Category: DIS

DIS – Group of unions call on Disney workers they represent to vote against contract offer

A group of unions said the Walt Disney World workers they represent should vote against the contract offer from the entertainment company, according to a media advisory.

The six unions, which are members of the Service Trades Council Union (STCU) and represent 45,000 Disney World employees, are “recommending that our members vote no on Disney’s contract proposal to keep fighting for the raises workers need,” according to the media advisory posted Friday by union Unite Here. The vote is slated to take place in the coming week. 

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In the advisory, the unions said Disney was “proposing raises of $1 a year for most workers,” something they argued was “not enough to pay for the cost-of-living crisis that workers are facing in Central Florida.” The unions said they were conducting a press conference on the matter late Friday afternoon.

DISNEY DIVIDE: HOW DISNEY WORLD CATERS TO BIG SPENDERS WHILE WORKING FAMILIES PAY THE PRICE

“In the simplest term, we are looking for a wage increase that respects the inflationary pressures that the Workers at Walt Disney World have faced in the past year,” Paul Cox, president of IATSE Local 631, told FOX Business. 

Magic Kingdom at Walt Disney World

Crowds pack and fill Main Street USA at the Magic Kingdom Park at Walt Disney World in Orange County, Florida, on June 1, 2022. (Joseph Prezioso/Anadolu Agency via Getty Images / Getty Images)

He argued that Disney’s contract offer of $1 in the first year “does not meet that.”

In December, inflation measured by the consumer price index dropped 0.1% month-over-month but rose 6.5% year-over-year. The costs of groceries and shelter respectively saw both monthly and annual increases, as previously reported by FOX Business.

Cox acknowledged that some workers would get more than $1 in the first year but said many workers “represented by Disney’s contract offer will not.”

“All workers deserve an increase that recognizes the realities facing American workers, not just a few,” he said.

Disney+ logo

Attendees are reflected in the Disney+ logo during the Walt Disney D23 Expo in Anaheim, California, on Sept. 9, 2022. (PATRICK T. FALLON/AFP via Getty Images / Getty Images)

“This very strong offer provides our Cast Members with a nearly 10% average increase immediately and guaranteed raises for the next four years with every single non-tipped Cast Member promised at least a $20 starting wage during the contract, and the majority seeing a 33% to 46% increase during that time,” Andrea Finger, a spokesperson for Disney, told FOX Business.

DISNEY’S SPLASH MOUNTAIN RIDE WATER SELLS ON EBAY FOR THOUSANDS FOLLOWING CLOSURE OF BELOVED RIDE

Under the proposed contract, the wages of full-time, non-tipped cast members would be higher than Florida’s minimum wage by at least $5 every year, Disney said. In the Sunshine State, the minimum wage is expected to incrementally rise to $15 by 2026, according to Axios Tampa Bay.

The entertainment giant also said that in year one of the contract, per-hour wages for nearly one-third of STCU cast members would go up 16%. In that year, a quarter of non-tipped STCU positions would see their wages reach $20 per hour, also according to Disney. 

Walt Disney World in Orlando

The entrance to Walt Disney World on March 16, 2020. (Paul Hennessy/SOPA Images/LightRocket via Getty Images) / Getty Images)

The pay of some positions like housekeepers and bus drivers would become at least $20 per hour when the contract goes into effect, Disney said, while those for culinary cast members would start at a $20-25 range. 

FILING REVEALS EYE-POPPING AMOUNT FORMER DISNEY EXECUTIVE EARNED DURING HIS BRIEF TENURE

The contract proposal, among other things, also includes the same pension as currently exists and adds another option for 401(k)s, according to the company. 

At the beginning of October, the company had some 220,000 total employees, of which roughly 78% were full-time, according to the annual report Disney filed in late November. Of the total headcount, about 166,000 were in the U.S., it said at the time.

DIS – Disney Reorganization Looms Ahead Of First Earnings Report Since Bob Iger’s Return

The initial exuberance and relief following Bob Iger’s return as Disney CEO has been replaced by anxiety as speculation about a pending corporate restructuring is intensifying — and with it, rumors about the layoffs that are likely to follow.

Rumblings of a new org-chart unveiling are growing louder amid mounting pressure on the company (including from activist investor Nelson Peltz) to stage a rebound with Iger back at the controls. Details on the restructuring moves, which could potentially include some sort of consolidation within the company’s marketing operations as well as at Disney Television Studios, are likely to emerge soon and could coincide with the company’s next quarterly earnings report February 8, sources tell Deadline.

And then there is the future of the Disney Media and Entertainment Distribution executive ranks.

Iger didn’t waste time issuing one high-profile pink slip after replacing Bob Chapek last November; not even a full day after his restoration to the corner office, DMED chairman Kareem Daniel left the company. Iger had made no secret of his dislike of DMED, which was created by Chapek as a way of centralizing distribution decisions under Daniel, a Chapek loyalist. The division mainly succeeded in fomenting resentment and mistrust, taking decision-making power away from the company’s creative leaders and straining creative relationships.

Disney did not respond to a request for comment from Deadline.

While DMED is going to be dismantled, there are questions about how the unwinding will happen and about the fate of the remaining executives. Atop the list are Debra OConnell, president of Networks for Disney Media & Entertainment Distribution, and her top lieutenant, head of business operations Chuck Saftler, both of whom highly respected within the company and beyond.

The longest-tenured FX employee having joined the network in December 1993, Saftler was an integral part of FX Networks chairman John Landgraf’s team before he was promoted to the DMED post. Saftler has been closely involved with the networks in his current role – he is credited with the recent ratings resurgence at FXX through the programming of off-network comedies and movie acquisitions. There are different scenarios about what would happen to him, but it is conceivable he could remain part of the close-knit group of FX executives who have been together for decades.

Another area drawing a lot of speculation is Disney Television Studios, which consists of 20th Television, ABC Signature, 20th Animation and Walt Disney Television Alternative. (Additionally, there are two other separate TV production arms, FXP and Searchlight Television.)

The situation is reviving questions raised at the time of Disney’s $71.3 billion acquisition of Fox assets as to whether Disney would keep then-ABC Studios and 20th Century Fox Television separate. Ultimately, they did remain stand-alone studios with their own infrastructures, though Fox 21 Studios was folded into 20th TV, which is now run by Karey Burke. Meanwhile, 20th Television Animation was made a separate division led by Marci Proietto, and ABC Studios was rebranded as ABC Signature with Jonnie Davis at the helm.

The consolidation chatter is even stronger this time around, with various scenarios circulated about what divisions could be merged. Everything seems to be on the table.

A successful potential consolidation of 20th TV and ABC Signature will depend on melding their two very different cultures. “Can two fried eggs become an omelet?” a well-positioned observer asked. Dana Walden, who has risen to the role of chairman of Disney General Entertainment Content, does know plenty about bridging divides as the highest-ranking former Fox exec now in Burbank.

Walden just recently consolidated another area of the division she took over last summer, bringing back together publicity and communications years after they had been split. One position was eliminated as a result, with more cuts likely. 

Deadline has heard that the movie studio, currently riding the success of Avatar: The Way of Water, is not expected to be part of the pending cuts. Any Disney layoffs out of the reorg may be smaller and more targeted than what we have seen from other Hollywood outlets in recent months, we hear. Part of that is the sprawling nature of the company. Now that some of the Chapek-era pricing issues have been addressed, and Iger has gone on a few team-building visits to Anaheim and Orlando, the ruptures at the revenue-rich Parks, Experiences and Products division seem to be starting to heal.

Reshaping the company won’t be easy, of course. Disney, like other media companies, is contending with the ongoing decline of linear television and the high cost of streaming, against the backdrop of a fragile economy and uncertain advertising climate.

At the heart of Disney’s bottom line issue, we’re told, is that sexiest of business lines: accounting.

Under the Byzantine nature of the company’s current system, the production company of a particular program or series sends a program to DMED. Then, via an inter-company transaction, DMED reimburses the production for the cost of said program or series. Most importantly to Wall Street, all losses sit on DMED’s books – which is not a good look. “How we fix that will determine in no small way, how Wall Street reacts,” said a Tinseltown dealmaker of Disney’s dilemma.

A primary focus of the cost-cutting effort is stimulating the stock price, whose decline prompted Peltz to initiate a proxy battle. Shares at the end of 2022 bottomed out at a multi-year low after Chapek presided over a disastrous quarterly report. As SEC filings after his exit made clear, he had lost the confidence of the board earlier in the year, further preventing a smooth re-emergence from the Covid cave. Peltz says he wants a seat on the company’s board of directors, a pitch that will go to a vote in March during what is apt to be the liveliest shareholder meeting since the Roy Disney-Michael Eisner affair in 2004.

Regaining the trust of the Street is Job 1 for Iger and the board. “Whatever it takes, whatever costs they have to cut, that’s what they’ll do,” one industry insider told Deadline. “Getting back in the Street’s good graces solves the Peltz and other activist investor issues, it solves shareholder grumbling, it solves everything, for now,” the insider added.

Disney stock, like many media issues at the start of this year, seems refreshed. While still well off its recent high point of $189 in early 2021, it closed Thursday up 1.5% at $108.45 and has risen 24% in 2023 to date.

Anthony D’Alessandro and Jill Goldsmith contributed to this report.

DIS – Disney Reportedly Considering Purchase Of Spider-Man Rights Or Film Division From Sony: What Investors Should Know

Over the years a battle has brewed between the Walt Disney Company (NYSE: DIS) and Sony Corp (NYSE: SONY). The battle stems from the controlled interest Sony has in one of the most popular comic book characters of all-time: Spider Man.

What Happened: In the 1990s, a near bankrupt Marvel sold the rights to its Spider Man character to Sony Corp. Several other characters were sold to movie studios to bring in cash to the struggling comic book company.

In 2009, Disney acquired Marvel for $4 billion and gained access to a huge library of characters. Since then, the entertainment giant has been able to turn out multiple blockbuster movies in the Marvel Cinematic Universe and dominate the domestic and worldwide box office.

Disney has clashed with Sony over how to develop future Spider Man movies and how to share the brand and split profits. A new report shows Disney could be sniffing around to acquire Spider Man from Sony again.

GiantFreakinRobot reports that Disney is in talks with Sony to acquire Spider Man rights or the entire film division from the company.

Related Link: Disney Stirkes Deal With Sony To Stream Movies After Netflix Window Expiry: What You Should Know 

Why It’s Important: Tom Holland’s run as Spider Man is set to come to an end with “Spider Man: No Way Home,” scheduled for a December 2021 release.

Holland appeared in six movies across the Spider Man and Marvel Cinematic Universe, including “Captain America: Civil War,” “Avengers: Infinity War” and “Avengers Endgame” all Disney movies.

“Spider Man: Homecoming” grossed $334 million domestically and $880 million worldwide. “Spider Man: Far From Home” grossed $391 million domestically and $1.13 billion worldwide.

In 2019, Disney reached a deal to have the merchandising rights for Spider Man and share in profits for Spider Man related movies and have several Marvel characters also appear in some Spider Man movies. While the merchandising rights are said to be worth more in revenue and profits than the box office figures, Disney would likely love to get it hands on Spider Man and a lineup of other characters to utilize in its Marvel Cinematic Universe of movies and shows for theaters and Disney+, its streaming service.

Disney offered a reported $4 billion to $5 billion for the rights to Spider Man in 2019. Reports are unclear if that price tag has gone up or down since then between the two companies.

Disney acquired the movies segment from Fox Corp (NASDAQ: FOX), which gave it control over the X-Men and Fantastic Four franchises, two Marvel properties it lacked control over. Disney also gained control back of several characters like Punisher and Daredevil that previously belonged to Netflix Inc (NASDAQ: NFLX).

The rumor comes from a smaller publication but shouldn’t be brushed aside as Disney has wanted control over Spider Man for years and an acquisition shouldn’t be surprising at this point.
 

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

DIS – Disney Charging For Fast Passes At Theme Parks, Could This Help The Theme Park Segment Recover Faster?

The Walt Disney Company (NYSE: DIS) was one of many that saw a huge decline in attendance during the COVID-19 pandemic. The company’s theme park segment is showing signs of a recovery due to soaring demand as the parks reopen. The segment could be in for record revenue when at 100% capacity thanks to higher fees for guests and higher ticket prices coming in 2022.

What Happened: Disney is rolling out Disney Genie, a free app that will help with planning a theme park experience. The app will launch this fall and allow guests to order food, book reservations and pay for merchandise.

A paid version called Disney Genie+ replaces the company’s current FastPass and FastPass+ options. Park visitors will have to pay $15 per ticket per day at Walt Disney World and $20 per ticket per day at Disneyland.

“This service will soon be your new personal assistant to help you create your best Disney Day,” Walt Disney Parks and Resorts Vice President Gary Daniels said.

Disney hinted at adding a paid version of line skipping back at the 2019 D20 Expo.

Previously, guests could add a limited amount of fast pass line reservations for free with their ticket. Visitors will now have to pay for this service and only selected rides will be included for the new paid service. Additional fees will be charged for reserving faster line access to the more popular rides.

Related Link: Disney Q3 Takeaways: Big Earnings Beat, Hulu And Disney+ Subscriber Numbers Rise, ARPU Falls

Why It’s Important: Disney’s wording of Genie is all about the guest experience, discussing wait times and better service but it doesn’t take long to realize that they will see incremental revenue for something that was previously offered for free.

Disney averaged 57,000 guests per day at its parks prior to the pandemic, according to reports. If even 25% of people pay the $15 a day for the right to book access to a faster line, it would translate to over $78 million in annual revenue.

Disney will also raise its ticket prices in 2022, according to Blog Mickey.

All of these factors could add up to a huge one to two year period for Disney’s theme park division with pent-up demand from the pandemic and increased fees for park visitors.

Disney’s Parks, Experiences and Products segment saw revenue up 100% to $4.34 billion in the third quarter. Several analysts called out the strength of this segment as being ahead of recovery schedule.

Price Action: DIS shares closed Friday at $175.12. Shares are down 3% year-to-date and traded as high as $203.02 over the last 52 weeks.

 

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

DIS – Disney is replacing this beloved free perk at its American theme parks

Cutting the line at your favorite Disney theme park attractions is now going to cost you.

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is set to roll out a new planning service, called Disney Genie, for visitors to its theme parks in California and Florida, which is designed to help guests avoid spending too much time in long lines. The Disney Genie service will be introduced to Walt Disney World in Florida and Disneyland in California this fall.

As part of the change, a new, paid program is set to replace the free FastPass program at the theme parks.

FastPass was first introduced in 1999, and it essentially allowed visitors to Walt Disney World and Disneyland to skip the stand-by lines at popular attractions for free. In reality, FastPass was a virtual queue system: Guests would get a ticket they could use at a reserved time to bypass the regular stand-by line, but essentially they were waiting in a virtual line.

Now to take advantage of those same perks, Disney theme park visitors will have to pay as much as $80 per day for a family of four.

“While the FASTPASS, FastPass+ and Disney MaxPass services will be retired, we’re incredible excited about the flexibility and choices Disney Genie service provides,” the company said in a blog post announcing the changes.

Here’s what Disney theme park travelers need to know:

Say hello to Genie+ and Lightning Lanes

There will be an optional, paid add-on to the standard Disney Genie service, called Genie+, that will enable Disney theme park visitors to skip the stand-by lines at popular attractions. At Disney World, the service will cost $15 per day per person, while at Disneyland it will cost $20 per day per person.

There will be more than 40 attractions available for Genie+ bookings at Walt Disney World, and more than 15 attractions at Disneyland. The list of attractions has not yet been released, but Disney said it will be similar to what was previously available through the old FastPass system.

A look at what guests can expect when they use the upcoming Disney Genie service.


Courtesy of Disney

The FastPass lines at popular attractions will be known as Lightning Lanes. To skip the line, guests will need to reserve a time using the Disney Genie mobile app. They will be able to start making reservations beginning at 7 a.m. the day of their visit to a Walt Disney World park or when the parks open at Disneyland.

Guests will be allowed to have one Genie+ reservation at a time — once a reservation is used, they will be able to make another. Visitors who visit more than one Disney park in a day will be able to use Genie+ at any park they visit.

The Genie+ program will come with some perks. At Disneyland, guests who purchase Genie+ will also get complimentary downloads of pictures taken through PhotoPass, such as photos taken on rides. At Walt Disney World, Genie+ purchasers will be able to try out augmented reality technology on their phones. The service also comes with complimentary audio experiences at both the California and Florida resorts.

Skipping the line on some rides is going to cost people extra — even if they purchase Genie+

The most popular attractions at Disney theme parks won’t be part of Genie+. To skip the lines for these, visitors will need to pay separately, though Disney has not yet said how much the perk will cost.

This will be the case for up to two attractions at each park. Disney has not yet released a full list of which attractions this will be the case for, but examples they cited include the upcoming Remy’s Ratatouille adventure at Epcot, Radiator Springs Racers at Disney California Adventure, Seven Dwarfs Mine Train at Magic Kingdom and Star Wars: Rise of the Resistance at Disney’s Hollywood Studios and Disneyland.

These reservations will be able to be booked starting at 7 a.m. for visitors staying at Walt Disney World hotels. Other visitors at Walt Disney World, and everyone visiting Disneyland, will otherwise be able to make to reservations when the parks open each day.


‘If they charge $20 per FastPass, relatively few people are going to buy that. So, it won’t impact the standby line as much.’


— Len Testa, president of travel website Touring Plans

As with the rides on Genie+, traditional stand-by lines (or virtual queues) will be available for guests who don’t wish to pay for the upgrade. Guests can also purchase Lightning Lane access for these rides and forego Genie+ if they so choose.

Some travel experts believe that the added cost of these perks, which were essentially free in the past, could upset some guests, including annual passholders. The cost of Genie+ is comparable to the cost of MaxPass, a paid FastPass program that was introduced at Disneyland Resort in recent years.

“If you’re already paying $150 a day to get into the park, to tell somebody that you’ve got to pay another $100 for your family to get on the best rides in the park — that’s going to be a hard message to sell,” said Len Testa, president of travel website Touring Plans.

The calculus for families could come down to the value of paying for the ability to skip lines — and that will depend on ride capacity. People with Genie+ reservations will have priority over people in the regular stand-by line. If Disney chooses to allow up to 70% of a ride’s capacity to be set aside for Genie+, that could make it a better value, since that would means longer stand-by lines. (The company said that how the capacity divvies up will be similar to what was in place with the previous FastPass programs.)

“This shouldn’t be that bad because fewer people are going to use paid Fast Pass than they would free Fast Pass,” Testa said. “If they charge $20 per FastPass, relatively few people are going to buy that. So, it won’t impact the standby line as much.”

‘This is something that will be copied and passed around’

Even for visitors who decide against paying to skip lines, Disney argues that the new Disney Genie service will help them avoid spending too much time just waiting in lines.

The new service takes advantage of machine learning technology and algorithms to track where crowds are in the theme parks and then make recommendations to visitors. Visitors can select in advance which attractions they most want to visit, and it will notify them of when they should head to that ride based on the wait times in the park. Guests will also be able to check forecasts for wait times on rides for later in the day based on crowd sizes.


‘It’s going to allow them to eat, drink and spend a little bit more — which is going to be great for Disney — because they’re not waiting in line so long.’


— Dennis Spiegel, president of industry consulting firm International Theme Park Services Inc.

The Disney Genie services will be built into the existing apps for Disneyland and Walt Disney World. In addition to tracking ride wait times, the app can also be used to make dining reservations at table-service restaurants or for mobile ordering at counter-service eateries. It can then give recommendations of rides nearby with low wait times to visit before or after a meal.

“It’s going to be revolutionary for the theme park industry,” said Dennis Spiegel, president of industry consulting firm International Theme Park Services Inc. “This is something that will be copied and passed along to all the operators.”

To Spiegel, the service will allow people to be more spontaneous when they visit a theme park and have to do less advance planning than they once did. Plus, the way that algorithms will track and predict crowd sizes and wait times will give visitors more control over their experience, he argues.

“This is going to allow people to move smoother through their visit,” Spiegel said. “And it’s going to allow them to eat, drink and spend a little bit more — which is going to be great for Disney — because they’re not waiting in line so long.”

DIS – Disney's 'Free Guy' Leads US Weekend Box Office With $28.4M

“Free Guy,” the science-fiction comedy from The Walt Disney Company’s (NYSE: DIS) 20th Century Studios, reigned at the U.S. weekend box office with $28.4 million in ticket sales across 4,164 theaters.

What Happened: “Free Guy” also took in $22.5 million from 41 overseas markets. Unlike other Disney features released this year, “Free Guy” was exclusively distributed in theaters and did not have a simultaneous Disney+ release – the film is slated to go on the streaming service 45 days following its Aug. 13 opening.

Ryan Reynolds, who stars in “Free Guy” as a bank teller who discovers he’s actually a non-player character in an open world video game, tweeted that Disney has already given the green light for a sequel.

“Aaaannnnd after 3 years messaging as an original IP movie, Disney confirmed today they officially want a sequel,” Reynolds tweeted. “Woo hoo!! #irony.”

Related Link: Mike Richards And Mayim Bialik Named New Hosts Of ‘Jeopardy!’

What Else Happened: “Free Guy’ outpaced the weekend’s two other new releases: the horror-thriller “Don’t Breathe 2,” a sequel to the 2016 feature from Sony Entertainment’s (NYSE: SONY) Sony Pictures Group, placed second with $10.6 million in ticket sales from 3,005 theaters, while Aretha Franklin biopic “Respect” starring Jennifer Hudson from United Artists Releasing came in a disappointing fourth in box office earnings with $8.8 million on 3,207 screens.

Disney’s “Jungle Cruise,” now in its third week in theaters, took the third place ranking with $9 million from 3,900 screens while last week’s box office champ, “The Suicide Squad” from AT&T’s (NYSE: T) Warner Bros., dropped into fifth place with $7.7 million on 4,109 screens. “Jungle Cruise” and “The Suicide Squad” are also being released on Disney+ and HBO Max, respectively.

What Happens Next: The next major films going into national release for the Aug. 20 weekend include Lionsgate’s (NYSE: LGF-A) “The Protégé,” an action-thriller starring Michael Keaton, Maggie Q, and Samuel L. Jackson, and “The Night House,” a psychological horror film from Disney’s Searchlight Pictures, starring Rebecca Hall.

Also opening on Friday is Warner Bros.’ science-fiction thriller “Reminiscence” starring Hugh Jackman and “PAW Patrol: The Movie,” a big-screen adaptation of the popular animated children’s series from ViacomCBS’ (NASDAQ: VIAC) Paramount Pictures.

Defending Depp: Elsewhere in the cinema world, Spain’s San Sebastian Film Festival is pushing back against criticism for its decision to present actor Johnny Depp an honorary award. Depp’s professional reputation has been damaged following his unsuccessful libel lawsuit in a British court against the tabloid The Sun, which claimed he assaulted his ex-wife Amber Heard.

BBC News reported that the nonprofit Women’s Aid Federation criticized the festival’s decision, stating, “When a perpetrator is celebrated, allowing them to continue to garner success and public approval suggests that abuse is acceptable and does not matter.”

But the festival issued its own statement that noted “Johnny Depp has not been arrested, charged nor convicted of any form of assault or violence against any woman. We repeat: he has not been charged by any authority in any jurisdiction, nor convicted of any form of violence against women.”

Depp is also scheduled to receive an honorary award at the Czech Republic’s Karlovy Vary Film Festival this month. However, the fallout from the domestic abuse allegations against him appears to have dimmed his star value in Hollywood – Warner Bros. dropped the actor from the role of Grunewald in the next film in the “Fantastic Beasts” franchise and Depp’s 2020 film “Minimata,” has yet to be seen in the U.S. “Minimata” director Andrew Levitas accused the film’s distributor, MGM, of trying to “bury the film” because of Depp’s presence.

Photo: Ryan Reynolds in “Free Guy,” courtesy of Disney.

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

DIS – Will Disney Accidentally Solve Hollywood's Biggest Problem?

It’s probably not the way Walt Disney (NYSE:DIS) scripted it out, but when it comes to solving Hollywood’s film distribution problem, it seems as if all roads lead to the House of Mouse. Free Guy is the latest Disney movie to hit theaters this weekend, and it’s approaching distribution in an entirely different way from the entertainment giant’s recent releases. 

Disney is also being sued by Scarlett Johansson, the star of this year’s highest-grossing multiplex release. Disney didn’t plan Free Guy‘s distribution strategy. It also obviously didn’t want to trade legal fisticuffs with the Black Widow star, especially since another movie deal has come undone as a result of the standoff. However, as unintentional as these events may be, this could be the reason there’s a projector light at the end of the movie production tunnel. 

A couple watching a film at a movie theater with popcorn and a beverage.

Image source: Getty Images.

Not-so-free guy

Since August of last year, Disney’s approach to its planned theatrical releases has taken one of two paths. Its biggest potential blockbusters hit theaters at the same time they were available through Disney+ Direct Access for anyone willing to shell out $29.99 for unlimited streaming access to the new release. Black Widow, Cruella, and Jungle Cruise have gone this route, and it’s not a surprise that they’re the studio’s three top-grossing films of 2021 in the U.S. market. These films will be available to all Disney+ subscribers three months after their theatrical premiere. 

The balance of Disney’s slate has been either pushed out to a later release date or just dropped onto Disney+ for all of the platform’s existing subscribers. We’ve seen Soul and more recently Luca go this route.

Free Guy is breaking the mold in that it’s the first Disney-owned release in more than a year to play exclusively in theaters. It’s also a tighter than usual window of movie-house exclusivity, as Free Guy can be streamed legally 45 days later. This wasn’t by Disney’s design. Free Guy — like next month’s Shang-Chi and the Legend of the 10 Rings — are properties the media juggernaut inherited with its acquisition of 20th Century Fox assets. They are tied to earlier release deals. Making matters seemingly worse, when that 45-day window of theatrical exclusivity is over, they are going to be available on Disney+ rival HBO Max first. 

This isn’t a bad thing. Disney is now learning a lot about many different flavors of distribution. It will be better suited to work the right levers if audiences come back to movie houses or if they stay away, either as a result of COVID-19 escalation or just the evolutionary migration to home-based streaming. 

Johansson’s lawsuit over her Black Widow contract may be harder to sugarcoat, but this is an inevitable battle between studios and top talent. Johansson negotiated her contract to take a cut of the box-office receipts before the pandemic, and before premium digital delivery was disrupting the traditional distribution channels. This is a fight that has to happen, especially since the future may not be as rosy as the past for the industry in terms of sheer revenue generation. Both parties are fighting for bigger slices of a thinning pie. Just as we’re seeing salary caps for some sports leagues start to contract as viewership diminishes, the industry is going to have a painful reality adjustment. Once everything is reset — and you may as well spill blood now rather than later — the better it will be for all sides to negotiate win-win contracts.

Disney didn’t pick its cards. It was dealt the Free Guy card. It didn’t want to lock horns with Johansson in a legal battle that now finds a production deal for a Tower of Terror-themed movie to fall apart. It all had to happen for the media stock to once again be the industry bellwether and tastemaker. As they say in The Mandalorian on Disney+, this is the way.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

DIS – Disney Shares: $210 Target From RBC Capital

  • The shares of Walt Disney Co (NYSE: DIS) received a price target increase from $202 to $210 by RBC Capital. These are the details.

The shares of Walt Disney Co (NYSE: DIS) received a price target increase from $202 to $210 by RBC Capital. And RBC Capital analyst Kutgun Maral is maintaining an “Outperform” rating on the company shares.

Maral noted that while a number of DTC services had posted softer than expected subscriber results, Disney bucked industry trends and beat the expectations in terms of net adds for Disney+. There is also clear visibility for continued momentum for at least the next 2 quarters due to a healthy pipeline of market launches and expansions, the upcoming Disney+ Day on November 12th, and a robust content slate.

Disney’s diluted earnings per share (EPS) from continuing operations for the quarter was an income of $0.50 compared to a loss of $2.61 in the prior-year quarter. And excluding certain items, the diluted EPS for the quarter increased to $0.80 from $0.08 in the prior-year quarter. And the diluted EPS from continuing operations for the nine months ended July 3, 2021, increased to income of $1.02 compared to a loss of $1.17 in the prior-year period. Excluding certain items, the diluted EPS for the nine months decreased 14% to $1.91 from $2.22 in the prior-year period.

The Direct-to-Consumer revenues for the quarter increased 57% to $4.3 billion and operating loss decreased from $0.6 billion to $0.3 billion. And the decrease in operating loss was due to improved results at Hulu, partially offset by a higher loss at Disney+.

The most significant impact on Disney’s operating income since the second quarter of fiscal 2020 from COVID-19 was at the Disney Parks, Experiences, and Products segment due to revenue loss. And even though results have improved in the current quarter compared to the prior-year quarter from reopening parks and resorts, the company continues to be impacted by the suspension of cruise ship sailings (with an ongoing return of cruise ship sailings beginning in July 2021) and reduced operating capacities across many of the company’s Disney Parks, Experiences and Products businesses. They estimate segment operating income for Disney Parks, Experiences, and Products segment in the current 9-month period declined $1.6 billion compared to the prior-year nine-month period due to COVID-19.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.