The Walt Disney Company just released their Q3 earnings results for Fiscal Year 2023. At Disney Parks, Experiences and Products, strong performance at reopened international parks was overshadowed by “softness” at Walt Disney World Resort. On Walt Disney World’s weak performance, Disney said:
The decrease at Walt Disney World Resort was primarily due to higher costs and lower volumes. The increase in costs was attributable to inflation and accelerated depreciation related to the planned closure of Star Wars: Galactic Starcruiser. Lower volumes were due to decreases in occupied room nights and attendance.
In addition to “softness” at Walt Disney World, Disney reported a miss in Disney+ subscribers. The expectation was 154.8M subscribers and the reported subscriber count came in at 146.1M. However, most of these subscriber losses were due to Disney+ Hotstar, comprised mostly of very cheap subscriptions. The loss of Hotstar subscribers therefore improved Disney’s average monthly revenue per paid subscriber.
The big news out of this Disney earnings season was twofold:
1) Disney is signing a $2B deal with PENN Entertainment to license the ESPN brand for an “ESPN BET”-branded sportsbook.
2) Disney plans to crack down on password sharing on their streaming services, as Netflix recently began doing.
At the conclusion of the earnings call, Michael Morris from Guggenheim asked Disney CEO Bob Iger about the plausibility of the entire company being sold to Apple. The Hollywood Reporter recently breathed new life into Disney-Apple merger rumors. Iger briefly commented:
Michael, I just am not going to speculate about the potential for Disney to be acquired by any company, whether a technology company or not. Obviously, anyone who want to speculate about these things would have to immediately consider the global regulatory environment. I’ll say no more than that. It’s just — it’s not something that we obsess about.
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