Tag Archives: Walt Disney Co

Entertainment

Showtime to combine with Paramount+, rebrand with new name

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In this photo illustration, Paramount+ (Paramount Plus) logo is seen on a smartphone against its website in the background.

Pavlo Gonchar | SOPA Images | LightRocket | Getty Images

Paramount Global is further joining its streaming and cable TV business by combining its Showtime TV network and streaming service, Paramount+.

The company said Monday it plans to integrate Showtime’s streaming service fully into Paramount+, its marquee standalone streaming platform and response to the streaming wars.

But the union doesn’t stop there. As part of this integration, the premium cable TV network, known for shows like “Yellowjackets,” “Billions,” and “Dexter,” will be rebranded as Paramount+ with Showtime. The TV channel will also feature content from Paramount+, which has produced original series that spun off from the popular “Yellowstone” and “Criminal Minds” franchises. People can subscribe to Showtime for an extra fee on their pay-TV bundle,

Pricing for the combined streaming platform and other details will be announced in coming weeks, a Paramount spokesperson said Monday. Paramount+ starts at $4.99 a month, and Showtime’s streaming service is $10.99 a month. A bundled offering of the two already exists, beginning at $11.99 a month.

In November, Paramount reported that Paramount+ had 46 million customers. The company reports fourth quarter earnings Feb. 16.

The move comes as media companies work to make their streaming businesses profitable. Competition is at an all-time high following a pandemic-fueled streaming boom, slowing the addition of subscribers. Stock prices have suffered, in part, due to this, and these companies have been experimenting to grow their streaming businesses.

Last year Netflix introduced a cheaper, ad-supported tier. While Disney was early to bundling its streaming options – Disney+, Hulu and ESPN+ – it also debuted an ad-supported option and increased prices last year. Warner Bros. Discovery has been pulling back on content for its HBO Max, as it looks to cut costs, and also plans to debut a combined HBO Max and Discovery streaming app in the spring.

“This new combined offering demonstrates how we can leverage our entire collection of content to drive deeper connections with consumers and greater value for our distribution partners,” Paramount CEO Bob Bakish said in a memo to employees Monday.

During the fall, Paramount restructured its Showtime business. Executive David Nevins, who’d been running the network since 2016, departed and Chris McCarthy and Tom Ryan took over. McCarthy also runs Paramount’s cable-TV networks like MTV and Comedy Central. Ryan runs Paramount’s streaming segment.

While McCarthy and Ryan will remain in place, Bakish acknowledged that the integration “brings uncertainty to the teams” that work on each brand.

–CNBC’s Stephen Desaulniers contributed to this report.

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Business

Disney rips Peltz over board fight, defends Iger’s acquisitions

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Nelson Peltz

David A. Grogan | CNBC

Disney ripped Nelson Peltz and his bid for a board seat Tuesday, as the entertainment giant’s proxy fight with the investor and his activist firm, Trian Fund Management, takes shape.

Disney said in a securities filing Tuesday that its board was where it needed to be to move the company forward. The company also defended CEO Bob Iger’s past acquisitions and said Peltz didn’t have an understanding of Disney’s business, lacked the skills to drive shareholder value and presented no strategy.

“Peltz has no track record in large cap media or tech, no solutions to offer for the evolving media landscape,” Disney said in an investor presentation that was released Tuesday.

Last week, Peltz laid out his case for a proxy fight with Disney on CNBC’s “Squawk on the Street” after Trian filed a preliminary proxy statement looking for a seat on the board.

Peltz raised issues with how shareholder value has eroded recently and Disney’s $71 billion acquisition of Fox in 2019. Trian has also called out what it called poor corporate governance, including failed succession planning and Disney’s lack of engagement with Trian in recent months.

A representative for Trian declined to comment on Tuesday.

Trian said it owns about 9.4 million shares valued at roughly $900 million, which it first accumulated months ago.

Disney preempted and opposed Trian last week when it announced that Mark Parker, the executive chairman of Nike, would become the new chairman of the board.

In Tuesday’s filing, the company defended the numerous acquisitions closed under now-returned CEO Iger, included Marvel and Lucasfilm, saying they enhanced the company’s value for shareholders and were transformative for the company.

Disney’s portfolio has meant it’s often led in the box office with Marvel films and “Star Wars” installments. Those assets have also provided much of the content for its marquee streaming service, Disney+.

As for its Fox acquisition, which Peltz took particular issue with in his presentation last week, Disney said Fox has broadened its intellectual property portfolio further and provided the company with a “deep bench” of talent, including Dana Walden, who’s been considered a contender as the next leader of the company.

When Iger made his shocking return to Disney’s helm in November, replacing his hand-picked successor Bob Chapek after a poor earnings report, he said he would only stay for two years to help look for his next successor. Newly appointed board chairman Parker will lead the process of finding a new CEO, the company said last week.

Disney noted on Tuesday that in addition to succession planning, it is in the midst of a cost-cutting plan and prioritizing streaming profitability.

Disney’s stock was rocky in 2022 as it came out of the early days of the pandemic when movie theaters and theme parks were closed. Slowing streaming subscriber growth also weighed on media stocks in the past year.

Peltz said on CNBC last week he’s been pushing for a board seat to get access to internal numbers and tell other members if and when they’re missing out on opportunities.

Disney on Tuesday contested some of Peltz’s claims about the parties’ conversations thus far.

The company said it had offered Peltz an information sharing agreement, meaning he would have met quarterly with both management and the board, rather than a board observer role as Peltz said. Otherwise, Disney pointed to numerous interactions between the company and Trian.

–CNBC’s David Faber contributed to this report.

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Business

Disney opposes Nelson Peltz push to join board, names Mark Parker chairman

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The Walt Disney Company on Wednesday named Mark Parker, the executive chairman of Nike, its next chairman of the board, while also announcing it opposes activist investor Nelson Peltz’s attempt to join the board.

Disney’s announcements signal a potentially big and messy fight. Nearly two months ago, Peltz’s Trian Fund Management took an approximately $800 million stake in the company and began seeking a board seat. Trian reportedly wants to make operational improvements and reduce costs, and it has expressed its opposition to Bob Iger’s reappointment as Disney’s CEO.

“While senior leadership of The Walt Disney Company and its Board of Directors have engaged with Mr. Peltz numerous times over the last few months, the Board does not endorse the Trian Group nominee, and recommends that shareholders not support its nominee, and instead vote for all the company’s nominees,” Disney said in its release Wednesday.

Peltz is set to reveal more in a filing later Wednesday, CNBC’s David Faber reported.

The new drama at Disney comes after a rough year for the entertainment giant’s stock as soaring streaming costs and a slim slate of theatrical releases ate into profits. Shares of the company closed Wednesday at $96.33. A year ago, Disney was trading at around $160 a share.

Parker will succeed Susan Arnold, whose 15-year term limit will to an end after the company’s next annual meeting of shareholders. The date for the meeting has yet to be announced. Disney’s board will be reduced to 11 members following Arnold’s departure.

Mark Parker

Chris Ratcliffe | Bloomberg | Getty Images

“During his four decades at Nike, Mark has led one of the world’s most recognized consumer brands through various market evolutions and a successful CEO transition, and he is uniquely positioned to chair the Disney Board during this period of transformation,” Arnold said in a statement Wednesday. Parker has been a member of Disney’s board for seven years. Nike didn’t immediately respond to a request for comment.

Iger’s stunning return in November came with a promise of a two-year stint that would spark renewed growth. The CEO also plans to help find his next successor, after the tenure of his previous handpicked replacement, Bob Chapek, fell apart.

Disney previously announced companywide cost-cutting measures in November, including a ban on all but essential work travel and a freeze on new hires for all but a few critical positions. Iger upheld that hiring freeze when he returned to the helm of the company later that month.

“Mr. Iger’s mandate is to use his two-year term and depth of experience in the industry to adapt the business model for the shifting media landscape, rebalancing investment with revenue opportunity while bringing a renewed focus on the creative talent that has made The Walt Disney Company the envy of the industry,” the company said.

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Business

Disney CEO Bob Iger tells employees to return to the office four days a week

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Bob Iger poses with Mickey Mouse attends Mickey’s 90th Spectacular at The Shrine Auditorium on October 6, 2018 in Los Angeles.

Valerie Macon | AFP | Getty Images

Disney CEO Bob Iger told hybrid employees on Monday they must return to corporate offices four days a week starting March 1, according to an email obtained by CNBC.

In the email, Iger stressed the importance of in-person collaboration.

“As I’ve been meeting with teams throughout the company over the past few months, I’ve been reminded of the tremendous value in being together with the people you work with,” Iger wrote. “As you’ve heard me say many times, creativity is the heart and soul of who we are and what we do at Disney. And in a creative business like ours, nothing can replace the ability to connect, observe, and create with peers that comes from being physically together, nor the opportunity to grow professionally by learning from leaders and mentors.”

During the pandemic many companies opted for work-from-home or hybrid work models that kept large gatherings of people, and thus the spread of Covid, to a minimum. As vaccination rates rose and cases and hospitalization rates fell, companies like Disney looked to bring staff back to offices and return to a more normalized pre-pandemic work environment.

Iger’s four-day-per-week stipulation is relatively strict compared with other large companies, which have opted for two or three mandated in-office days for hybrid employees. Apple mandated employees return to work three days a week in September. Twitter owner Elon Musk, who has famously slept as his companies’ facilities as a show of commitment, ordered nearly all Twitter employees to return to the office five days a week in November.

Disney’s new policy comes less than two months after he returned to the helm of the company, promising a two-year stint that would spark renewed growth for the company and develop a successor to take his place.

Iger’s return in November came days after former CEO Bob Chapek said he planned to cut costs at the company, which had been burdened by swelling costs at its streaming service, Disney+. Iger’s return also comes as legacy media companies contend with a rapidly shifting landscape, as ad dollars dry up and consumers increasingly cut off their cable subscriptions in favor of streaming.

Iger plans to reorganize Disney’s Media & Entertainment Distribution division, which oversees the company’s content and distribution. He has maintained a hiring freeze implemented by Chapek while he changes the company’s organizational structure to give budget powers back to those that select creative projects.

Disney shares have fallen about 40% over the past year. The company has a market valuation of about $174 billion.

WATCH: CNBC’s full interview with Mark Asset Management’s Morris Mark on Netflix, Disney

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Entertainment

The Way of Water’ nears $900 million at the global box office

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Avatar: The Way of Water

Courtesy: Disney Co. 

Disney and James Cameron’s “Avatar: The Way of Water” snared an estimated $56 million during its second weekend in theaters, a 58% drop from its debut.

A decline in ticket sales is common for blockbuster titles, with most seeing a 50% to 70% slip. This metric, known as the second-week drop, is often used as an indicator of whether a film will have longevity at the box office or may fizzle quickly.

Films that fall less than 50% are expected to have solid, long runs, while those that top 70% are likely to see ticket sales continue to sharply decline as the movie fades from the public eye.

“The second-weekend drop for ‘Avatar: The Way of Water’ puts it right in the zone of where it needs to be as this performance will set the tone for the ongoing box office journey for the film,” said Paul Dergarabedian, senior media analyst at Comscore.

Box office analysts noted that cold winter weather and storms during the Christmas weekend likely led to slower ticket sales domestically.

Additionally, international ticket sales continue to thrive. The second-week drop for markets outside the U.S. and Canada was 43.9%. It was always expected that “The Way of Water” would generate at least 70% of its box office from international ticket sales and that is exactly where the split stands as of Sunday.

“The Way of Water” has generated $855 million in global ticket sales since its Dec. 16 release — $254 million domestically and $601 million from international markets. At present, it is the fifth-highest-grossing film released in 2022.

Paramount and Skydance’s “Top Gun: Maverick” is the current leader with $1.48 billion worldwide, followed by Universal’s “Jurassic World: Dominion” ($1 billion), Disney and Marvel Studios’ “Doctor Strange in the Multiverse of Madness” ($952 million) and Universal and Illumination’s “Minions: The Rise of Gru” ($939 million).

“The Way of Water’s” haul stands at less than half of what Cameron said the film needs to generate in order to be considered profitable. Despite waning word of mouth, which has focused on stunning visuals felled by a lackluster plot, the “Avatar” sequel has room to run at the box office.

The next major blockbuster — Disney and Marvel’s “Ant-Man and the Wasp: Quantumania” — doesn’t hit theaters until Feb. 17, leaving “The Way of Water” a long stretch at the box office without hefty competition.

“January is absent much direct competition against the film,” said Shawn Robbins, chief analyst at BoxOffice.com. “That’s when the Avatar sequel could make up for any perceived lost ground toward reaching long-term expectations, if it’s going to.”

“We live in a world where the craving for instant gratification leads to early results being used as the final barometer of a film’s success,” he said. “Realistically, sometimes that makes sense, but sometimes it doesn’t. This is one of the latter situations.”

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “Jurassic World: Dominion” and “Minions: The Rise of Gru.”

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Sports

NFL Sunday Ticket goes to YouTube in $2 billion annual deal

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The National Football League announced Thursday its Sunday Ticket subscription package would go to Google’s YouTube TV starting next season, marking the league’s second media rights deal with a streaming service.

YouTube TV will pay roughly $2 billion a year for the rights of the Sunday Ticket package, according to people familiar with the matter.

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At the start of the 2023-24 season, Sunday Ticket will be available two ways: as an add-on package on YouTube TV and as a standalone a-la-carte option on YouTube Primetime Channels, which allows you to subscribe to individual streaming services and channels as well as watch movies. Pricing has yet to be announced.

“For a number of years we have been focused on increased digital distribution of our games and this partnership is yet another example of us looking towards the future and building the next generation of NFL fans,” NFL Commissioner Roger Goodell said in Thursday’s announcement.

DirecTV has had the rights to Sunday Ticket since its inception in 1994, paying $1.5 billion annually for them since the last renewal in 2014. It didn’t place a bid to keep its contract going. Still, the satellite-TV provider had been open to still offering the games for commercial establishments, such as bars and restaurants, similar to its agreement with Amazon for “Thursday Night Football,” according to people familiar with the matter.

The deal with YouTube TV does not include commercial rights, which could boost the value of the package, and the NFL is still sorting that out, according to one of the people.

A U.S.-only product, Sunday Ticket is the only way fans can watch live NFL Sunday afternoon games outside of their local markets on broadcast stations CBS and Fox.

It’s the last NFL package to land a media rights renewal. Last year, Paramount‘s CBS, Fox and Comcast‘s NBC agreed to pay more than $2 billion annually for 11-year packages, while Disney is paying about $2.7 billion per year for Monday Night Football, CNBC previously reported.

Amazon secured the rights to “Thursday Night Football,” making it the first streaming-only platform to air NFL games, paying about $1 billion per year.

The league had been in negotiations for some time to find a new owner for Sunday Ticket. Apple, Amazon, and Disney’s ESPN were among interested bidders for the package at one point or another, CNBC previously reported.

YouTube TV is an internet bundle of broadcast and cable networks that mirrors a traditional linear pay-TV operator. Its base plan costs $64.99 a month. In July, Google announced YouTube TV surpassed 5 million customers, including trial subscriptions.

YouTube Primetime Channels, which will be the a la carte option for Sunday Ticket, is a distribution platform similar to subscribing to networks and streaming services through Amazon’s Prime Channels.

To compare, Apple recently signed a 10-year deal for the rights to air Major League Soccer games. The tech giant recently announced the MLS Season Pass would launch in February, and would be available to fans on the Apple TV app for $14.99 a month per season. For subscribers of its streaming service, Apple TV+, which already pay $4.99 a month, they can sign up for $12.99 a month.

In recent months, YouTube TV emerged as a strong contender for the rights, given it could provide a lot of what the league was hoping to achieve with a new Sunday Ticket partner – a technology platform with a large balance sheet and global reach, and the ability to support bundled legacy TV.

NFL Commissioner Roger Goodell has said the league was pushing for Sunday Ticket to end up on a streaming service. “I think that’s best for consumers at this stage,” Goodell previously told CNBC.

For a time, it seemed Apple was close to attaining the rights. The company has been expanding its sports footprint for its Apple TV+ streaming service. It recently inked a 10-year deal with Major League Soccer that begins in 2023, and last year began airing Friday night Major League Baseball games.

However, discussions broke down due to existing restrictions around the Sunday Ticket rights, and Apple had wanted more flexibility with how to distribute the package, CNBC previously reported.

Amazon had also been considered another top contender, considering it already airs “Thursday Night Football” games and is a streaming-only platform.

While those contests primarily air on Prime, DirecTV distributes the games commercially, in bars, restaurants, hotels and retailers. The two reached a multi-year deal before the season started. DirecTV is interested in delivering Sunday Ticket games in a similar capacity, people familiar with the matter have said.

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Sports

NFL nearing rights deal with Google’s YouTube TV for Sunday Ticket

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New England Patriots tight end Hunter Henry (85) celebrates his touchdown run against the Cleveland Browns during the third quarter at FirstEnergy Stadium, Oct. 16, 2022.

Scott Galvin | USA Today Sports | Reuters

The National Football League is finalizing a deal for the rights to its subscription-only package of games known as Sunday Ticket with Google’s YouTube TV, according to people familiar with the matter.

The league has been in negotiations for months for the rights to the package, long held by DirecTV, with the aim of inking an agreement with a streaming service to broaden the NFL’s reach and partnership.

The deal, however, will not include a stake in NFL Media, which includes the linear cable channels NFL Network and RedZone, which the league has been shopping alongside the Sunday Ticket rights, one of the people said. The sources asked not to be named because discussions are ongoing.

The Wall Street Journal reported on the current status of the talks earlier. An NFL spokesperson declined to comment, and Google didn’t respond to requests for comment.

NFL Commissioner Rodger Goodell previously said while the NFL was packing the minority stake with Sunday Ticket, it could decide to sell each property separately.

Terms of the deal were still being ironed out Tuesday, the people said. DirecTV has been paying $1.5 billion annually since 2015. The NFL has been seeking a buyer for Sunday Ticket willing to pay between $2 billion and $3 billion.

Goodell said earlier that the league aimed to announce a rights deal with Sunday Ticket by the end of the fall. The Sunday Ticket package has been the NFL’s only set of media rights that has yet to be renewed through 2030.

The deal with YouTube TV comes after various media operators, including Amazon, Apple and Disney’s ESPN, considered the rights to the property.

The NFL was in close talks with Apple until recently, the people said. However, existing restrictions around Sunday Ticket had slowed negotiations with Apple in recent months, CNBC previously reported.

The league has been looking to diversify its partnerships with media companies and have a bigger presence in streaming.

WATCH: I believe NFL media rights will be moving to streaming

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Business

Alphabet is not making enough money

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Morgan Stanley: “I want you to hold it. I think it’s terrific at $89.”

SLB: “[Russia] pretty much made a deal between our Western allies and us that allows them to overproduce [oil], which is going to cause Schlumberger to roll down another maybe $5, $6 before we’re interested in buying it.”

Alphabet Class A: “The company has got to cut costs, cut costs, cut costs. … It is not making enough money.”

Sprout Social Inc: “Another enterprise software company. Next. But I promise to go back and look at it again.”

GrowGeneration Corp: “We had that one. We nailed that. We got that right in a buy, we got that right in a sell, and what we did is we never looked back.”

Walt Disney Co: “I think Disney is a triple buy.”

Disclaimer: Cramer’s Charitable Trust owns shares of Alphabet, Disney and Morgan Stanley.

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Business

Disney hiring freeze will stay in place, CEO Bob Iger tells employees

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Chief executive officer and chairman of The Walt Disney Company Bob Iger and Mickey Mouse look on before ringing the opening bell at the New York Stock Exchange, November 27, 2017 in New York City.

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Disney Chief Executive Officer Bob Iger said Monday during his first town hall since returning to the company that he won’t remove its hiring freeze as he reassesses its cost structure.

Iger kicked off the town hall by quoting a song from the musical “Hamilton” that says “There is no more status quo. But the sun comes up and the world still spins,” according to sources who heard the town hall and asked to remain anonymous because the event was private.

It was Iger’s first town hall with staff since Disney abruptly announced last week that he would replace Bob Chapek, who had been in the job for less than three years. Under Chapek, Disney faced criticism for its treatment of employees, its response to Florida’s controversial “Don’t Say Gay” legislation and its decision to take away budgetary power from creative heads.

Earlier this month, Chapek in a memo had announced plans for a hiring freeze, layoffs and cost cuts. Disney shares have fallen nearly 38% this year.

Iger had repeatedly said he wouldn’t return as Disney’s CEO, but on Monday told staffers it was “an easy yes” to return to the job. He said it was the right thing for him to do because of his love for Disney and its employees. Several senior executives recently told board members they’d lost confidence in Chapek’s leadership, CNBC reported last week, prompting the company’s outreach to Iger.

Iger’s Q&A

After about five minutes of introduction, Iger jumped into taking questions, including many from an in-person audience. Disney employees could submit both named and anonymous questions before the event began. Many in attendance began their questions by thanking Iger for returning the company.

Iger acknowledged Disney’s focus must shift toward making its streaming business profitable rather than concentrating on simply adding subscribers, which was the company’s priority when he gave up the CEO job in 2020. He noted Disney won’t be pursuing any major acquisitions in the near future, adding he’s comfortable with Disney’s current set of assets.

In a memo last week, Iger said one of his first actions will be to redo Disney’s organizational structure, which under Chapek centralized decision-making over content and distribution was centralized under Kareem Daniel. Iger has already fired Daniel and said at the town hall a new structure will take time to put in place. He said that will be done in conjunction with other executives including chairman of general entertainment content Dana Walden, Disney Studios head Alan Bergman, ESPN president Jimmy Pitaro, and CFO Christine McCarthy.

Iger said he wouldn’t make any dramatic proclamations about Disney’s work-from-home policies but said he felt creative businesses worked best when employees were together in-person.

Iger joked his wife, Willow Bay, told him he should run Disney again so that he wouldn’t run for U.S. president — something Iger has thought about in the past.

Toward the end of his remarks, Iger noted that he wouldn’t have come back if he didn’t believe Disney’s future is bright.

WATCH: Bob Iger will be able to bring back talent to Disney, says Jim Cramer

−CNBC’s Sarah Whitten contributed to this report.

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Entertainment

The Way of Water’ gets coveted China release

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Set more than a decade after the events of the first film, “Avatar: The Way of Water” tells the story of the Sully family

Disney

Disney’s “Avatar: The Way of Water” has landed a coveted release in China, a promising sign for a film that needs big box office sales to offset its massive budget.

The long awaited sequel to 2009’s “Avatar” is one of only a few Hollywood films that have been granted access to the Chinese market in recent months. Government officials in the region, which began tightening restrictions on Western films even before the pandemic, have been strict about which films can be screened for its entertainment hungry audience.

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The news was first reported by The Wall Street Journal and was posted on 20th Century Studios’ official Weibo account.

Director James Cameron has not placed a price tag on “The Way of Water,” but estimates suggest it is in excess of $250 million. The writer and director told GQ magazine that the sequel budget is so high, that the film will need to become the third or fourth-highest grossing film in history to break even. That means the film will need to crack the $2 billion mark globally.

International ticket sales, in general, were a major factor in “Avatar’s” box office success in 2009, as $2.13 billion of the film’s total $2.91 billion in ticket sales came from outside the domestic market. China contributed around $265 million.

Prior to the pandemic, China was the second-highest grossing theatrical market in the world. Since cinemas reopened in the country, it has been one of the fastest markets to recover and generate box office success.

In 2009, China’s overall box office reached $910 million. A decade later, its box office topped $8 billion.

Perhaps most important about this release is that it will take place on Dec. 16, the same day as its domestic debut. Disney saw success with this strategy when it released “Avengers: Endgame” on the same day in the U.S. and China, leading to the highest global opening weekend in cinematic history.

“Avatar” saw great success in China during its initial release, and subsequent rerelease in early 2021, as audiences flocked to cinemas to see the film in premium formats. These screenings are more expensive than traditional laser or digital showings and can bolster overall ticket sales.

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