Disney Having a Huge News Week and its Only Wednesday (DIS)
It’s only Wednesday but Disney (NYSE: DIS) is already having a big news week.
First, the company announced Monday that CEO Bob Iger would remain in his current role until his contract expires on June 30, 2016. Iger was supposed to transition into the executive chairman role on April 1, 2015 for 15 months but will remain as CEO.
Under Iger, Disney’s stock has seen a return of 193 percent, far exceeding the S&P’s 54 percent return. Its market cap has increased from $48.4 billion to $113.7 billion.
On a not-so-encouraging note, Disney’s The Lone Ranger might be a big flop for the studio. Critics have given it a collective thumbs-down with Rotten Tomatoes showing that only 17 percent of reviews are positive.
According to Reuters, the film cost $225 million to make but is being outsold by a 2 to 1 margin against what is supposed to be one of the biggest movies of summer, Despicable Me 2 which also hits theatres this week. The Lone Ranger is projected to bring in around $70 million over the first five days with other estimates showing that it’s unlikely to turn a profit for the studio.
One of the key criticisms of the film is that it’s so violent that it won’t be a draw for families.
The good news, if there is any, is that it’s not likely to perform as bad as the epic flop, John Carter.
And finally, the company announced Tuesday that it had entered into an agreement with Viacom (NASDAQ: VIA)’s which gives Disney the rights to Iron Man, Iron Man 2, Thor, and Captain America: The First Avenger.
The deal gives Disney more control over Marvel’s film portfolio, a company it acquired in December of 2009 for $4.2 billion in cash and stock, according to Bloomberg.
This allows the Disney to expand the Marvel franchise into television shows, theme-park attractions and other media.
Terms of the agreement were not disclosed but when it acquired “Marvel’s The Avengers” in 2012 and this year’s “Iron Man 3”, it paid at least $115 million.
The Marvel acquisition has been one of Disney’s most lucrative activities. Iron Man 3 grossed $403 million, second to Marvel’s The Avengers, a film that grossed $623 million.
Disclosure: At the time of this writing, Tim Parker had no position in the above mentioned stocks.
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