Business

No, Apple is Not Buying Disney – Yet

france fined Apple eight million euros
Source: Pixabay

The markets are volatile. Billionaires are buying social media companies for vastly inflated prices. Cryptocurrency exchanges are collapsing. We’re not quite in “these are unprecedented times” territory yet, but it feels like a lot of big moves are happening in the world of business at the same time. Normally, if someone were to suggest that Disney might be interested in selling itself to Apple, the idea would be laughed at. It doesn’t seem so ridiculous in a world where Elon Musk has bought Twitter. That’s probably why the rumour picked up steam after it appeared on the internet last week rather than being instantly dismissed.

Two weeks ago, nobody would have entertained the idea of Disney being ready to sell – but two weeks is a long time in business, politics, and just about everything else at the moment. Two weeks ago, Bob Chapek was still the CEO of Walt Disney Co. The job now belongs, once again, to Bob Iger. He’s serving a two-year term in charge of the company and has been tasked with steadying the ship and stemming losses. The easiest way to stop losing money is to sell up, but very few companies in the world could afford to buy Disney. One is Amazon. The other is Apple, and Apple is the name that was linked. Nevertheless, Iger says that any talk of a deal is “pure speculation.”

Pie in the sky

Iger’s denial – if we can call it a denial – came at his first “town hall” meeting with Disney employees since returning to his role. It didn’t take long for him to acknowledge that both he and the company were in a difficult position – so much so that he’s going to keep Bob Chapek’s controversial hiring freeze in place for the time being – but he was less forthright about the company’s status in relation to a sale. In answering employees’ questions, he said he needed to figure out a new plan for Disney’s cost structure and then made the aforementioned “pure speculation” comment.

At the risk of stating the obvious, calling something “pure speculation” isn’t the same as rejecting the suggestion or saying it’s impossible. Compare and contrast the way Iger spoke about the prospects of a so-called “mega-merger” with Apple against the way he answered a question about Disney making any major acquisitions in the near future. Iger was firm in his position on the latter question, stating that he didn’t expect Disney to make such acquisitions during his two-year term. His position on accepting an offer from Apple was worded with far less certainty. It may indeed be speculation for now, but Iger didn’t say that he wouldn’t consider such an offer or that Disney wouldn’t be open to a takeover offer from anywhere else.

Why Apple would want the deal

Disney is an entertainment colossus, but Disney has also been overspending and losing money – especially on its streaming service. Despite having millions of subscribers, the poor financial performance of Disney Plus has been cited by analysts as chief among the reasons that Chapek was removed from his post. However, the Disney Plus infrastructure already exists. The over-the-top service and customer base are already there, and that would be an attractive proposition to Apple, which has never been able to make a substantial dent in the market with its own TV subscription package. Apple TV is largely devoid of genuinely successful self-made products, and its library pales in comparison to that of Disney, Netflix or Amazon Prime.

Apple might believe that it can make more money out of the Disney back catalogue than Disney does while simultaneously incorporating the technology behind Disney Plus into its own. We know that the streaming model works. It works for Netflix. If we want to talk about taking financial risks, it also works for the casino industry. You need only look at a sister site database to see how many successful online casinos there are in the world, and all of them operate using a similar model. They accumulate casino games from elsewhere and then make them available to players via a single password and portal. Casinos that offer the widest choice of games tend to perform the best. The same is true of streaming service providers. If Apple TV swallowed Disney Plus, it would no longer be a distant fourth in the streaming wars.

Is it likely?

If Disney were to openly say, “we want to sell to somebody,” Apple would likely consider a bid. However, Disney hasn’t said that. Moreover, Apple wouldn’t be the only interested party. We’ve already mentioned Amazon, and it’s not out of the question that Amazon would be able to find the money to buy Disney if it really wanted to. There are also investors and consortiums in the Middle East who would love to get their hands on such a world-famous brand, and they can’t be counted out. It’s possible that any such consortium would have even more money than Apple does and would be able to pay the highest price.

Ultimately, Apple gets linked with a different takeover move every day. Just this past week, the company was linked with a bid for English Premier League football giants Manchester United – and there’s probably no more substance to that rumour than there is to the Apple rumour. We must also refer to the term we used earlier – “mega-merger.” Disney is such a massive, important company with so much history that it’s difficult to imagine it becoming somebody else’s property. It’s plausible that Disney, under the terms of a merger, would be willing to share top billing with a company like Apple. The idea of it being wholly owned by another business would likely be unpalatable to Disney’s senior figures. Disney might be in choppy waters, but things aren’t so bad that it actively needs to sell.

Strange things happen in the world of business, and more strange things will happen in the future. We don’t think Apple buying Disney is likely to be one of them, though – or, at least, not right now.

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About the author

Saman Iqbal

Saman is a law student. She enjoys writing about tech, politics and the world in general. She's an avid reader and writes fictional prose in her free time.




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