Disney is a juggernaut of 20th-century entertainment.
It has billions of dollars tied up in live professional sports and cable TV through its ESPN operations as its audience cuts their cords. It has billions of dollars invested in theme parks, many with attractions that have gone from futuristic to retro. And it has billions of dollars tied to the box office while moviegoers increasingly are movie streamers.
The company reports its latest quarterly financial results on Tuesday in the week ahead. It was a quarter that saw Disney open two new attractions at its theme parks in the U.S. It continues leveraging its “Star Wars” acquisition a few years ago by building franchise-themed “lands.” It is expanding its park in Hong Kong and just celebrated the first anniversary of its park in Shanghai.
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At the theater, Disney’s Buena Vista studio is behind two of the year’s biggest box office moneymakers — “Beauty and the Beast” and “Guardians of the Galaxy Vol. 2.” Most of those ticket sales happened in the past quarter. They may be bright spots in an otherwise challenging summer environment. Total box office receipts are down 2 percent compared to a year ago, according to data from Box Office Mojo.
Disney’s media networks (ABC, ESPN, Disney Channel, etc.) represent the bulk of its profits, but theme parks and movies are where the growth has been coming from. Those two segments saw profits jump 20 and 21 percent respectively compared to a year ago in the quarter ending in April. That’s why investors will want to pay attention to these businesses.
The traditional television business is where the weakness has been. ESPN is saddled with high-dollar rights contracts for sports, like the NFL’s “Monday Night Football.” Its reliance on getting about $9 per month from cable TV subscribers continues to be threatened by streaming services and à la carte cable TV packages.
Since the days of “Steamboat Willy,” the first animated film with music and sound effects synced up to the images, Disney has been a trailblazer in entertainment. That history hasn’t made it immune from the future.
Financial journalist Tom Hudson hosts “The Sunshine Economy” on WLRN-FM in Miami. Follow him on Twitter @HudsonsView.