repatriated cash, which the OP suggests, that pile would likely be somewhat smaller due to some taxes being paid on those remitted foreign earnings. At 10% that would cost around $20 billion. And in acquiring Disney, Apple would be taking on a little bit of additional debt (net or cash). Could Apple do it? Sure. But I don't think it would and I don't think I'd want it to. The debt that Apple would have to take on is not my only concern.
Also... for accuracy's sake, though it isn't that important... at the time of his death Mr. Jobs' stake in Disney was worth around $4.35 billion.
Laureen Powell Jobs has a currently estimated net worth of $14.1 B and Disney is the bulk of that. Laureen bought a property in Florida in an equestrian community so that one of her daughters could train with her competition. That probably didn't leave a dent.
Sure makes her a target for marriage by every freeloader on Earth.
Comments
I don't see this happening. Although Marvel films have been flying high recently, it's very possible over the next few years that people tire of those comic book movies and move on and that's aside from the fact that the theatrical business is in decline (and IMO, will fall off a cliff if the studios get "day-and-date" releases, which Disney, among others, is self-destructively pushing for). Although Marvel and Star Wars take in enormous box-office, profits are actually relatively slim because the films are so expensive to make and market. Chinese box-office has been suffering lately. The Henson properties haven't done well in recent years. The theme parks have good years and bad years and Euro-Disney has never really made money. In a recession (and my bet is that another one is coming) the parks don't do well and international tourism to the U.S. is already down due to perception of Trump administration policies. Like all the traditional broadcast networks in a cable and streaming world, ABC is a shell of its former self.
ESPN hasn't been doing well recently either, which I have to admit being surprised about, because sports still dominates media.
Apple is not really a content company. As the world moves away from downloading and towards streaming, even though Apple has an offering, I don't think it does well compared to the competition. And Apple TV does not dominate.
Looking at the longer term, do you really see Apple has owning a movie studio or as a company involved in medicine, artificial intelligence and robotics? I see the latter.
That was a different issue. What was never realized about AOL is that people weren't there for the content and chat rooms, even though they used them. Once people moved away from dialup, AOL didn't have much of a purpose anymore as people were able to use generic browsers. Had AOL or AOL-Time Warner become an ISP, either organically or through acquisition, the merger probably would have been a huge success, especially if they had kept Warner Records, which they sold in 2003 (and now owned by Access Industries). Back when AOL was still able to charge subscription fees, they had tremendous revenues and profits. But the Time Warner Board probably didn't understand the technology and didn't understand that the age of dialup was coming to an end.
Having said that, I reckon a Disney buyout is a terrible idea.
In the end, it is cheaper to license content (even paying a 'high' price), or create it organically, than it is to acquire a company just to get it. One media company acquiring another can make sense. One cable company acquiring another can make sense. Those examples are all about increasing scale for cost reasons. A consumer tech company buying a large media company doesn't really make sense.
I would think that Apple is far more interested in wearables, AR, transportation, and automating the home, than buying a media company.
Example. Netflix with 100M subscribers makes perhaps $10B USD annually (could be less depending on international pricing & exchange rate). Margins with all of their content spend and expenses are very low (make a few hundred million $ in earnings).
Apple in 2017 could easily sell $7B worth of wearables (AW + AirPods + W1 Beats), at much higher margins - making substantially more profit than Netflix - likely 10-20x as much..
If Apple wanted to make what would essentially be a massive (presumably long-term) investment in a wholly separate business, would Disney (at a price of $157) be the most attractive opportunity it could identify? At that price it doesn't seem cheap to me. For that matter, If Apple was willing to spend that much money and take on that much additional debt (and leave itself with more debt than it had cash), why wouldn't it use that money to buy even more of its own stock back? I would consider AAPL at $150 or even $175 to be cheaper - a better risk-weighted long-term investment - than DIS at $150+.
For an idea of Netflix's margins on its streaming service...
In the U.S., its cost of revenues (which is mostly content costs) have been 60-65% of its revenues for the last couple of years. Internationally its cost of revenues have been around 90% of revenues. Combined it's been around 70%. So that means (what we might call) a gross margin of around 30%.
Netflix also reports what it calls contribution margins. Those account for cost of revenues (mostly content costs, but also, e.g., content delivery and payment processing expenses) and marketing. In the U.S. they've been in the mid-30%s while internationally they've been negative. Combined they were a little under 20% last year. Netflix expects the combined contribution margin to improve this year as to finally turns positive for its international streaming segment.
I don't think we fundamentally disagree that anti-trust issues likely wouldn't be a problem with a possible merger (how's that for a triple negative?), but anti-trust agencies in the US and Europe would scrutinize the deal. European regulators would be concerned about the classic anti-trust issue of "does a company use market power in one market to illegally increase their market power in another market." Skeptical regulators would say "this would allow Apple to use Disney's (legal) monopoly over Disney content to illegally force consumers to use Apple devices and services." To assuage those concerns, Apple would stipulate to limitations in those areas. This sort of thing happens all the time. Unless you think Apple would buy Disney and then cut off ESPN and other Disney content from non-Apple devices, such stipulations would be no big deal.
I agree. I have no idea if Disney is a great buy or not. But if the Apple board came out and said "we've run the numbers and believe that buying Disney and running it as a stand-alone subsidiary is a good use of our cash (and to diversify our revenue)" I wouldn't be inclined to doubt them. If they said, something along the lines of "Apple and the House of Mouse are perfect partners for each other and we're going to mash these organizations together into a beautiful whole" I would be very skeptical and worried. But you're right, if there aren't significant synergies between Apple and Disney, why should Apple pay a significant premium to buy Disney?