Disney

Posted on October 16, 2016 by jlrose

by JACK ROSE, AUDREY LEW, and BRITTANY ORTIZ

Disney Logo [1]

Background

Disney is a leading producer, owner, and distributor of media that owns, among many other things, broadcast network ABC; movie studios Pixar, Walt Disney Animation, Marvel, and Lucasfilm; Walt Disney Parks and Resorts that attracted nearly 150 million people in 2015 [2]; and cable sports network ESPN [3]. Between ABC, its affiliates, and ESPN, Disney operates more than 300 channels worldwide, while its movie studios own the rights to The Avengers family and Star Wars [4]. The last Star Wars release became the highest grossing domestic film earlier this year and with another releasing this December, the company’s film division remains strong [5]. However, fluctuating results on the television side have led Disney to invest in new technologies and a desire to expand international reach birthed a new theme park in China, which opened earlier this year.

Corporate Structure

CEO Bob Iger [1]

Disney’s Chief Executive since 2005, Bob Iger helmed the acquisitions of Pixar, Marvel, and Lucasfilm. Since Iger’s promotion from Chief Operating Officer, Disney’s stock price has risen more than $70 while it’s TV division has come to account for half of the company’s profit [6]. Nearing the end of his career, Iger has repeatedly delayed his retirement and most recently set 2018 as the expiration date for his own tenure. His last task will be selecting his successor, after a recent candidate failed to last as heir.

Disney’s Organizational Chart [7]

Beyond Iger, various chairmen run each of Disney’s major compartments and the company’s board of directors is comprised of 11 members. However, it is this organizational chart, distributed by Walt Disney Studios in 1943, that largely explains Disney’s management philosophy [7]. Rather than the typical hierarchy, the chart displays an interlocking web of managers, producers, and creators that are needed to produce a film. This organization is intended to encourage creativity and teamwork by emphasizing collaboration rather than chain of command. Each role supports, instead of merely instructing, another.

Financials

Annual revenue, profit, and net income have increased yearly since at least 2013, as has Disney’s valuation of its assets and balance sheet as whole. Disney’s revenue dwarfs that of most of its competitors in media, exceeded only by Sony and other conglomerates that produce and own as much content as Sony and Disney. Disney’s stock price is similarly higher than most competitors, currently hovering around $100 [8]. The company’s price per share seems to be inextricably linked to the success of ESPN, which is struggling with subscriber losses and adapting to the future (see “Investments in Technology” section below).

Disney’s Stock Price for last two years [8]

Investments in Technology

MLB Advanced Media Logo [11]

Disney’s future focus is in technology as it attempts to revitalize ESPN and stay on the cutting edge of content creation and media. Primarily, in August the company invested $1 billion for a 33% stake in Major League Baseball’s BAMTech, a leading television streaming company. The deal included an option for Disney to take a majority stake in the company down the road. The first collaboration between the two will be BAMTech’s creation of a standalone streaming service for ESPN, which Disney hopes will help ease the network’s subscriber losses and struggling ratings. BAMTech adds 7.5 million paid subscribers across a multitude of streaming platforms to Disney’s already massive user base [9]. The investment in BAMTech isn’t completely black and white, however. Television’s trend toward skinny bundles complicates the relationship between every content producer and cable provider, with Sling, DirecTV, Hulu, and more getting into the live over-the-top business. Disney’s BAMTech investment suggests a possibility that Disney itself could run a direct-to-consumer cable distributor itself [10].

Throughout this year, rumors swirled about the possibility of Disney purchasing Snapchat, Twitter, and/or Netflix, though analysts agree: none of these are likely. Twitter’s struggle to remain profitable and stabilize its stock price creates nonstop purchase rumors, but it seems that Disney doesn’t stand to benefit much from a Twitter acquisition [11]. Snapchat has proved to be a unique outlet for Disney’s content, but doesn’t seem to be a likely purchase for the social media company [12]. Though the investment in BAMTech signifies Disney’s interest in streaming, Netflix doesn’t appear to be a perfect partner, either. Netflix’s dominance in the streaming market has waned as challengers such as Amazon and Apple have stolen subscribers [13].

Box Office

Star Wars Moana banner [17]

After the November 23 release of Moana, Disney is nearing $2.5B in total domestic box office gross for 2016 [14]. With the top four grossing films of 2016 thus far (Finding Dory, Captain America: Civil War, The Jungle Book, and Zootopia), the company topped $6B in worldwide box office gross for the first time in its history [15]. This new record will only increase as Moana and Doctor Strange continue to screen and Disney’s final 2016 film releases: the newest film, Rogue One. Beyond the box office, movies like Star Wars, Finding Dory, and Moana provide massive profits in merchandising, both in America and abroad. In 2013, Disney merchandise sales brought in over $40B.

Theme Parks

On June 16, Disney’s fourth international theme park opened in Shanghai, with the tagline “authentically Disney, distinctly Chinese” [16]. The company avoided western branding and symbols by changing street names within the park and by filling the concessions with 70% Chinese food. Traditional Disney characters can be seen wearing traditionally Chinese silk costumes and speaking the native language. The Shanghai Disney Resort seeks to take advantage of the massive potential offered by China and the wider Asian market.

Shanghai Disney Resort [18]

Conclusion

Despite Disney’s losses in television, its massive successes at the box office in 2016 have made up for it. The control of Star Wars, Marvel, and Pixar promises success in the motion pictures department nearly every year. Further, Disney’s land holdings of theme parks underscore the company’s finances with physical propoerty–while most media conglomerates own intellectual property, Disney holds more tangible assets as well. The company’s investments in technology put it in a good place for the future–its theme parks’ MagicBands have already proven successful. But while the company must hope these investments pay off, it also faces the uncertain future of navigating an evolving marketplace with a new CEO. Iger’s selection of his successor is by far the most important storyline to follow within the massive world of Disney.

Sources

About The Walt Disney Company. Retrieved November 25, 2016. https://thewaltdisneycompany.com/about/
The Data Team. June 16, 2016. The Economist. A New Disney Theme Park Opens in China. Retrieved November 25, 2016. http://www.economist.com/blogs/graphicdetail/2016/06/daily-chart-11
Johnson, Madeleine. June 16, 2016. Zacks. Your Complete Guide to All the Things Owned by Disney. Retrieved November 25, 2016. https://www.zacks.com/stock/news/220682/your-complete-guide-to-all-the-things-owned-by-disney
Carpenter, J. William. October 29, 2015. Investopedia. Top 5 Companies Owned by Disney. Retrieved November 25, 2016. http://www.investopedia.com/articles/markets/102915/top-5-companies-owned-disney.asp
Brevet, Brad. January 7, 2016. Box Office Mojo. ‘Star Wars: The Force Awakens’ Becomes Highest Grossing Domestic Release of All-Time. Retrieved November 25, 2016. http://www.boxofficemojo.com/news/?id=4142&p=.htm
Belloni, Matthew. June 22, 2016. The Hollywood Reporter. In-Depth With Disney CEO Bob Iger on China Growth, ‘Star Wars’ Reshoots and Political Plans: “A Lot of People Have Urged Me to [Run]”. Retrieved November 25, 2016. http://www.hollywoodreporter.com/features/bob-iger-interview-star-wars-905320
Hirasuna, Delphine. August 7, 2009. At Issue Journal. Walt Disney’s Creative Organization Chart. Retrieved November 25, 2016. http://www.atissuejournal.com/2009/08/07/walt-disney%E2%80%99s-creative-organization-chart/
Yahoo! Finance. The Walt Disney Company (DIS). Retrieved November 25, 2016. https://finance.yahoo.com/quote/DIS/financials?p=DIS
Brown, Maury. August 9, 2016. Forbes. Disney Buys $1B Stake In MLB’s BAMTech, To Launch ESPN Streaming Service. Retrieved November 25, 2016. http://www.forbes.com/sites/maurybrown/2016/08/09/disney-co-makes-1-billion-investment-becomes-minority-stakeholder-in-mlbams-bamtech/#1f44b1915972
Markman, Jon. August 23, 2016. Forbes. Disney Streaming Into A Perilous Future. Retrieved November 25, 2016. http://www.forbes.com/sites/jonmarkman/2016/08/23/disney-streaming-into-a-perilous-future/#4f34784210f7
Kafka, Peter. September 26, 2016. Recode. Why Disney won’t buy Twitter. Retrieved November 25, 2016. http://www.recode.net/2016/9/26/13062276/disney-won-t-buy-twitter
Munarriz, Rick. April 9, 2016. The Motley Fool. Disney Isn’t Buying Netflix or Snapchat. Retrieved November 25, 2016. http://www.fool.com/investing/general/2016/04/09/disney-isnt-buying-netflix-or-snapchat.aspx
Cohan, Peter. October 5, 2016. Forbes. Why Walt Disney Should Not Buy Netflix. Retrieved November 25, 2016. http://www.forbes.com/sites/petercohan/2016/10/05/why-walt-disney-should-not-buy-netflix/#710bdc20395d
Box Office Mojo. Studio Market Share. Retrieved November 28, 2016. http://www.boxofficemojo.com/studio/?view2=yearly&view=parent&p=.htm
Tartaglione, Nancy. November 6, 2016. Deadline Hollywood. Disney Crosses $6B At Global Box Office; First Time In Studio’s History. Retrieved November 28, 2016. http://deadline.com/2016/11/disney-crosses-six-billion-dollars-global-box-office-studio-record-doctor-strange-finding-dory-zootopia-captain-america-1201849749/
Gardner, Hannah. June 16, 2016. USA Today. Disney’s new Shanghai park is supersized. Retrieved November 28, 2016. http://www.usatoday.com/story/news/world/2016/06/15/disneys-new-shanghai-park-supersized/85920926/
Disney. Moana. Retrieved November 28, 2016. http://movies.disney.com/moana

DreamWorks Animation

Posted on September 18, 2012 by ijteckli

by Ian Tecklin

DreamWorks Animation SKG

Location

1000 Flower Street, Glendale, California 91201

(818)-695-5000 | http://www.dreamworksanimation.com/

About

DreamWorks Animation SKG is a publicly traded animation studio that produces animated feature films, television series, and live entertainment. The company strives to produce two or three animated feature films a year that offer its audiences original stories and high-quality visual imagery, with the hope of capturing the imaginations of its audiences.

Brief History

DreamWorks SKG was founded in 1994 by Steven Spielberg, Jeffery Katzenberg, and David Geffen. After signing a co-production deal with Pacific Data Images (PDI) in 1995, the studio went on to release its first film, Antz, in 1998. In 2000, DreamWorks SKG launched a new

division, DreamWorks Animation, with the intention of producing two types of animated feature films: stop-motion and CG. In 2004, after a series of highly successful computer-animated films, including Shrek, Shrek 2, and Shark Tale, the company stopped producing stop-motion, hand-drawn films, and instead focused on releasing only CG animated films. Most importantly, it was in late 2004 that the division separated and became a publicly traded company named DreamWorks Animation SKG, Inc. (NASDAQ: DWA), headed by Jeffrey Katzenberg. Subsequently, in 2006, DreamWorks Animation entered into a distribution agreement with Paramount Pictures, which will last until the end of 2012. Since its inception in 2004, DreamWorks Animation has released 25 animated feature films, all of which have an average gross of over $400 million, and a combined gross of over $10 billion worldwide. [1]

Key Executives

Jeffrey Katzenberg, Chief Executive Office and Director

Lew Coleman, President and Chief Financial Officer

Ann Daly, Chief Operating Officer

Anne Globe, Chief Marketing Officer

Heather O’Connor, Chief Accounting Officer

Andrew Chang, General Counsel and Corporate Secretary

Rich Sullivan, Head of Corporate Finance

Daniel Satterthwaite, Head of Human Resources

http://ir.dreamworksanimation.com/management.cfm

Major Competition

Pixar Animation Studios – http://www.pixar.com/

Blue Sky Studios – http://blueskystudios.com/

Walt Disney Animation Studios – http://www.disneyanimation.com/

Sony Pictures Animation – http://www.sonypicturesanimation.com/

Finances

For all of 2011, DreamWorks Animation SKG had a revenue of $706 million, net income of $110 million, total assets of $1.779 billion, and total equity of $1.357 billion [2]. More recently, DreamWorks Animation released its third quarter 2012 financial results on November 1, 2012. For the quarter, the company reported total revenue of $186.3 million and net income of $24.4 million, which is up from 2011’s third quarter results, which listed a revenue of $160.8 million and net income of $19.7 million [3]. The improvement in this quarter’s results are primarily due to the box office success of Madagascar 3: Europe’s Most Wanted, which grossed over $740 million at the worldwide box office.

July:

July 23, 2012

DreamWorks Animation SKG announces its acquisition of Classic Media for $155 million cash. Classic Media is an animation studio and production company that has the rights to classic properties including Casper the Friendly Ghost, Rocky & Bullwinkle, Lassie, The Lone Ranger, George of the Jungle, and Where’s Waldo. With this acquisition, DreamWorks Animation can now implement Classic Media’s large and diverse library of characters across its array of businesses, including feature films, television series, live entertainment, consumer products, and theme parks. Classic Media will become a division of DreamWorks Animation SKG, and will be renamed DreamWorks Classics. For the full article, click here [4].

August:

August 7, 2012

DreamWorks Animation SKG announces its plans to develop an entertainment district in Shanghai, China. The district will be called The Dream Center, and will cost an estimated $3.1 billion to construct. Within the district will be theaters, restaurants, shops, performance halls, and an entertainment area. The Dream Center is beneficial for both China and the United States. For China, it strengthens the country’s media industries and can have a positive effect on the economy. For the United States, it can increase revenue for American films and products, and target a growing Chinese population. In addition to promoting DreamWorks Animation properties, The Dream Center will also be home to Oriental DreamWorks, a $350 million animation studio, where only animated films for China will be produced. The Dream Center is expected to be completed in 2016. For the full article, click here [5].

August 20, 2012

DreamWorks Animation leaves Paramount Pictures and has hired 20th Century Fox as its distributor. Since its inception in 2004, DreamWorks Animation has been in a distribution agreement with Paramount, until the agreement’s scheduled termination in 2012. Since DreamWorks Animation does not have the resources to market and release its films on a global basis, it needs the help of a large studio. According to the report, Fox will receive an 8 percent fee for handling theatrical, DVD, and international distribution. The decision to enter into a distribution agreement with 20th Century Fox is surprising given the fact that Fox already has a successful animation studio called Blue Sky Studios, which has produced such hits as Rio and the Ice Age franchise. For the full article, click here [6].

September:

September 9, 2012

DreamWorks Animation releases its film schedule, which includes a slate of 12 films through 2016. The titles of the films are The Croods, Turbo, Mr. Peabody & Sherman, Me And My Shadow, How to Train Your Dragon 2, Happy Smekday!, The Penguins of Madagascar, Trolls (working title), B.O.O.: Bureau of Otherworldly Operations, Mumbai Musical (working title), Kung Fu Panda 3, and How to Train Your Dragon 3. DreamWorks Animation typically releases two to three films a year, however, with the new schedule, the company will release three to four films a year, an ambitious increase. For the full article, click here [7].

October:

October 17, 2012

DreamWorks Animation SKG CEO, Co-Founder and Director Jeffrey Katzenberg visits the S.I. Newhouse School of Public Communications at Syracuse University. Mr. Katzenberg came to Newhouse as part of the USA TODAY CEO Forum, moderated by USA TODAY’s Mike Snider. During the event, Mr. Katzenberg discussed stories from throughout his career, talked about the current state of the entertainment industry and where it is heading, and offered advice on careers in the entertainment industry. For a full recap of the event, click here [8].

November:

November 1, 2012

DreamWorks Animation SKG releases its Q3 financial results. According to the report, total revenue was $186.3 million and net income was $24.4 million (up from 2011 Q3 revenue of $160.8 million and net income of $19.7 million). In the quarter, regarding feature films, Madagascar 3: Europe’s Most Wanted contributed approximately $47.1 million of revenue, Puss In Boots contributed $44.8 million of revenue, Kung Fu Panda 2 contributed $9.0 million, and Megamind contributed $0.7 million. For a summary of the third quarter financial report, click here [9].

November 21, 2012

DreamWorks Animation releases Rise of the Guardians, a film about notable childhood figures (Santa Claus, Jack Frost, Easter Bunny, Tooth Fairy, and Sandman), who team up to fight and stop the Boogey Man from hurting children. The film debut to a disappointing $32.3 million over the five-day Thanksgiving weekend. In fact, the opening is the lowest for a DreamWorks Animation film since 2003’s Sinbad: Legend of the Seven Seas. The film cost an estimated $145 million to produce. Though Rise of the Guardians will not be a success at the box office, DreamWorks Animation’s next three films are all original stories, and given the company’s track record with original tales, the films should do well. For the full box office report, click here [10].

Upcoming Events

The Croods – March 22, 2013. To view the trailer, click here.

Turbo – July 19, 2013. To view the poster, click here.

Mr. Peabody & Sherman – November 1, 2013. To view the first-look image, click here.

Sources

[1] Box Office Mojo http://www.boxofficemojo.com/franchises/chart/?id=dwanimation.htm

[2] DreamWorks Animation SKG, Inc. http://files.shareholder.com/downloads/DWA/2039658139x0x563198/3224AB5D-241A-400B-BF77-702A544925C1/DWA_2011_Annual_Report.pdf