Why Disney is so much more than Mickey Mouse now
Skip Bayless is dead wrong about Disney.
The sports television host left ESPN this year amidst an exodus of expensive talent (see above video from May), and he joined Fox Sports 1, the same move former ESPN on-air talents Colin Cowherd and Jason Whitlock have made. In a new interview this week with the LA Times, Bayless discussed the move and suggested that he felt constricted at ESPN, which, if you ever watched his show “First Take,” is hard to believe.
Here’s how Bayless explained the difference between ESPN’s parent company Disney (DIS) and his new company Fox Sports (FOX): “Disney is Mickey and Minnie. Fox is The Simpsons, Family Guy. A different culture.”
It’s quite a punchy sound bite. The LA Times knew it—the paper made it a large, bold pull-quote in the middle of the article. But it is an ill-informed characterization of Disney as a company.
It’s been a long time since Disney was carried by Mickey and Minnie.
Disney’s roster of bankable franchises has ballooned
Disney’s universe now includes the Marvel superhero universe, after it bought Marvel Entertainment in 2009 for $4 billion. Disney has the Star Wars mega-franchise and all the characters and stories therein, after it bought Lucasfilm for $4 billion in 2012. Disney has Pixar, which it bought in 2006 for $7.4 billion and which has never made a Mickey Mouse movie.
Disney is ABC (which it owns), and ESPN (a joint venture with Hearst), and A&E Network (joint venture with Hearst). Disney is Hulu (Disney got a 30% stake in 2009) and MLBAM Tech, in which it wisely grabbed a 33% piece this month for $1 billion (see below video).
Some of Disney’s most successful animated franchises have been “Toy Story” and “Frozen,” which are aimed at kids, but appeal to adults too.
Disney parks & resorts make up just 20% of Disney’s profit
But forget the anecdotal list of franchises: The company’s financials also prove Bayless wrong.
Look at the table below, from Disney’s 2015 10-K form. It shows that media networks (the division that houses ABC, ESPN, A&E, and stakes in Hulu and Vice) accounted for more than half of Disney’s operating income, $7.8 billion of $14.7 billion for 2015.
Parks & resorts, the division that one can fairly equate with Mickey and Minnie, is the second-largest chunk, with $3 billion of Disney’s 2015 operating income, or 20%. But the other three divisions that Disney breaks out—studio entertainment (films), consumer products (merchandise), and interactive (digital)—combine to account for more income than parks & resorts.
The consumer products division certainly includes a lot of Mickey Mouse gear from Disney theme parks, but it also now includes Star Wars merchandise, which is likely the reason the division rose to $4.5 billion in revenue in fiscal 2015, the year “Star Wars: The Force Awakens” came (Disney does not break out its merchandise sales by franchise.) And both media networks and consumer products grew more in 2015 by revenue (10% and 13%) than parks & resorts (7%) did. Consumer products, by both revenue and operating income, grew more in 2015 than any other division did, thanks to Star Wars, not Mickey.