Apple + Disney

[fly757au]

Odds of Apple buying Disney?

I think it is a real stretch financially. They could do it, but would lead to a LOT of financial pitfalls for Apple.

I know Apple would love the media part of it, but not sure about the theme parks.

Do you think Apple would be a good custodian of Disney, the parks in particular?

 

[seascapemvy]

Odds of Apple buying Disney?

I think it is a real stretch financially. They could do it, but would lead to a LOT of financial pitfalls for Apple.

I know Apple would love the media part of it, but not sure about the theme parks.

Do you think Apple would be a good custodian of Disney, the parks in particular?

That would be enough to make me sell my DVC, buy another timeshare near Universal and start going there.

 

[rteetz]

Odds of Apple buying Disney? I think it is a real stretch financially. They could do it, but would lead to a LOT of financial pitfalls for Apple. I know Apple would love the media part of it, but not sure about the theme parks. Do you think Apple would be a good custodian of Disney, the parks in particular?

Two major companies don't see it happening. Apple being the major tech company they are were tied to films a bit before when Steve jobs owned Pixar. Disney has films, tv/media, parks, merch, and so much more. Apple has tech tech and more tech. The numbers on a buyout like this would be the most ever and would produce a mega company like never seen before. The numbers may even be close to a trillion dollars I don't see either company wanting that.

 

[dawnhaze]

I could maybe see media/tech partnerships or something, but not either company buying the other. It would be too massive of an undertaking.

 

[fly757au]

I'm guessing Disney value is in the $150B ramge

 

[fly757au]

Also, Iger is on the Apple board. Not that that means anything in regards to a buyout. Just an observation. Also, a CEO/Company Board's job is to create value for the stakeholders. If a move does that, it is the boards responsibility to investigate and pursue it.

 

[fly757au]

I could maybe see media/tech partnerships or something, but not either company buying the other. It would be too massive of an undertaking.

I somewhat agree. Disney owns a ton that Apple would love to have access to. The Disney library's, ESPN, and a big stake in HULU.

 

[Silock]

Well, it would certainly help make the MDE app WAY better. Disney sucks at technology, so it would help there, for sure.

Don't see it happening, though.

 

[jeffbear]

I can't see Apple buying out Disney without a HUGE financing partnership with somebody. And that kind of scenario generally works out badly for all involved.

Now ... I could see Disney partnering with Apple on some of their tech concerns. That would make perfect sense.

 

[Andrew015]

I saw a Washington Post blog yeterday suggesting that Apple should buy Disney (I'm guessing the OP read the same thing, hence the reason for this thread: http://www.washingtonpost.com/blogs...hy-he-thinks-a-deal-is-frighteningly-obvious/). While there are definitely some undeniable synergies, I just never see this happening. One is an entainment company, the other a tech company. Companies this large and in completely different market segments just do not pair up well together. When getting too far away from their core strengths and strategies, good things just do not happen.

For reference, as of last month, Forbes has Apple's market value at $483B and Disney's at $143B (http://www.forbes.com/global2000/list/).

 

[Andrew015]

I can't see Apple buying out Disney without a HUGE financing partnership with somebody. And that kind of scenario generally works out badly for all involved.

Per the Washington Post blog that I referenced above, Apple actually has $151+ Billion in cash reserves. Again, Disney's estimated market value is $143B. So technically speaking, Apple wouldn't need any financial help in brokering such a deal. Naturally, Disney would expect a significant premium in any potential sale, so Apple would need a little more than what they have in cash reserves, but to think they couldn't secure necessary financing is not even a concern.

The article also mentions that the majority of Apple's cash reserves are offshore. So to pool their resources together for such an acquisition, they would have to pay a huge sum in taxes on their nest egg to pull off the deal. This is another major reason why I do not see this happening.

 

[tjkraz]

The economics of it aren't even worth considering. It wouldn't have to be a straight cash purchase. There are other avenues available (finance, stock swap, etc.)

The question is whether Apple would be interested. On many levels it makes sense. In the media world, content is king. While Apple would have to live with any existing deals Disney has in place (like streaming through Netflix), those deals will eventually expire. Then Apple would have control over an amazing library of film and TV content, not to mention sports through ESPN and more.

There have been rumors for years that Apple wanted to turn its Apple TV set top box into a streaming provider for live TV. Think ESPN, Disney Channel and others available live for a modest monthly fee WITHOUT any cable or satellite provider necessary.

But there are a wide range of industry ramifications to consider, not to mention the complexities of dealing with licensing partners (e.g. NFL would have to approve of how its content is retransmitted on ESPN, most ABC content isn't wholly owned by Disney/ABC.)

Most of Disney's products and services fall outside of Apple's realm, but that can be a good thing. Hardware is cyclical and innovation is key. iPhones and iPads are very good business in 2014...not necessarily in 2024. The reliable revenue stream from Disney's film and TV library, networks, theme parks, merchandise and other products would be a hedge against future struggles in the hardware world.

In many ways the combination makes total sense. But I don't know if Apple would view it as a worthwhile $150 billion dollar expenditure.

 

[Joben]

To those saying a merger of this magnitude can't happen remember Time-Warner and AOL merged in the year 2000 to the tune of 186 billion.

Apple is in competition with Google, and needs to find a way to remain a growth company. Apple may have new inventions in the works, but Disney is a complementary market for them, that has a record of proven growth and foreseeable growth in the future.

These two companies both stand to benefit from if not a merger, then at least a collaboration. Apple will need the media content/library that Disney encompasses. Disney not only needs the tech upgrade(actually they already started doing that as many CM's have an Ipad with them.) but EPCOT has been failing in it's innovation and Imagination, and few corporate sponsors are stepping up to partner with Disney in EPCOT.

There is a history of Hewlett Packard in EPCOT, however recently it seems HP and Apple have been trying to become buddy buddy
http://appleinsider.com/articles/13/02/01/hp-pitches-its-latest-apple-friendly-offerings

so maybe HP won't care about being in the same park as Apple.

I had started a thread about this subject some ten months ago, when my Ipad updated its OS and I found a Disney,ESPN,Yahoo, and one more preset favorite tabs I can't recall, in my home screen.

It makes sense to me, the two companies have been mixing back and forth serving on each others boards and buying up each others stock, they do not directly compete with each other but are in complementary markets. They have similar ideals when it comes to issues of imagination and innovation.

Not sure why this is such a far fetched idea, and this idea has apparently been going on for many years now.

The biggest draw back I see to it happening is that Apple holds it's money offshore and would pay a huge tax to buy Disney.

 

[Andrew015]

To those saying a merger of this magnitude can't happen remember Time-Warner and AOL merged in the year 2000 to the tune of 186 billion.

Not sure why this is such a far fetched idea, and this idea has apparently been going on for many years now.

I don't think any of us have said that it can't or won't happen, but I find it to be unlikely. Apple doesn't need nor want all of what Disney has to offer them, so why are they going to shell out $150 - 200 BILLION for something that they only want ~50% of? Everyone here keeps mentioning "Content". Content is only one piece of the Disney empire (perhaps the largest, but that still leaves a lot that doesn't necessarily "fit" Apple's long-term vision or strategy). Does Apple really want to enter the Theme Park & Attractions realm? I think Apple would be wise to buy the "piece(s)" of Disney that make the most sense and best strategic fit. I doubt that Disney would part with the content alone, so this leads me to believe that a partnership of some kind would be the most likely scenario.

 

[Lewisc]

To those saying a merger of this magnitude can't happen remember Time-Warner and AOL merged in the year 2000 to the tune of 186 billion.
......
The biggest draw back I see to it happening is that Apple holds it's money offshore and would pay a huge tax to buy Disney.

The Time-Warner AOL merger was regarded as a big mistake on the part of Time-Warner.

 

[tjkraz]

The Time-Warner AOL merger was regarded as a big mistake on the part of Time-Warner.

That had more to do with the (once) dramatically overvalued status of AOL. It is the poster child for the Internet bubble of the late '90s, wherein dozens of tech companies were overvalued irrespective of their actual or potential earnings.

Apple / Disney is actually a pretty good parallel for AOL / Time Warner, IMO. At least in terms of the potential business synergy.

Last year Apple posted net profits of over $35 billion. Those are not AOL numbers.

 

[Andrew015]

Profitability (or lack thereof) is not the be all / end all for making a successful pairing of two companies. It has more to do with making a good "fit" in terms of the strategic direction of the company(s). Lack of profitability usually stems from mis-management, but doesn't necessarily mean that the company being acquired doesn't have tremendous value to offer. In many cases, it actually is a good thing for the acquiring side, as it means the company being purchased can be had for less than face value. This is not really relevant to the conversation at hand re: Apple & Disney, as both companies are incredibly profitable. I only bring this up, as much of this conversation has steered towards things like market value and profitability, neither of which would be primary drivers of such a decision.

 

[Suzie13]

God Nooo!!! More chance of Disney buying apple.

 

[ChloroFiend]

About the same chance as seeing Tim Cook talk on an Android phone during keynote IMO.

I'd love to see more of a partnership between the companies....Apple helping develop NextNextGen concepts, maybe stuff for FutureWorld (Innoventions?), that kind of thing. Hell, sponsor a pavilion. Those things I could see....maybe not likely, but with the long history between Pixar and Steve Jobs, who knows.

 

[fly757au]

I think it is more likely than not to see something happen between the two companies.

I'm not saying it'll be a buyout, but something. Apple wants, err needs, what Disney has. It'll be a matter of how bad do they want it.