Disney turns to Taylor Swift, 'Fortnite' and the dividend to fight back against its rebellious shareholder

Disney boss Bob Iger is under pressure from activist fund Trian Fund Management, which has nominated its founder Nelson Peltz and former Disney CFO Jay Rasulo as board members. Trian, which has invested around $3 billion in Disney, He complains that the company is not well managed and intends to fight at the next meeting, called for April 3. Iger, for his part, is trying to curry favor with shareholders. This Wednesday, in the presentation of results, he counterattacked with a battery of announcements that have boosted the price: the exclusive broadcast of the Taylor Swift film; the taking of a $1.5 billion stake in Epic Games, which developed the Fortnite video game, a 50% increase in the dividend, up to 45 cents per share, and a $3 billion share buyback this year.

The entertainment giant based in Burbank (California) achieved revenues of $23,549 million between October and December, the first quarter of its fiscal year, almost identical to those of the same period of the previous year. However, while the turnover of theme parks and other experiences grows strongly (7%, up to 9,132 million, due to the pull of its international parks) and the sports division is defended (it grows 4%, up to 4,835 million) , entertainment fell 7%, to 9,981 million. This drop is largely due to the relatively poor reception of The Marvels and wish in the current quarter, compared to Black Panther: Wakanda Forever, Avatar: The Shape of Water and a strange world in the same quarter of the previous year.

The cost cutting has allowed Disney, with practically the same income, to improve profits by 49%, to 1,911 million dollars, exceeding analysts' forecasts. In addition, the company has indicated that, thanks to cost reductions, earnings per share will increase by at least 20%, to about $4.60 per share. That allows Disney to increase its dividend by 50%, to 45 cents per share, and launch a $3 billion share buyback program this year.

Stock market rise

Disney's share price has reacted upward and rose around 7% outside of normal trading hours. In the last 12 months, the price has fallen 11%. Apart from the financial figures and the increase in shareholder remuneration, Disney has filled the results presentation day with a battery of announcements.

The appetizer came on Tuesday, when ESPN, a subsidiary of Disney, Fox and Warner Bros. Discovery announced an agreement to form a new joint company that offers a sports service through its platform. streaming. The platform will bring together the sports channels of the different companies, certain direct-to-consumer (DTC) sports services and sports rights, including content from the main professional sports leagues and university sports.

But that was not all. The company has jumped on the bandwagon of the star of the moment and has announced that Disney+ will premiere exclusively on March 15 Taylor Swift | The Eras Tour (Taylor's Version), which is the concert film in its entirety for the first time. “It will include the concert in its entirety, including the song Cardigan and four additional acoustic songs that were not in the theatrical or digital version of the film,” Iger himself announced. “We know the public is going to love it,” he added.

Subscribers to the Disney+ streaming service fell to 149.6 million in the quarter, below analyst forecasts of 151.2 million, while global losses in the streaming business streaming, including Hulu and ESPN+, fell to $216 million from $1.05 billion a year ago. With the claim of Taylor Swift among others, the company expects to add between 5.5 and 6 million Disney+ subscribers this quarter and continues to predict that its operation of streaming will reach profitability in the fourth quarter of the current fiscal year.

Along with this, Disney also has announced that it is going to acquire a “small stake” of $1.5 billion in Epic Games as part of a collaboration with the company that created the popular title Fornite “in a new universe of games and entertainment that will expand the reach of Disney's most beloved stories and experiences.”

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