Disney's Combined Strength Across Sectors Remains 'Unparalleled' In Global Media Industry, Says Dan Loeb

Activist investor Dan Loeb noted that the combined strength of Walt Disney Co.’s DIS various sports, general entertainment, and blockbuster franchises remains “unparalleled” in the global media industry.

What Happened: In a letter to investors of his hedge fund Third Point, Loeb said, while Disney’s progress so far has been commendable, more can be done to unlock the company’s full potential of its streaming service.

Loeb urged Disney to provide an “all-you-can eat approach to its direct-to-consumer (DTC) offering” on a single platform under the Disney+ brand, where all theatrical content will be available day-and-date with no additional fee to subscribers.

Loeb praised Disney’s management for leaning into the DTC transition during a very challenging operating environment and lauded the company for suspending its dividend in the first half of fiscal 2020.

See Also: Disney To Launch Animation Facility In Vancouver And Expand In California

Why It Matters: Third Point, which first disclosed its position in Disney last year, had called on the company at that time to suspend its dividend in order to fund its direct-to-consumer streaming service, Disney+.

Following the closure of its theme parks during the COVID-19 pandemic, Disney turned into a stay-at-home winner thanks to the success of Disney+ and its renewed company focus on the direct-to-consumer business.

With 104 million subscribers, Disney+ has turned into one of the largest streaming platforms in the world. Disney+ streaming now generates over $15 billion in annual revenue.

Disney is scheduled to report its financial results for the third quarter on August 12 after the market close.

Price Action: Disney shares closed more than 0.2% higher in Friday’s trading at $177.13.

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