Walt Disney announced the company will be merging its TV networks, film studios, and direct-to-consumer groups into one as themes parks continue to take a hit due to COVID-19.
Video Transcript
SEANA SMITH: Disney is out saying that it is restructuring its media and entertainment divisions, a move that is going to focus the company more on streaming. The stock here jumping after hours, was up just around 4%. Taking a look at where it is right now, up just over 4% at this point, above $130 a share.
Andy, this move is pretty interesting. I mean, we talked about the growing importance of the streaming business, not only with Disney, but a slew of companies here over the past several months. Of course, the pandemic has something to do with this. But this really shows just Disney doubling down on its Disney+ strategy here moving forward, and also just bringing up the importance of Disney+ to the company moving forward.
ANDY SERWER: Yeah, there’s that. There’s a lot of subplots here, too. Bob Chapek, the new CEO, still fairly new CEO Disney, obviously, has his hands full, with part of the business not running at all, which is to say parks. And then you’ve got the theatrical part of the business under extreme duress. That’s not really running at all. We’ll leave ESPN aside.
So this says streaming is front and center for the business. Then you’ve got– elevated the gentleman who’s going to be running this, a guy named Kareem Daniel, who’s really being elevated tremendously. I mean, he’s head of consumer products of the parks. And so this is a big step up for him, which is interesting, for those people who like to watch the military parades and Hollywood kind of stuff, because this guy’s stock is way on the rise.
And then another subplot going on, too– let’s not forget this, Seana– Dan Loeb, right? I mean, remember, he put out a letter just last week saying don’t spend any money at all except on creating content. Suspend the dividend permanently.
So a lot going on at Disney right now. This is a big move, maybe focusing the company, consolidating, elevating someone, maybe addressing an activist shareholder. So a lot of plates in the air here.
SEANA SMITH: Yeah, it’s interesting there bringing up Dan Loeb, because, like you said, last week he called on the company to suspend its $3 billion dividend to divert more money towards Disney+. And he is one of Disney’s largest shareholders, I believe. He bought more shares earlier this year at the beginning of the year. So certainly an interesting move here from the company.
But a lot to unpack. Again, though, taking a look at shares here after hours, after announcing that major reorganization in the company, the stock up just over 4%. So certainly a name to keep in mind or to keep in focus as we turn our attention to tomorrow’s opening bell.
