Apple's rumored Disney acquisition is 'pure speculation' says Bob Iger

Posted:
in AAPL Investors edited November 2022
The prospect of Apple acquiring Disney seems not just unlikely, but incredibly improbable, after the returning CEO told employees the rumors are "pure speculation."

Bob Iger and Steve Jobs
Bob Iger and Steve Jobs


In the wake of rumors flaring up of a deal that Apple could buy the entertainment behemoth following his return as CEO of Disney, Bob Iger has taken a moment to cool down suggestions Disney is for sale. Speaking to cast members during a town hall meeting on Monday, Iger dismissed the suggestion entirely.

Bob Iger during today's cast member meeting stated the Apple buying Disney rumor is just a rumor. $DIS pic.twitter.com/K8g8JUzpLU

-- Boardwalk Times (@BoardwalkTimes)


During the meeting about the future of Disney itself, Iger was asked about the rumors of a possible Apple purchase. In response, Iger characterized the claims as "pure speculation," indicating it's not something the company is considering at all.

Rumors that Apple will buy Disney have circulated for over two decades, but were renewed with the installation of Iger as CEO three years after leaving the role. During the hiatus, Iger publicly said there was a point where a merger could possibly have taken place between the two companies -- if there had been discussions.

Iger had previously uttered the same sentiment while friend Steve Jobs was alive, but neither had actually formally spoken about such a deal.

During the Cook administration of Apple, the rumors continued, in part due to Apple's growth and massive cash reserves being enough to enable such a purchase to take place.

However, such a prospect won't occur unless both Apple and Disney offer any indication to each other that such a tie-up would be appropriate. With Iger's comments, that seems extremely unlikely to happen anytime soon.

Read on AppleInsider

Comments

  • Reply 1 of 10
    DAalsethDAalseth Posts: 2,588member
    Seems like many people have all sorts of ideas of how to Spend Apple’s money. None of them however, have a clue what’s going on behind the scenes.
    lkruppwilliamlondondewmeFileMakerFellerwatto_cobra
  • Reply 2 of 10
    Sometimes what ISN'T said is most interesting. In this case, Iger didn't say there was "no truth" to the rumors. He didn't say that "Disney isn't for sale." All he said (at least according to this report) is that the rumors are "pure speculation" -- which of course, they would have to be, since both Apple and Disney would have to be very tight lipped if there were any discussions at all. But just because it's speculation doesn't mean it's not true.  

    That said, I'm not sure that an Apple purchase of Disney makes sense--it would turn Apple into a very different type of company, with a massive investment in entertainment. And that's an area, thus far, in which Apple has chosen to mainly dabble with Apple Arcade and Apple+ streaming. (Which isn't to say Apple+ hasn't produced some incredible shows and movies, not to mention being the first streamer to win a Best Picture Oscar--but they're more of a boutique streamer without the glut of content on Netflix and other platforms.) 
    JaiOh81macxpresswatto_cobra
  • Reply 3 of 10
    To me it sounds like a "non-denial denial." I guess I still remember All the President's Men.

    https://www.youtube.com/watch?v=_CWpgTDy_OE 
    JaiOh81watto_cobra
  • Reply 4 of 10
    JFC_PAJFC_PA Posts: 864member
    Public pronouncements are totally not Apple: so whatever is or is not happening behind the scenes isn’t going to make the rounds of headlines. 

    The Disney archives can be tempting: but how far is Apple willing to go for content? Versus buying hardware such as Rivian etc. 
    JaiOh81watto_cobra
  • Reply 5 of 10
    jdwjdw Posts: 1,168member
    The United States government has antitrust insanity to such an extent that federal regulators probably would never allow such a merger.

    With that said, I did ditch Netflix for Disney+ at the request of my teenage children and thus far it has been a prudent choice.  I did watch a few episodes of For All Mankind when they were free to watch, and while that was interesting, there's still not enough content (legacy content) on AppleTV+ to secure my subscription to the service.
    muthuk_vanalingam
  • Reply 6 of 10
    Antitrust is an issue in M & A with large overlap in businesses—Two grocery chains with a combined 45% of a market following a combination of the companies would not pass muster. Apple buying Netflix would get a serious examination.

    But aside from Apple’s very small ATV+ service and Disney+, there is very little overlap between the companies.

    What they also lack is complementary features. Disney has little to no use for an electronics arm, and Apple has no use for theme parks and cruise ships. For that reason alone, the idea of Apple buying Disney is just too silly to believe. Even though Apple *could* make the purchase (with combination of shares and cash), it has no incentive to do so.

    Just as with Netflix, Tesla, and the rest, there will always be some company a stock analyst says Apple MUST buy, and the supposition is always 100% wrong.
    dewmeFileMakerFellerwatto_cobrabeowulfschmidt
  • Reply 7 of 10
    He didn't say no though...
    watto_cobra
  • Reply 8 of 10
    macxpress said:
    He didn't say no though...
    In what world is "pure speculation" not a clear statement that there is no fact behind the rumour?

    If Apple were to buy Disney, they would get:
    1. A streaming service (that they already have) with a huge back catalogue (that they don't already have)
    2. A merchandising business (that they already have)
    3. A video production company (that they don't have)
    4. A video distribution company (that they don't have)
    5. A theme park operator (that they don't have)
    Disney is a well-managed company (under Bob Iger) so there wouldn't be any headaches in that regard, but we need to recognise that Mr Iger resigned in the recent past and may not want to stay in the job for an extended period. Apple could view this as buying a revenue stream (which is certainly how the vast majority of so-called analysts are perceiving the possibility), in which case it comes down to the cost of the purchase against the expected opportunity cost.

    Apple could equally view this as wanting to control everything that happens at Disney: an industry where they don't have experience in the majority of the activities Disney engages in and where they would invite more regulatory scrutiny. Apple's history is one of buying companies that bring something to the table and then integrating them with the mothership; the one exception to this behaviour is Claris and that was a company spun-off by Apple during the non-Steve days.

    I just don't see it happening. Even if Disney had something that Apple wanted, Apple would find it cheaper and easier to simply license whatever it is, or hire the staff, or buy the business unit - there's no need for Apple to buy Disney as a whole, and no clear benefit to doing so.
    watto_cobra
  • Reply 9 of 10
    MarvinMarvin Posts: 14,880moderator
    there's no need for Apple to buy Disney as a whole, and no clear benefit to doing so.
    It's too much to take the whole company but there's value from the production studios and IP (Marvel, Star Wars, Pixar, National Geographic, ESPN) and their ~200m paid subscribers. 200m subs on $8/month is $19b/year. Currently Disney streaming makes a loss but Apple would likely run it profitably.

    $200b is a steep price and comes with nearly 200k employees, which would double Apple's headcount.

    I imagine that for a company merger they'd have to turn large portions of the business into franchises like the theme parks and not run it themselves and they'd downsize payroll significantly, probably selling off whole divisions of the company.

    From Disney's point of view, they may be in a similar position to George Lucas:

    https://techcrunch.com/2012/10/30/george-lucas-i-sold-lucasfilm-to-disney-to-protect-it/

    Finding a competent CEO to run such a large business is very difficult. They got rid of the replacement CEO Chapek because he wasn't running the company in a way the staff were happy about. Iger is 71, I doubt he wants to be running Disney again and his only options are try to find another replacement CEO or sell it off and Apple's the only option for selling it.

    Maybe Iger should start splitting the business first. If they franchise out the theme parks, there will be way more of them without the heavy costs and they'd be able to open to a lot more customers in developing countries like South America, India and Africa. Australia can get some parks.

    If the Disney company was split into 4x $50b parts (streaming media rights, broadcast media rights, parks, licensing/IP(cinema, Blu-ray, music, live events)), they'd be able to sell it more easily. Companies like Comcast could take the broadcast rights. Apple could have the streaming rights and roll it into Apple TV+. Parks would be franchised or sold to an entertainment/cruise company. Licensing/IP can be Apple or a company like Sony/Warner or the licensing/IP remains as the Disney core company that is much smaller and easier to manage.

    For Disney's shareholders, the profit is what matters in the end. Disney usually makes a few billion a year and it's dropped significantly in recent years:

    https://www.macrotrends.net/stocks/charts/DIS/disney/net-income

    10% of franchise revenue could make half this net income on its own.

    It's only the 25% streaming rights that is worthwhile for Apple and would be worth it for $50b to get 200m subscribers.
    watto_cobramuthuk_vanalingam
  • Reply 10 of 10
    I still maintain that Apple has much to gain with a purchase of Disney - and Disney has much to benefit as well. 

    But if Apple won’t buy them, I wonder how Musk would feel about taking that on… 

    Imagine a Disney/spacex rocket ride to fantasia, Tesla powered monorail, Disney integrated into Tesla infotainment, educational aspects to Disney rides where you actually learn rocket science while escaping into fantasy land, etc. 

    LOL 
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