General presentation of the Walt Disney Group:
The Walt Disney Group is an American media and leisure group that exercises different types of activities that can be divided into different categories depending on the turnover generated in this way:
- The operation of television and radio channels generates 41.2% of the group’s turnover with ABC Television, ESPN Radio Network, Radio Disney, Toon Disney Channel, Jetix Channels and SOAPnet. This also includes the production and distribution activities relating to TV programmes, video games production and the operation of related websites.
- The operation of leisure sites generates 34.1% of the group’s turnover with no less than 11 theme parks and 22 hotels situated around the world. The Disney Group also exercises activities in the sale of cruises, travel agency activities, and creation and development of parks and other real estate assets.
- The operation of animation studios and artistic production represents 16.8% of the turnover.
- The sale of derived products generates 7.9% of the group’s turnover with games, games software, films and other items.
The Walt Disney Group currently exercises its activities throughout the world and employs over 200,000 people.
Know the competition to Walt Disney shares:
The Walt Disney Group is currently number one worldwide in the leisure sector. Although its activities fall into a very specific activity sector it still has significant competitors in the form of a few major groups and companies, some specialised in the same sector, others less so. Here you can learn more about the major competitors to the Walt Disney Group.
- Time Warner: The major competitor to Walt Disney at present appears to be Time Warner although its turnover is around half that of Walt Disney. 21st Century Fox, another media company, is also a serious competitor which operates a wide range of activities.
- Vivendi: Finally, the French Group Vivendi is also on the list of significant competitors of Walt Disney with a turnover that is five times less that of the latter but which is fully developing its activities in the leisure industry.
The strategic alliances implemented by the Walt Disney Group:
To conclude this article here are the major current partners of the Walt Disney Company worldwide:
- TF1: In 2014 the French group TF1 entered into partnership with Walt Disney France for the rights to upcoming Marvel studio productions and The Star Wars saga films.
- Nintendo: In 2015 the Nintendo video games company signed a significant partnership agreement with the Walt Disney Group aimed at developing video games and films around the emblematic characters of the two companies including Mario and Mickey.
- Netflix: In 2017 the Netflix Group obtained a strategic alliance with Walt Disney by offering its subscribers access to the group’s productions including the great Disney films as well as productions by Pixel, Marvel and Lucasfilm.
Here is some basic information about the recent economic and financial history of the Walt Disney Group that will allow you to better understand the historical stock charts and thus better anticipate the future market reactions of this stock.
- In 2010, Disney is acquiring Marvel Entertainment and expanding its partnership with POW! Entertainment. The group reduces its stake in UTV Motion Pictures and announces the closure of Miramax Film.
- Also in 2010, Playdom, a community gaming studio, was acquired for $563.2 million. Miramax Films is finally sold for $660 million to Filmyard Holdings.
- In 2011, the Disney Group buys the social networking site Togetherville for children under 10 years old. It then divides its contract with advertising agencies into two entities, Carat for theme parks and Publicis for film, television and video games. The same year, Disney announced its intention to buy the remaining 49.6% of the capital it did not yet own in the UTV group for $454.62 million.
- Also in 2011, the Disney group announces that it has issued 1.6 billion bonds in two lots, one lot of 1 billion 3-year bonds and the rest over 30 years. Dinsey's racaht of UTV is finally validated by the Indian government.
- In 2015, Disney announces the combination of its Disney Consumer Porducts and Disney Interactive divisions for the beginning of 2016. Christine McCarthy becomes Chief Financial Officer. Also in 2015, the Disney group invests in a start-up in the Sillicone Valley, Jaunt, which specializes in virtual reality. Following the takeover of Lucasfilm by Disney, a British costume rental company is forced to return 6 internet domains including starwars.uk to Disney by Nominet. A fall in Disney's share price triggers the group's decision to aggressively buy back its shares. Finally, in 2015, Disney is preparing the launch of an on-demand digital content rental service in the United Kingdom under the name DisneyLife with films, television series, music and books.
- More recently, in 2016, Disney appointed Mark Parker, Nike's CEO, to the Walt Disney Company's Management Board. Thomas Stagg is considered the favorite to succeed Robert Iger as CEO but finally announces his early departure.
The advantages and strong points of Walt Disney shares as stock market assets:
One of the greatest strengths of the Walt Disney Group is of course its wide covering of cable network channels. In fact, the company is at the head of a cable network that covers a wide zone and notably operates the following channels: ABC, Disney Channel Worldwide and ESPN as well as a sport and leisure company that is broadcast in no less than 60 different countries worldwide. In total, there are more than a hundred different television channels broadcast by Walt Disney in 34 different languages and 163 countries worldwide. This represents around 123 million subscribers on an international level. Due to this huge network and its influence the Walt Disney Group possesses a real advantage against its competition. The margin generated by this large number of subscribers is also comfortable and enables the group to generate high revenue each year. Of course, this revenue from subscribers is in addition to that generated by the sale of advertising space.
The Walt Disney Group can also benefit from a significant control of strong brands that enables it to take advantageous positions on the market. It is in fact at the head of some of the best media brands on the market such as Marvel, Pixar, ESPN, Touchstone and Lucasfilm. All these brands have the particularity of being renowned for their high quality and popularity.
Finally, and from a purely financial point of view, we should underline the advantages offered by the profits and margins achieved by the Walt Disney Company which have been experiencing full growth for a number of years. This is highly reassuring to investors and shareholders of this asset.
The disadvantages and weak points of Walt Disney shares as stock market assets:
Here we would highlight the strong dependence of Walt Disney from a geographical point of view on one particular area and region. Despite the efforts and attempts made by the group to develop its activities throughout the world the market where it continues to achieve the majority of its profit remains that of North America. This geographical zone mainly concerns the United States and, to a lesser extent Canada, which alone generates nearly 77% of the revenue of the company. Of course, this strong geographical dependence incurs a certain exposure to the economical risks of this zone and diverse changes in regulations that could negatively influence the future profitability of the Walt Disney Company.
Finally, another significant weak point we should not forget of the Walt Disney Group is the unfunded pension plans. Although the major figures are accounted for as annual net profits it is also important to take into account the passive net value with which they are associated and which currently accounts for nearly three billion dollars in unpaid pensions. The repayment of this debt could severely lower the profitability level of this group.