ESPN Layoffs, And Potential Star Wars Overload, Is Hurting Disney
Walt Disney Co (NYSE: DIS) opened Friday at $116.50 and recently traded under $114.70, down 3.4 percent on the day. Two very different items might be hurting the stock on this Black Friday.
On Wednesday night, the Hollywood Reporter first broke that ESPN has lost seven million subscribers over the past two years.
Back in August, Disney and many of its cable peers plummeted following unfavorable comments from Disney CEO Bob Iger. The company also readjusted its cable business: Benzinga noted at the time Disney is projecting "mid-single digit" operating income growth from its cable business through 2016 after previously calling for "high single digit" compound annual growth from 2013 through 2016.
ESPN has been the "worldwide leader" in sports coverage for the the better part of four decades. Multiple outlets have reported on how Disney recently ordered ESPN to trim $100 million from its budget next year and $250 million from its budget in 2017.
Clearly, investors are not very happy with ESPN's downfall.
Separately, Black Friday also puts Disney's Star Wars franchise in focus. Toy, department and consumer electronic stores were stocked with merchandise based on the franchise's upcoming Star Wars episode, "The Force Awakens." However, consumers might be a little Star Wars-weary right now.
Noted retail boots-on-the-ground analyst Brian Sozzi was making the rounds Friday morning and had one thing to say in particular: "1 thing very clear being up over 24 hours in stores: Star Wars fatigue has set in. Stuff not selling."
Sozzi also said on his Twitter account that, "Force Friday pulled a lot of the Star Wars sales forward." Force Friday occurred back on September 3 -- it was the first day that Star Wars licensed merchandise went on sale. Forbes said at the time, "Star Wars has created a Force Friday event guide and fans lined up for the midnight toy rollout at Target, Toys R Us and Walmart. Specialty retailers such as Petco scored Star Wars dog toys and Best Buy is promoting the movies, games and other merchandise in addition to taking pre-orders for the Star Wars: Battlefront video game."
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