In a note to clients Thursday, RBC Capital Markets analyst Amit Daryanani offered six reasons why Apple may buy Disney:
• Accelerates AAPL’s push into services and content.
• Instantly leapfrogs Netflix, Amazon, and YouTube in content and resets the lead with content narrative.
• AAPL has been unable to replicate its music playbook to video.
• Iconic brand — there are few brands that AAPL could acquire that wouldn’t dilute its iconic presence and customer relationships; DIS would clearly strengthen (and not dilute) the brand value.
• Even using minimal cost synergy, we see the deal being accretive by 15-20 percent.
• AAPL has been increasingly looking at larger deals and noted that services is a focus.
“Daryanani cited Apple CEO Tim Cook’s comments that ‘deal size isn’t a negating factor’ for its future mergers and acquisitions,” Tae Kim reports for CNBC. “In addition, the analyst noted the Republican tax repatriation holiday proposals, where corporations can bring home overseas earnings at a lower tax rate. If this tax reform becomes law, the iPhone maker will have access to its more than $200 billion held abroad for acquisitions, he said.”
Read more in the full article here.
MacDailyNews Take: We can think of worse mega acquisitions Apple could make.
With Disney, Apple would gain not only content, but tremendous leverage in many areas, including “television.” With Disney, Apple would own ESPN, for example. Not to mention ABC, A+E, Marvel, Lucasfilm, The Muppets, Pixar (Steve Jobs’ babies unite!), 30% of Hulu, and much, much more.
Spin off the theme parks or deck them out with Apple technology and use them to showcase Apple products. The sky’s the limit!
As we wrote earlier this month in response to reports Apple was attempting to put together a plan to sell a premium skinny bundle consisting solely of HBO, Showtime and Starz:
Yawn.
You know what would really send a message?
Buying Disney.
All that said, we’ll believe it when we get the press release.
Bonus question: Why, late last year, did Laurene Powell Jobs cut her Disney stake in half?
SEE ALSO:
Apple’s premium TV plans – the hobby doomed to stay that way – April 10, 2017
A premium TV bundle could be Apple’s secret weapon – April 4, 2017
Apple wants to sell HBO, Showtime, and Starz in a single premium bundle – April 3, 2017
Google just succeeded where Apple failed – March 3, 2017
Senior Apple executives vying in confused effort for transformative Hollywood acquisition – March 3, 2017
YouTube to unveil virtual cable bundle for $30 to $40 a month – February 28, 2017
Stalled talks with Ron Howard highlight Apple’s content confusion – February 16, 2017
Apple vowed to revolutionize television; currently prepping an unremarkable 4K Apple TV instead – February 16, 2017
Apple TV: Still not ready for prime time – February 15, 2017
Apple hires Amazon’s Fire TV head to run Apple TV business – February 8, 2017
Laurene Powell Jobs cuts Disney stake in half – February 1, 2017
Why Apple should buy Disney – January 26, 2017
Apple’s new TV app shows just how painfully behind Apple is – December 14, 2016
Are you ready for 4K TV? Apple TV isn’t. – November 28, 2016
Apple has no idea what they’re doing in the TV space, and it’s embarrassing – November 3, 2016
Hulu inks deals with Fox and Disney, adding ESPN, Fox News and more to forthcoming live service – November 1, 2016
Apple’s Eddy Cue: Nope, we don’t want to be Netflix – October 20, 2016
Google signs up CBS for planned web TV service to debut in early 2017; close to deal with 21st Century Fox – October 20, 2016
Apple’s Eddy Cue: Nope, we don’t want to be Netflix – October 20, 2016
Apple’s Eddy Cue alienated cable providers and networks with an assertive negotiating style – report – July 28, 2016
Here comes á la carte programming – without Apple – July 13, 2016
Apple TV 4 is a beta product and, if you bought one, you’re an unpaid beta tester – November 5, 2015
Laurene Powell Jobs’ fortune jumps a cool $1 billion in a day as Disney soars – February 6, 2015
Disney completes Pixar acquisition; Steve Jobs now Disney’s single largest shareholder – May 5, 2006
deal size isn’t a negating factor but courage and conviction in the C-suite remain the bottlenecks for Apple realizing the potential of its absurdly dilutive investment hoard
By default, I reject any article that contains the phrase ‘analyst predicts’, or the speculative wording,’may’, ‘might’, ‘could’ or similar. It basically means, ‘We made some sh*t up, come click on us.’. No, I don’t think I will, thanks.
I agree with the MDN take. If Apple were to shake up the industry, they could do worse than buying Disney which would be the single most logical fit if they were to go down that road. There are a lot of potential positives here that aren’t present in most of the other “analyst recommendation” drivel we typically are subject to.
I probably should have added at the end…this still probably won’t happen. They could have done it years ago and didn’t…so why now?
So they can have access to more bad movies if they ever get the Apple TV thing going?
The whole idea of the Walt Disney Company owning content and theme parks is seamless integration and no royalty payments. It’s the circle of life, theme parks drive attendance to movies and movies drive attendance to theme parks.
Disney is a cash cow, especially when you consider mega successes like Disney World. Take a look at the costs of a few days there that go into Disney’s pockets. The majority of that money is in “services”, including admission fees.
The movie vault is also a huge asset, with top sellers going back to the 1930’s.
I think they should try to work the deal out.
Maybe then Tim Cook can go back to being an ops guy.
Filler
Filler
Filler
No, Apple isn’t so insane as to buy Disney. 😛