Disney Sees $1 Billion in Revenue to End Content Licensing Deals – Deadline
Disney beat streaming subs, but its financials missed the mark in the second quarter of 2022 due to a high of $1.023 billion. its direct-to-consumer services.
Revenue of $19.2 billion was up 23% from a year ago, but was below Wall Street’s forecast — by about $1 billion. Profit fell 48% to $470 million. Earnings per share of 26 cents were down from 50 cents. Excluding items, including a tax impact, EPS was $1.08, versus 79 cents.
Disney, in its earnings reports on Wednesday, did not specify which shows it pulled, but Chief Financial Officer Christine McCarthy said in a call with Wall Street after earnings that those licensing deals were booked. as income at the time they were entered into. Numbers.
Disney — and other streamers — pulled content. The six Marvel original series for Netflix, Daredevil, Jessica Jones, Luke Cage, Iron Fist, The Punisher and The Defenders limited series as well as Marvel’s Agents of SHIELDwhich streamed exclusively on Netflix, will move to Disney+ starting March 16. They will be available in all other Disney+ markets later this year.
The Bob Chapek-led company divides its business into two giant segments: media/entertainment and parks. Disney Media and Entertainment Distribution (DMED) includes linear networks (domestic and international), streaming, and content sales/licensing that take place in the studios. Total DMED sales 9% to $13.6 billion. Operating profit fell 32% to $1.9 billion.
Linear network revenues increased 5% to $7 billion; DTC jumped 23% to $4.9 billion; Content/licensing decreased 3% to $1.9 billion. Linear network revenue was flat at $2.8 billion. DTC losses widened to $887 million from $290 million. Content revenue fell 95% to $16 million.
Domestically, broadcasting saw its profits rise thanks to increased affiliate and advertising revenue at ABC, the latter fueled by the schedule of the now-famous Oscars (which aired later, in the third fiscal quarter). of last year) and higher prices, partially compensated by a decrease in the audience. Cable profits have plummeted due to rising programming and production costs for NFL college football playoffs, NBA and college basketball.
In parks, sales more than doubled to nearly $6.7 billion from $3.1 billion, and the division grew to operating profit of $1.8 billion from a loss of $400 million last year. The recovery continues here despite the tremors in Asia, with Shanghai still closed. National parks are a financial bright spot for the company thanks to higher prices and new cost-effective technology for booking, ordering and arranging attendance, as well as pent-up demand.
The parks sector is one thing that sets Disney apart from streaming rivals like Netflix, though the strength hasn’t stopped DIS stock from being swept away in a downdraft that drags the sector lower. Disney is the only showbiz stock included in the DJIA 30 and has been about the worst performer in the Dow so far this year. Shares closed today down 2.2% at $105, around their 52-week lows and a far cry from a high near $190 last fall. As of 5:30 a.m. ET, they were down another 2.6% in late trading.
A pivot in Wall Street sentiment on streaming coincided with turmoil in the broader stock market, rocked by stubborn inflation, at 20-year highs, rising interest rates, supply chain disruptions. Supply and the Russian-Ukrainian War.
The quarterly figures hit as Disney and Chapek have become a flashpoint in the current culture wars in the United States. Florida GOP lawmakers and Governor Ron DeSantis, who passed legislation to wrest Disney’s right to a special self-governing development district at Walt Disney World. The Reedy Creek Development District has primarily allowed the company to avoid red tape for construction or projects in the park. So while the financial impact on Disney isn’t yet clear, it apparently wasn’t significant enough for any of the analysts on the call to ask. in regards to. Reedy Creek would not disband for a year and a half.
Yesterday, Senator Josh Hawley caused a stir by introducing a bill that targets Disney copyright protection. The legislation would only apply to entertainment and theme park companies with a market cap of more than $150 billion. Demagoguery – includes a provision to delay implementation for up to 10 years.