Disney: The Firesale Is Beginning

Bob Iger, the CEO for Disney, did an incredible job in accumulating prized assets for the company. He went on a spending spree during his first tenure, acquiring properties such as Marvel, Lucas films, and Pixar. All of these catapulted Disney into the forefront of the entertainment world in the eyes of many.

What happened after, unfortunately, is a story of destruction. Disney did not turn those properties into money makers. People are now reporting that Lucas, as an example, is still billions of dollars in the hole and getting deeper each year.

This means that Disney is a dumpster fire ready to burst into flames.

Before going any further, to be fair, some of this is not the company's doing. Technology changes things and Netflix entering the market with streaming gave a false impression for these media companies.

The view was streaming was the Golden Goose, something that has proven to not be the case for anyone not named Netflix. All are losing large sums of money.

Disney also got caught up in cord cutting, something that is affecting ESPN. That, coupled with the new mediums vying for eyeballs is causing havoc on the company's profitability.

Now we are starting to see the first signs of a fire sale.

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ABC On The Block

Bob Iger make his career at ABC. This is his background and something he knows intimately.

It is also a warning of things to come.

According to reports, Disney is having talks with Nexstar to sell the linear television assets. This would include ABC.

Why would Disney do this?

The answer, as always, is money. It is in need of cash after looking to close the Hulu deal. The company is also seeing many divisions starting to turn south. All of this means properties are going to hit the market.

Of course, ABC is not the first to do so. Iger talked about ESPN and the fact the company was looking for partners. The reality is that this is likely an unsellable network since nobody in their right mind is going to buy it. ESPN's business model is dead. If Disney can go direct-to-customer, so can the sports leagues.

That is what they are likely to do in the future.

The Transition To Web 3.0

Disney is not part of the future.

This is something that can be said for many of these media companies. Their time is quickly passing.

My theory here is simple: look at the rise of alternative networks that are outside of Hollywood and New York.

Take Valuetainment as an example. This is a broadcast company that was set up by a guy from the world of finance. It operates (I believe) out of South Florida. The main show/podcast is 4 of then around discussion topics of the day. It could be regarded as something similar to The View (or whatever the similar show is on FoxNews).

The point is this is providing the same thing as the traditional networks. While the audience is likely smaller than the others, it is pulling eyeballs. The videos are on YouTube and there is likely a subscription available on the website.

Here we are seeing a powerhouse forming. Patrick Bet-David offered Tucker Carlson $100 million after his departure from FoxNews. That is some heavy cash being put out by a non-mainstream channel.

Of course, this is all operating within the Web 2.0 sphere. The next transition is to Web 3.0. Here is where smaller players along with tokenization can radically alter things. We will see politics, sports, news, and opinion shows all cropping up. With the advancement of artificial intelligence, we are going to see shows created on a shoe-string budget. This is likely true for feature films.

Disney's Demise

All of this is icing on Disney's demise. It is getting hit on many fronts. Is the company destined for bankruptcy? That I cannot answer. It is likely that downsizing will happen as other entrants take customers away.

The mainstream media is under attack. Distribution of content was altered due to the Internet. Now, with AI, content creation is going to see similar disruption.

This is going to allow people from all over the world to generate feature film quality content. No longer will the major media firms has a monopoly on the ability to produce and distribute the content.

Disney is one of the top entertainment properties there is. That means it is also likely to suffer one of the larger falls.

Posted Using LeoFinance Alpha