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Brought to fans, investors, entrepreneurs, executives, teachers, professors, and students by columnist, economist, novelist, reviewer, podcaster, business reporter and speaker Ray Keating

Wednesday, April 24, 2019

6 Economics Lessons for Abigail Disney

by Ray Keating
Commentary
DisneyBizJournal.com
April 24, 2019

Abigail Disney, a filmmaker and the grandniece of Walt Disney, is very upset about executive pay at the Walt Disney Company. She made this clear in a Washington Post op-ed. Unfortunately, she also made it clear that she understands nothing about economics and how earnings are determined. 

Ms. Disney complained about “the naked indecency of chief executive Robert Iger’s pay.” Golly. She then went on to compare executive pay to the average worker’s, railed against tax cuts, and attacked the Disney company for opposing a minimum wage hike in the city of Anaheim. I hate to say it: This reads like a typical left-wing, Hollywood diatribe devoid of any economic sense, and the only reason that Ms. Disney is getting attention is because of her last name.


Now, let’s try to help Ms. Disney, and others, understand some basic economics when it comes to compensation. I do a regular podcast titled “Free Enterprise in Three Minutes,” and have dealt with the economics of earnings and wages in several episodes.

I’m currently doing a series on “What People Earn.” So, there’s three minutes (give or take) for each of the following:

Episode 31: What People Earn, Part I: Productivity explains that, ultimately, earnings, or incomes, are determined by productivity, that is, output per worker.

Episode 32: What People Earn, Part II: Boosting Productivity notes, “Higher earnings for workers are not about government mandating a minimum wage or a living wage. Instead, higher earnings are about increasing output, value or productivity in a competitive market.”

Episode 33: What People Earn, Part III: Why Does Mike Trout Earn More than Teachers? tackles the issue of someone like Angels outfielder Mike Trout earning more than your average school teacher – again, based on economics rather than how someone might feel.

And the latest episode deals directly with Ms. Disney’s complaint. It is titled Episode 34: What People Earn, Part IV: Why CEOs Make Far More Than Their Employees, and I explain the basics on why CEOs of businesses make so much more than those on the assembly line, covering the sales floor, or driving the trucks.

There are other episodes that Ms. Disney could benefit from in terms of understanding the actual economics at work, such as Episode 21: The Ills of Price Controls, which explains, in part, why a minimum wage hurts, rather than helps, young, inexperienced, low-skill workers, and Episode 15: Marx Was Wrong – Owners and Labor Work Together, which lays out how the real relationship between business owners and workers functions, as opposed to the idea that one is pitted against the other.

So, there you have it. Six quick lessons for Ms. Disney and others on the economics of earnings. That’s a total of about 18 minutes in listening time. Now, how many people who line up with Ms. Disney on such matters will carve out this little bit of time to gain a better grasp on economics and compensation? I’m guessing not many – and that is unfortunate.

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels, with three books - Reagan Country: A Pastor Stephen Grant NovelHeroes and Villains: A Pastor Stephen Grant Short Story and Shifting Sands: A Pastor Stephen Grant Short Story – published in 2018. In addition, the second edition of Warrior Monk: A Pastor Stephen Grant Novel was published in January 2019. He can be contacted at  raykeating@keatingreports.com.



Thursday, April 18, 2019

Major League Baseball in the Mix to Buy Regional Sports Networks from Disney

by Ray Keating
News/Analysis
DisneyBizJournal.com
April 18, 2019

When Disney bought assets from Fox for $71.3 billion, part of the deal was 22 regional sports networks (RSNs). However, the government said Disney couldn’t keep those networks. The forthcoming sale of these RSNs means that Disney is likely to recoup some $13.5 billion of its Fox purchase price, and Major League Baseball (MLB) might be in on picking up 21 of those RSNs.


The U.S. Department of Justice decided that its regulatory approval of the Disney-Fox deal was contingent upon Disney selling the RSNs. The Justice Department apparently worried, given Disney’s ownership of ESPN, about some kind of monopolization of sports broadcasting. Given the dynamism of the video marketplace, this government mandate was firmly rooted in economic ignorance, but that’s a point left to be explored in another piece.

One of the networks – the YES Network – reportedly has been secured by Amazon in collaboration with the Sinclair Broadcast Group. This is the network that carries the Yankees, and the team is part owner. This sales is said to be for $3.5 billion.

There are three bidders that have reached the final round for the remaining 21 RSNs – Ice Cube’s Big3, Sinclair, and Liberty Media Corp., which is teaming up with MLB. Liberty owns the Atlanta Braves and the Formula One Group. 

It’s widely reported that this package will be sold for approximately $10 billion. Interestingly, this is down notably from assorted estimates for a sale price in the $20-$22 billion neighborhood. 

Arguably, the most interesting outcome would see MLB in on the ownership for these 21 RSNs, and what that might mean for expanding opportunities for broadcasting baseball.

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels, with three books - Reagan Country: A Pastor Stephen Grant NovelHeroes and Villains: A Pastor Stephen Grant Short Story and Shifting Sands: A Pastor Stephen Grant Short Story – published in 2018. In addition, the second edition of Warrior Monk: A Pastor Stephen Grant Novel was published in January 2019. He can be contacted at  raykeating@keatingreports.com.

Wednesday, April 17, 2019

Disney Pledges $5 Million to Restoration of Notre Dame Cathedral

by Ray Keating
News
DisneyBizJournal.com
April 17, 2019

The Walt Disney Company announced today that it has pledged a $5 million donation to the restoration of Notre Dame Cathedral in Paris.


Photo courtesy of Wilipedia

Bob Iger, Disney chairman and CEO, said, “Notre-Dame is a beacon of hope and beauty that has defined the heart of Paris and the soul of France for centuries, inspiring awe and reverence for its art and architecture and for its enduring place in human history. The Walt Disney Company stands with our friends and neighbors in the community, offering our heartfelt support as well as a $5 million donation for the restoration of this irreplaceable masterpiece.”

report earlier today from the Associated Press said that nearly $1 billion in donations had been pledged to rebuild the cathedral: “Contributions came from near and far, rich and poor — from Apple and magnates who own L’Oreal, Chanel and Dior, to Catholic parishioners and others from small towns and cities around France and the world.”

Another AP report basically laid out a timeline of events when the fire broke out on April 15, and the battle that raged against the flames and to protect the cathedral and its treasures. As the AP described one scene:
At 7:49 p.m., the 19th-century spire that was the architectural masterpiece of Eugène Emmanuel Viollet-le-Duc and his post-Revolutionary restoration broke apart and fell through the nave. The bronze weathercock tumbled, taking with it three relics sealed inside in 1935.
 It had been 66 minutes since the first flames were spotted.
 The sky above the cathedral flamed orange, and the fire lurched toward Notre Dame’s iconic towers, then slipped inside.
 As darkness fell, 20 firefighters climbed inside the two towers “at great risk to their lives, to attack the fire from the inside and save the building,” said Laurent Nunez, deputy interior minister.
While French President Emmanuel Macron has promised that Notre Dame would be rebuilt in five years, most experts note that it could take much longer – perhaps decades.

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels, with three books - Reagan Country: A Pastor Stephen Grant NovelHeroes and Villains: A Pastor Stephen Grant Short Story and Shifting Sands: A Pastor Stephen Grant Short Story – published in 2018. In addition, the second edition of Warrior Monk: A Pastor Stephen Grant Novel was published in January 2019. He can be contacted at  raykeating@keatingreports.com.

Tuesday, April 16, 2019

Have a Coke in Star Wars: Galaxy’s Edge

by Ray Keating
News/Commentary
DisneyBizJournal.com
April 16, 2019

I’ve been known to declare on occasion: “Sometimes a cold Coca-Cola is the perfect drink.” More than a few people have, no doubt, said the same thing while in Walt Disney World or Disneyland. And looking ahead, they’ll be able to grab a Coke in the new Star Wars: Galaxy’s Edge in both parks. But it’ll be a different, immersive drink.


Really? what’s the big deal? After all, you’ve been able to grab a Coke at Disney theme parks since the beginning. In fact, the relationship between the Walt Disney Company and the Coca-Cola Company dates back to 1942. As noted in February 2011 post at coca-colacompany.com by Ted Ryan:

A few weeks ago, we were treated to an absolutely fantastic presentation by George Aguel, Senior Vice President of The Walt Disney Company.  George walked us through Coke and Disney's shared history beginning with our two handwritten logos recognized around the world.  He then detailed (with audio and video I don't have rights to share) joint promotions for Saludos Amigos, Disney's 1942 feature film about Latin America.  George also shared an unrealized script from the Disney  Archives from 1943.  It would have been a joint creation of the two companies but had to be dropped due to World War II.  From that point the content flew by, we were the sponsor of the first Disney television special, One Hour in Wonderland, which aired on Christmas day, 1950 as well as the later television series, The Mickey Mouse Club.

And of course, Coca-Cola was onboard when Disneyland opened in 1955 at the “Refreshment Corner” on Main Street, U.S.A., when Walt Disney World opened in 1971, and has been there and in the other theme parks ever since. Today, there’s a Coca-Cola Store, for example, at Walt Disney World’s Disney Springs, and there’s the Coca-Cola-sponsored Club Cool at Epcot. In fact, I purchased this very cool hat at Club Cool.


However, what Coca-Cola and Disney are going to do in Galaxy’s Edge is especially cool. As Disney announced on April 13, the company worked with Coke and Lucasfilm to create “specially designed Coca-Cola bottles that are designed to fit authentically within the Star Wars universe.” Check out the video:


Coca-Cola further explained: “The Coca-Cola Company introduces hundreds of new products each year to give people more of the drinks they want in a range of innovative packaging – but none quite like this. Spherical ‘orb’ bottles – which will be exclusive to Star Wars: Galaxy’s Edge – stay true to the Star Wars aesthetic with a rounded look, resealable caps and brand names printed on scuffed, rusted labels in Aurebesh, the written language featured in the film franchise.”

In terms of how the bottles were developed, Coke went on to note:

The creative process kicked off more than three years ago. Coca-Cola Design created dozens of prototypes of all shapes and sizes, collaborating with Walt Disney Imagineering and Lucasfilm Ltd. before eventually landing on the designs that will debut in Star Wars: Galaxy’s Edge (Coca-Cola and Disney are both listed on the patent of the proprietary over-cap).

Matt Cooper, an associate industrial designer at Coke, said the project challenged his team to “take our brands places we’d never taken them before.” Specifically, Batuu. 

“We wanted to create a package that would appear like it was pulled off a ship or left behind and repurposed as a bottle of your favorite Coca-Cola beverage – all with visual cues that keep you in the Star Wars storyline,” Cooper explained.

The idea to use Aurebesh text on the labels came during a tour of the Coke Archives in Atlanta, where Coca-Cola signage with the brand’s iconic Spencerian script logo in various languages caught the attention of a few Walt Disney Imagineers.

Corporate relationships dating back 77 years are rare, to say the least. And it’s interesting to see two long-established companies being creative to engage their customers. Of course, engaging customers in creative ways is what Disney’s entertainment business is all about in the end. But it’s what a beverage company like Coca-Cola must do as well. In fact, Coca-Cola arguably does it better than anyone else, as the 127-year-old company ranks as the world’s most recognizable brand, and a significant part of that is about lifestyle. And now, it’s getting set to be the most recognizable brand in a galaxy far, far away.

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels, with three books - Reagan Country: A Pastor Stephen Grant NovelHeroes and Villains: A Pastor Stephen Grant Short Story and Shifting Sands: A Pastor Stephen Grant Short Story – published in 2018. In addition, the second edition of Warrior Monk: A Pastor Stephen Grant Novel was published in January 2019. He can be contacted at  raykeating@keatingreports.com.

Friday, April 12, 2019

ResortTV1 to Break New Ground in Disney Livestreaming on Saturday, April 13th

by Ray Keating
News
DisneyBizJournal.com
April 12, 2019

On Saturday, April 13, ResortTV1 will be taking livestreaming to a level not previously achieved.

ResortTV1 has announced that it will be going live from all six U.S. Disney theme parks – from Walt Disney World in Florida and Disneyland in California – at the same time. The all-day stream will be switching between all six parks thanks to, according to the ResortTV1 announcement, “stream-hopping technology.” ResortTV1 says this is the first time that all six parks will be in one livestream.


ResortTV1 will be jumping on at least one ride in each park, along with highlighting shows, food, shopping, special guests, chats and, as they put it, “family fun.”

This epic livestream will start at 9:00 AM EST on April 13, and the plan is to go close to closing time in Disneyland. Wow! ResortTV1 is right in calling this livestream “epic.”

Livestreaming from the Disney parks has become wildly popular, and this is a fascinating step being taken by ResortTV1. I certainly wish them success on Saturday. Indeed, a full-day of livestreaming from all six U.S. parks is a dream come true for many Disney aficionados. It should set the bar higher for other livestreams – Disney-related and others – going forward.

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels, with three books - Reagan Country: A Pastor Stephen Grant NovelHeroes and Villains: A Pastor Stephen Grant Short Story and Shifting Sands: A Pastor Stephen Grant Short Story – published in 2018. In addition, the second edition of Warrior Monk: A Pastor Stephen Grant Novel was published in January 2019. He can be contacted at  raykeating@keatingreports.com.

Star Wars: Episode IX Teaser

Check it out!



Thursday, April 11, 2019

Disney Announces Streaming Strategy: Disney+ Priced at $6.99 Per Month

by Ray Keating
News
DisneyBizJournal.com
April 11, 2019

The Walt Disney Company went three-for-three today on content, pricing and timing in its announcement regarding the Disney+ streaming service. The big news was that Disney+ streaming will launch in the U.S. on November 12, 2019, at a price of $6.99 per month.


Bob Iger, Disney chairman and chief executive officer, said, “We are confident that the combination of our unrivaled storytelling, beloved brands, iconic franchises, and cutting-edge technology will make Disney+ a standout in the marketplace, and deliver significant value for consumers and shareholders alike.”

The company announced that Disney+ will launch with “a robust library of theatrical and television content.” That will include “more than 25 original series and 10 original films, documentaries and specials by some of the industry’s most prolific and creative storytellers.”

Among the original content highlighted by Disney were:

  • “The Falcon and The Winter Soldier, a live-action series with Anthony Mackie returning as Falcon and Sebastian Stan reprising his role as Winter Soldier”
  • “WandaVision, a live-action series with Elizabeth Olsen returning as Wanda Maximoff and Paul Bettany reprising his role as The Vision”
  • “Marvel’s What If…?, the first animated series from Marvel Studios and takes inspiration from the comic books of the same name. Each episode will explore a pivotal moment from the Marvel Cinematic Universe and turn it on its head, leading the audience into uncharted territory.”
  • “Into the Unknown: Making Frozen 2, a documentary series showing the hard work and imagination that go into making one of the most highly anticipated Walt Disney Animation Studios features of all time”
  • “Toy Story-based projects Forky Asks a Question, an animated short series, and the short film Lamp Life”
  • Magic of the Animal Kingdom, a documentary series which takes viewers behind the scenes with the highly respected animal-care experts, veterinarians and biologists at Disney’s Animal Kingdom and Epcot’s SeaBase aquarium”
  • The Phineas and Ferb Movie (working title), an animated film featuring many of the original voice cast.”

These come on top of other already-announced new series, such as the live-action Star Wars series The Mandalorian; a new season of Star Wars: The Clone Wars;  a Cassian Andor series starring Diego Luna and Alan Tudyk; Marvel’s Loki  series starring Tom Hiddleston; and Monsters at Work.

What else? Well, consider that Disney also highlighted that Disney+ will offer “all 30 seasons of The Simpsons ... on day one,” and during first year, “audiences will also have access to family-friendly Fox titles like The Sound of MusicThe Princess Bride and Malcolm in the Middle as part of an impressive collection of more than 7,500 television episodes and 500 films including blockbuster hits from 2019 and beyond.”

The combination of a massive and growing content library of high-profile movie and television titles, rolling out new and potentially high-appeal titles, and a price well below the Netflix standard plan ($12.99 per month) point to an impressive opening for the Disney+ service. And it’ll be available just in time for the Thanksgiving and Christmas holidays. Consumer and investor expectations should run high.

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels, with three books - Reagan Country: A Pastor Stephen Grant NovelHeroes and Villains: A Pastor Stephen Grant Short Story and Shifting Sands: A Pastor Stephen Grant Short Story – published in 2018. In addition, the second edition of Warrior Monk: A Pastor Stephen Grant Novel was published in January 2019. He can be contacted at  raykeating@keatingreports.com.


Monday, April 8, 2019

Avengers: Endgame Must Be Great ... In Part to Justify Sitting Through Captain Marvel

by Ray Keating
Commentary
DisneyBizJournal.com
April 8, 2019

To the delight of Disney, superheroes just keep getting bigger at the box office – with the most momentous success coming late this month. Well, Avengers: Endgame (opening on April 26) better be the most successful – in terms of both story and revenue.

Despite a rather flat, flawed story that undermined certain characters and previous movies in the Marvel Cinematic Universe, Captain Marvel (released on March 8) has raked in more than a billion dollars at the box office. (See the DisneyBizJournal review of the movie and early box office numbers.) Interestingly, if you check out RottenTomatoes.com, reviewers leaned positive on Captain Marvel, while audiences were not exactly enthralled. Yet, the movie made an enormous amount of money. Hmmm. 

Meanwhile, Warner Brothers seems to be getting it right at the box office as well. Aquaman, which was released on December 21, 2018, made more than $1.1 billion. (All box-office numbers from BoxOfficeMojo.com unless otherwise noted.) Reviewers were not exactly huge fans of the film, while audience reviews were more positive. 

And Shazam! just opened this past weekend, and it has taken in $159 million. I haven’t seen the movie yet (going on Tuesday night!), but both reviewers and audiences seem to love this film starring Zachary Levi (of NBC Chuck fame). For good measure, the film had a rather modest production budget for a superhero flick at $100 million. That’s a trifecta for Warner Brothers – loved by reviewers and audiences, box-office success, and some relative degree of cost control.

And then there’s the forthcoming movie... No, wait. Let’s call it the forthcoming phenomenon titled Avengers: Endgame

During the first day of online presales early this month, records were shattered on Fandango, for example, and the traffic on the AMC theater chain website caused it to shut down. Some estimates put the opening weekend box-office haul for Endgame at $900 million – which would blow away every record around.

Avatar still holds the all-time global box-office record at $2.79 billion (in nominal dollars). I’m predicting that Avengers: Endgame will surpass that to become the top earner.

After all, this basically completes an amazing 22-film arc created by Marvel, while setting up future movies. My expectations certainly rate very high for a great movie. Obviously, I’m not alone in this, and that’s at least part of the reason why Captain Marvel did so well at the box office. As part of the MCU story, and being the final entry before Endgame, fans had to see Captain Marvel in preparation for the most anticipated movie ... well ... ever.

For Disney, the story with Captain Marvel is the opposite of what happened with Solo: A Star Wars Story. (Check out DisneyBizJournal’s take on Solo.) After the atrocious Star Wars: The Last Jedi, fans basically punished Disney by making Solo the worst box-office performer of any Star Wars film. In contrast, Avengers: Endgame helped make Captain Marvel a massive success.

The pressure is on Disney. What do I mean? Avengers: Endgame needs to be great to not only satisfy this incredible MCU journey moviegoers have been on, but also to justify having to sit through Captain Marvel

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels, with three books - Reagan Country: A Pastor Stephen Grant NovelHeroes and Villains: A Pastor Stephen Grant Short Story and Shifting Sands: A Pastor Stephen Grant Short Story – published in 2018. In addition, the second edition of Warrior Monk: A Pastor Stephen Grant Novel was published in January 2019. He can be contacted at raykeating@keatingreports.com.

Monday, April 1, 2019

Disney, Baseball and the L.A. Angels

by Ray Keating
News/Commentary
DisneyBizJournal.com
April 1, 2019

The home opener this season for the L.A. Angels is on April 4. So, what does this have to do with Disney? Well, here’s a little Disney baseball history.


The relationship between the Walt Disney Company and the Los Angeles Angels goes far beyond the 1994 movie “Angels in the Outfield” – thankfully. 

For example, as noted in the following advertisement (courtesy of Yesterland.com), the greatest family deal ever (!) was offered for April 15, 1967. For a mere $5, you could have enjoyed an Angels-Disneyland doubleheader. You would head to the 3:00 PM game versus the Cleveland Indians, and then enjoy a private party at Disneyland from 8:00 PM to 1:00 AM that night. Sign me up!

But that’s just a fun footnote. Here’s the big question: Who owned the Angels when they won their only World Series in 2002? That’s right. Disney owned the team when the Angels beat the San Francisco Giants in seven games.

The Angels had been owned by Gene Autry – actor, cowboy and friend of Walt Disney – from the time it was an expansion team in 1961. Michael Eisner and Disney acquired a stake in the Angels in 1996, and then purchased the entire team in 1998 from the Autry family. Autry passed away in 1998.

As for the ballpark, Angel Stadium underwent a $118 million renovation for Opening Day 1998, with Disney picking up $78 million of the tab, and the taxpayers covering the rest. And Walt Disney Imagineering was involved in the process. One can see the Disney touch with one particular part of the renovation, as described by Ballparks ofBaseball.com: “In left centerfield is the ‘California spectacular’ where geysers erupt and a stream cascades down a mountainside covered with real trees and artificial rocks.” Very Disney.

However, while Disney magic was evident on the field, with the ultimate success of the 2002 World Series victory, the financial aspects of owning a baseball team didn’t add up for Disney. The team was sold in 2003 to Arturo Moreno, an Arizona businessman who made his money in the outdoor advertising industry.

So, if you happen to catch the Angels at the ballpark this year, keep in mind that the team was officially part of the Disney family for a few years, and that the two businesses have had a long relationship given that they’re Anaheim neighbors.

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels, with three books - Reagan Country: A Pastor Stephen Grant NovelHeroes and Villains: A Pastor Stephen Grant Short Storyand Shifting Sands: A Pastor Stephen Grant Short Story– published in 2018. In addition, the second edition of Warrior Monk: A Pastor Stephen Grant Novelwas published in January 2019. He can be contacted at raykeating@keatingreports.com.