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Is Apple Looking to Buy Disney? 250

Posted by CmdrTaco from the can't-imagine-why dept.
louismg writes "This week, Barron's is suggesting that with Steve Jobs on board as the number one shareholder of Disney, following Pixar's acquisition, that Disney is ripe for the plucking for an acquisition by Apple. But look at the numbers. Apple has a $60 billion market cap, and Disney's is over $50 billion. Apple's cash on hand is in the $10 billion range. Wouldn't a Disney acquisition eliminate the possibility of working with NBC's shows on iTunes, or working with Viacom/MTV? It would seem the conflicts and competition would outweigh a purchase of Disney - Pixar or not."
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Is Apple Looking to Buy Disney? More

Is Apple Looking to Buy Disney?

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  • Antitrust (Score:3, Insightful)

    by DoofusOfDeath ( 636671 ) on Sunday February 26, 2006 @09:46AM (#14803828)
    Apple runs iTunes. Disney produces some content. Serious risk of antitrust action.
    • Not with the bush administration. You see Microsoft got away free after being voted a monopoly and look at the recent telco mergers. They don't do the *same* thing, so it will go through no problem.
    • Vertical integration and leveraging would only become monopoly issues if Disney were able to maintain their monopoly on music downloads for a good long time - and there's an argument that CDs and satellite radio are competitors to iTunes for Apple to fall back on.

    • Re:Antitrust (Score:2, Interesting)

      by bloosheep ( 707371 )
      Disney produces content. ABC airs content.

      Why wasn't that deal stopped years ago, then?

    • Re:Antitrust (Score:2, Insightful)

      by bshensky ( 110723 )
      Oh, c'mon. Comcast buys and decimates TechTV into G4? They own OLN. They own E! Entertainment Television. Style. The Golf Channel. Comcast SportsNet.

      Anyone have a problem with Sirius and XM providing "exclusive" content and channels? Didn't think so.

      The Bush Admin allows this to happen. The FCC is happy to take long martini lunches while the content deliverers become content providers.

      Let's face it. Deregulation amounts to a blank check for media delivery and media creators to fsck 'til the cows co
      • What does the "Bush Admin" have to do with this? Companies have every right to make content and to deliver content. They even have the right to be a monopoly. If they abuse it the way Microsoft did in the 90s (coercive license deals that prevented competing products from being pre-installed on OEM computers), that's different.

        Sirius and XM can have exclusive content all they want. That's the free market. This kind of stuff happened on Clinton's watch, too. I guess you forgot the late 90s bubble that g
    • one might think that, and it would probably be a sensible way for antitrust law to work, but it seems not to be the way ours works. co-mingling of content creation and distribution seems to just not be a problem for our legal system.

      • Re:Antitrust (Score:2, Insightful)

        by superflyguy ( 910550 )
        A trust would be when one group has control of an industry. Antitrust laws are supposed to make sure trusts don't abuse their control. They prevent abuse of horizontal integration. Vertical integration does not create a trust, so any law aimed at controling companies that own all the resorces necessary for producing and distributing their products could not correctly be termed "Antitrust". (I am a Nomenclature-Nazi.)

        And it would be hard to limit vertical integration, because where do you draw the line? A

    • Re:Antitrust (Score:3, Insightful)

      by ucblockhead ( 63650 )
      How is that different from Sony, which produces content and has an online store?

      • Re:Antitrust (Score:3, Informative)

        by The Lynxpro ( 657990 )
        "How is that different from Sony, which produces content and has an online store?"

        Because Apple's online store is successful (in fact, the dominant online music store) and Sony's (Sony Connect) is not... :)

        What everyone also seems to forget - especially with the Sony rootkit debacle - is that Sony's music division is only 50% owned by them. They merged Sony Music with BMG's holdings to create SonyBMG, co-owned by both companies.
      • How is that different from Sony, which produces content and has an online store?

        Because pixar sells content we actually like?

        Seriously - Apple has dominace in one market (online content sales) and probably wants to be careful being percieved as attemping to use that to extend into other markets.

        Its just standard (large) business practice (tm) - sony are probably careful about it too...
        • Sony makes some fine entertainment, I thought Spiderman was a pretty good movie and Jeopardy isn't so bad.
          • success as Gwen Stefani. Meaning NOTHING.

            Sure they helped with the funding, but only after the director had convinced them. And even at that, they were lucky that it didn't pull a Jaws II or worse a Jaws 3D.

            I'm sorry but I seriously doubt any of the in-house accountants were glad they spent a dime.

            Why should Apple buy Disney? Can they use them to sell Macs or even iPods. Lets not lose focus of what Apple's business IS.

            What about Pixar? They make great movies but that is it. They'd probably be better off wor
      • While I don't really buy into these rumors with the current information available, if there really is some sort of marriage between Disney and Apple in the works, it might explain the rumors of an iTunes spinoff IPO.

        From what I understand, iTunes itself operates as a break-even loss leader to sell more iPods. Granted, lots of people could make lots of money in an iTunes IPO by selling to people who think that any product they like using must be a good investment, but it doesn't really make business sense

  • "News for Nerds?" (Score:5, Insightful)

    by d.corri ( 952075 ) on Sunday February 26, 2006 @09:50AM (#14803837)
    More like "Speculation for Nerds."

  • But why would they? (Score:5, Insightful)

    by cowscows ( 103644 ) on Sunday February 26, 2006 @09:52AM (#14803843) Journal
    I don't see what Apple really has to gain from buying Disney that Jobs probably can't negotiate out of Disney already. Rights to put Disney content and pixar content on iTMS? I'm willing to bet that was already talked over heavily during the pixar deal. Does any one think that Apple wants to worry about running theme parks? Even if they could manage to afford it, it doesn't seem like Apple has much to gain by buying them.

  • Name the new company (Score:5, Funny)

    by Psykechan ( 255694 ) on Sunday February 26, 2006 @09:54AM (#14803848)
    My vote is for Disnapple!
  • I remember ABC TV's logo getting the Mickey ears on the day Disney acquired them. If Apple takes over Disney, I somehow envision this happening:

    http://www.dartmouth.edu/~wgst60/projects/chicago/ Final%20Project_natalia_files/image010.jpg [dartmouth.edu]

  • Taking the Mickey out of computers (Score:5, Funny)

    by HermanAB ( 661181 ) on Sunday February 26, 2006 @09:59AM (#14803861)
    ...and I always thought that Microsoft make Mickey mouse computer systems...
  • Nice pipe dream but these companies are in WAY TWO DIFFERENT BUSINESSES. One is television, movies, theme parks and merchandising. The other is in hi-tech hardware manufacturing, software development, and digital distribution. Putting them together would create a conglomerate and the market HATES conglomerates. If the market wants to diversify they buy Disney and Apple stock not look for Disney and Apple to get together.

    • One is television, movies, theme parks and merchandising.

      In other words, DIS is already a conglomerate.

    • Very different businesses! agreed.

      So if they did merge, they would have to merge their business goals.. The entertainment thing is something that Apple is big on creating but not really so big on distributing (even w/ iTunes).

      What TV network and movide studio is going to use Apple Hardware if its owned by the competition?

      Besides the channel conflict (hardware and software) w/ other providers (networks, studios, etc.), unless Apple wanted to get into the home robot market via Animatronics I don't see any sy
    • Hi tech hardware will be the means of delivering such content. By securing all points you have a vertical market. At the moment Microsoft is better positioned than Apple in terms of providing the last part of this in the home TV/film domain via Windows Media Centre Edition, but Apple potentially has the music and mobile video markets better under control via various iPods. Now if Apple was able to take something the size of a Mac Mini and adapt it to a media centre task then it might have something special.
      • Your basic premise is that in order to be sucessful you have to control the entire value chain. If we have seen anything from customers is that they punish those firms that try to lock them into one particular market. I don't believe Sony's plan will work, Microsoft will not own content, and Disney and Apple should remain seperate and focus on what they are good at it (brand management and style).
        • Your basic premise is that in order to be sucessful you have to control the entire value chain.

          No, it is that doing so may confer an advantage in some instances, and for Apple/Disney this could be the case, not that it is an absolute requirement. Given the competitiveness of the market even a small advantage could be significant. I'm suggesting this as a possiblity, but you'd want to do serious analysis to know if this truly is the case for Apple/Disney, and I don't have the figures for this. There do see

    • Not to mention a teeny-tad of brand disharmony? Apple is nothing without style and Disney is a symbol of what's weird and tasteless about America. Will the primary colored blue, red, yellow and black ipod shaped like Mickey have the same appeal?
    • I absolutely agree with you. This rumor is about as ridiculous as when people said AOL was going to merge with Time-Warner. It just makes no sense, and will absolutely never happen.
      • What was the impetus for the AOL-TimeWarner merger? If you look back it wasn't harmonizing and creating more content efficiently it was TimeWarner wanting to hike their stock price by linking itself with the Internet. Those conditions will not exist perhaps ever but definitely nowhere anytime soon, so no we will not see something like Disney and Apple getting together because the market and companies figured out it doesn't create shareholder value.
    • I completely agree here. Apple Computers and Disney are so radically different in the kinds of industry that they serve in, that by combining the two companies you will be destroying both of them. Of course, I hardly thought that aquiring ABC Television by Disney was a good idea either, but at least both were in the business of delivering content to people that sit on their behinds and watch a light display in front of them.

      Of course with Apple computer.... I guess they do the same thing, after a sort.

      Sti

  • I like the way this analyst is thinking! (Score:5, Funny)

    by wfberg ( 24378 ) on Sunday February 26, 2006 @10:03AM (#14803869)
    I like the way this analyst is thinking!
    Steve Jobs buys a soda "Apple to claim stake in Pepsico!", Steve Jobs steps into a pharmacy to get some painkillers; "Apple poised to take over Merck!"..

    I'll make some predictions of my own;
    "Larry Ellison to use underwear!"
    "Michael Dell poised to drink overpriced bottled water!"
    "Bill Gates to live in house with hot&cold running water, roof!"
  • Remember the last round of huge company consolidation? The TW/AOL group and msnbc folks kinda wish they could forget. Apple is a GREAT hw/sw company, Steve might -own- hw/sw and the media it runs on, but it'd be best to keep them seperate entities in his checkbook ledger.

  • No chance of Apple buying Disney..... (Score:5, Insightful)

    by postbigbang ( 761081 ) on Sunday February 26, 2006 @10:24AM (#14803925)
    It fits none of Apple's agendas to do so, in fact it would create numerous difficulties for both companies. Instead, it would be better to break up Disney into new pieces that reflect operating income better, just like Icahn was trying to do to Time Warner AOL.

    Barrons had too many martinis before they wrote that one.
    • "It fits none of Apple's agendas to do so, in fact it would create numerous difficulties for both companies. Instead, it would be better to break up Disney into new pieces that reflect operating income better, just like Icahn was trying to do to Time Warner AOL."

      Carl Icahn sucks. He has proposed nothing new concerning future scenarios with Time Warner than has not already been addressed by other shareholders and the board. He did not come up with the idea to spin off the Time Warner Cable division. That
      • Jobs isn't interested in muddying up Apple's revenue streams by merging with Disney. He'd gain the wrath of the RIAA and all of his billion-selling iTunes partners. But is Disney too big? Too bloated? Not producing revenues like they should? Jobs votes more shares than anyone in each organization. Think about that.

        I think that Jobs doesn't rock the boat; Icahn at least had some business sense in trying to break up TW, not that I agree necessarily with his motives (make Carl richer).... his methods would lik
  • Apple video ipod needs content.

    Disney has lots of it.

    Additional benefits are who would be pissed off at this: someone who thinks Tom and Jerry cartoons are a Zionist plot.

    Linky:

    http://littlegreenfootballs.com/weblog/?entry=1940 9_Iranian_Madness_Watch&only [littlegreenfootballs.com]

    • Apple video ipod needs content. Disney has lots of it.

      NBC/Universal, Viacom, CBS (recently divorced from Viacom), Sony (which still owns Sony BMG Records), Fox, and Warner have more. If Apple buys Disney and ABC, it could discourage the rest of the TV and movie industry from offering their works on iTMS.

    • Correct me if I'm wrong, but isn't Tom and Jerry an MGM cartoon, not a Disney cartoon? Though, of course, objecting to that little error among the vast swaths of disinformation on that page is a little ridiculous.
  • I could of sworn i saw a similar one called AOL-Timewarner
  • the only reason to keep that cash is to help you grow your business(not buy an aging and struggling Disney IMO), but Apple seems to keep an insane amount on hand. If you aren't going to do anything with it why not return it to the shareholders via dividends? Apple doesn't even pay dividends, and it's not like paying dividends is totally unknown in this business. Microsoft was dragged into doing it recently, and hell, even Nintendo does it(not a whole lot, but it's something!)
    • "the only reason to keep that cash is to help you grow your business(not buy an aging and struggling Disney IMO), but Apple seems to keep an insane amount on hand. If you aren't going to do anything with it why not return it to the shareholders via dividends? Apple doesn't even pay dividends, and it's not like paying dividends is totally unknown in this business. Microsoft was dragged into doing it recently, and hell, even Nintendo does it(not a whole lot, but it's something!)"

      I'd rather see Apple acquire s
    • Why does Apple keep so much cash on hand?

      Because their performance is so irregular, they go from boom to bust, and sometimes spend years at the "beleagured" end of the business spectrum. The cash lets them comfortably weather the bad times until the next "insanely great" product brings in truckloads of profit. Think safety net.
    • Tech companies keep cash on hand rather than inventory.

      Computers are time-sensitive. You don't make 1000 computers in January and store them until March. Instead you bank the cash in January and make the computers in March after they are already sold. It's all the just-in-time inventory and supply chain stuff taken to a ridiculous degree.

      Then you add the uncertainty and ups and downs of the technology industry and the need to aquire other companies and technologies in order to grow and there are many reason
  • Most of thier "property" is still hanging on a thread thanks to the copyright extensions they sucessfully lobbied for in the past few years.

    All they have been doing recently is remakes and sad 'me-toos' of more popular computer/animation films from other companies. And the sequel much of Slashdot would really want to see (Tron) doesn't seem to be going anywhere (which might be a good thing given thier recent releass they'd probably mess it up anyway).

  • This would move us one step closer to the situation where you buy your entertainment from "the entertainment company" your food from "the food company" and your gas from "the gas company".
    Everything else would come from wal-mart
  • You had a mega content distributor and a mega content creator -- it was supposed to be soooooo synergistic.

    Yeah whatever. Life is what happens while you're busy making other plans.

    Mega mergers always suck. Plain and simple.

    I don't see the point in this. Jobs has become a power player @ Disney through Pixar (not Apple).

    Apple shouldn't be concerned about making computer animated films.

    In fact whoever is suggesting this marriage is an idiot... be the person initiating this on slashdot and/or the person on the

  • Sony buys Apple! (Score:2, Funny)

    by Anonymous Coward
    I vote for Sony buying Apple. Then they could call the company Snapple.
  • There are cheaper ways to be a part of the Mickey Mouse club...
  • Why would Steve Jobs bother buying Disney when he can just run it from his seat on its board of Directors?

  • ever noticed... (Score:3, Funny)

    by mtec ( 572168 ) on Sunday February 26, 2006 @11:15AM (#14804099)
    In most pictures, Mickey seems to be wearing a black mock turtleneck? No wait. That's fur... right?
    Hmmm. Maybe that isn't a turtleneck Jobs wears.

  • Nothing to do with Apple (Score:4, Insightful)

    by billcopc ( 196330 ) <vrillco@yahoo.com> on Sunday February 26, 2006 @11:16AM (#14804101) Homepage
    Let's backpedal a bit: What thy hell would Apple do with Disney ? Companies don't just buy each other out with their spare change unless it presents a strategic or financial advantage. Now I'm no market analyst, but I would tend to think if Apple, who is still an underdog in the computer world, wanted to strengthen its foothold in the world of capitalism, they would be looking at acquiring technology or IP from smaller companies, playing corporate PacMan. They're not be big enough to play dirty like Oracle and Microsoft just yet, so they have to think constructively.

    Buying Disney would show diversity, which can also be interpreted as Apple losing focus and looking for a backup plan or exit strategy from the computer business. A company with cold feet does not fare well on wall street. Disney is not exactly in a position of great power either, it is past its prime. I think at this point Apple should focus on improving performance within its core operations, be it cost-cutting by acquiring certain part suppliers, or perhaps stepping up the marketing machine and pursuing untapped markets to significantly increase the sales volume. Anything that will give the company lasting power so that in a year or two, they will have grown and have the clout to perform more daring acquisitions. Right now a miscalculated buyout could leave Apple unprepared for things to come, sending them back into the dark ages.
    • Just to play devil's advocate, though I'm inclined to agree with what you say, Apple's also positioning itself as something of a digital media company. Disney-branded limited edition iPods, offering downloads of classic disney favorites on iTunes, browbeating EA sports with the newfound ESPN license to start providing OSX versions of its titles... there's lots of stuff they COULD do.

      But they could just as easily buy out Nintendo (or a merger of equals) and do lots of amazing stuff there too. Pokemon-branded
      • The thing is, Apple can probably manage to do a lot of those branding things anyways, without making huge acquisitions and throwing around giant gobs of cash. Even ignoring the fact that Steve Jobs is now on Disney's board, Apple has one of the best brands out there at the moment, I'm sure there are plenty of people out there who would like to ride those coattails. Cross-licensing brands and content would help both sides, it's not like Apple should have to pony up serious cash or make buy outs just to get p
    • ...they would be looking at acquiring technology or IP from smaller companies, playing corporate PacMan.

      I'm sure they'd rather play Corporati Damacy instead. Why just eat ghosts when you could aim to be the next King of the Cosmos? ;)
    • Same reason the SONY a hardware company owns movie studios. This is not too far of a stretch as Jobs is supposed to own like 40% of Disney.
  • Imagine every iPod owner with kids decides to purchase the future KidPod splashproof shock-resistant interactive media player featuring downloaded Disney content (videos, games, educational software), and you begin to see the potential. Every DVD player on the back of a car seat is a potential future KidPod media player. Unlike the delicate and limited DVD players of old (aka today), the sturdy KidPod will be equally at home on the stroller, on the school bus, on the subway, and anywhere your kid goes. Th
  • Job wsa in charge of Pixar and Apple, but he never pushed the merger.

    Apple appears to prefer flexibility as opposed to monolithic growth. For example, the could easily buy a production and distribution facility to make the new intel machines, say Gateway, but they have not done so. Apple has become a design firm, and they seem to want to stick to that core competency. They are doing some simple things, like iTunes and .MaC to support the customers, but one would how buying disney would be good for cust

  • what about snow white? (Score:4, Funny)

    by Agrippa ( 111029 ) on Sunday February 26, 2006 @11:32AM (#14804169)
    If Apple buys Disney, do you think they will digitally revamp Snow White so that the witch gives her a poisoned melon instead of a poisoned apple? Maybe they can bring Lucas on board for that, he's good at making your favorite classic movies better through technology.

    .agrippa.
  • While I don't think it's likely to happen, Apple would be far better off buying Sony than Disney. In addition to getting the media assets that Sony has (which are comparable to Disney's), they'd also be expanding their consumer electronics space.

    Imagine VAIOs running OS X, Trinitrons that were WiFi/computer-enabled, a giant music library instantly available in iTunes, etc.
  • Well, it does seem unlikely.

    Apple's business 1: Computers
    Apple's business 2: Digital content (music, video)

    Buying Disney gets them a lot of other goodies and seems compatible with their second business line. On these lines, they may very well consider buying Comcast, too.

    However... would you really risk your business lines by expanding to some other areas for which you have NO experience? Apple's success with the iPod and the whole online content thing was a calculated risk. They had the tools and the

  • Apple's already got enough problems with Apple Corps. v. Apple Computers.

    You think they'd risk delving even further into violating that settlement? (Disney owns the Buena Vista Music Group. Granted, they don't distribute their own music [wikipedia.org], but it'd still be even closer to an open-and-shut-case against Apple if this happened.
  • But the truth is these sorts of forced marriages only work if it's financially important to one of the companies or if there's true synergy in combining brands and products.

    Or if you're a power-hungry mogul looking to expand your empire. Steve seems not to be like that, but to make your holdings make sense becvause they do something really well. Like the Berkshire Hathaway companies - that include Helzberg Diamonds, GEICO and Dairy Queen - but really have nothing to do with each other - Jobs should and co
  • This rumor is so nebulous and unfounded that it's not even making the rounds at the most wild-wyed Mac fanboy rumor sites.
  • ...would just be the other shoe dropping.

    Think of history. Gil Amelio buys NeXT for technology to move The Rhapsody Project (next generation Mac OS) forward. He gets The Steve on the Board Of Directors as part of the bargain. Six months later, Amelio is out on his ass, and The Steve is iCEO.

    I think that Disney will be harder for The Steve to assimilate than Apple was. I give it two years on the outside. Just two years.

    Oh yeah, and for the naysayers who were talking about how Apple didn't swallow Pixar even
  • Given its past purchases of Pixar and Nothing Real, this wouldn't surprise me. It'd really give Apple an "in" to contracts in government/defense and academia, and strengthen their legitimacy in high-performance computing (Xserve really isn't enough). Plus they could have the most the talented computer scientists on the planet working on Quartz, optimizing mpeg4 and refining Renderman among other Apple graphics software. I'd expect SGI's entire workstation division to be dumped (unless Apple wants to sell
  • I worked at Disney from the 95 to 2000 when I was in high school and college. A lot of change occured at Disney during the 90's. When I left it seemed like a lot of the "Disney Magic" had left. In 95 a disney job was one of the highest paid hourly jobs in Central FL. In 2000 a Disney job was one of the lowest paying jobs. The employees weren't as proud of the company and this was pretty evident to me as I worked seasonal. Eisner really screwed the company over for short term goals in the 90's. Hopef
  • The aquisition of Pixar more closely resembled a merger. It was a sale mostly because the Pixar holders got Disney stock. The assets were merged though. Pixar is acting as an independent company but Disney has access to the talent pool. If Disney and Apple joined it would probably be a more formalized merger since both companies are of a similar size. There'd be a stock value placed on the joined company and the share holders would recieve the new company stock. It actually could be a win win for all since

  • No (Score:3, Informative)

    by celerityfm ( 181760 ) on Sunday February 26, 2006 @06:35PM (#14805681) Journal
    Wouldn't a Disney acquisition eliminate the possibility of working with NBC's shows on iTunes, or working with Viacom/MTV?

    No, it would not eliminate the possibility at all. The easiest way to explain this is by looking at the wealth of shows that are produced by one conglomerate yet air on other conglomerates (and don't even get me started on syndication). Here is a short list of classics:

    House (NBC-Universal produced but airs on FOX)
    Scrubs (Produced by Disney's studio Touchstone but airs on NBC)
    Buffy/Angel (FOX produced but aired on WB and UPN)
    West Wing (AOL/Time Warner produced but airs on NBC)

    etc.

    The list goes on. The point is that just because content is produced by one conglomerate doesn't mean that the possibility of having another conglomerate distribute that content has been eliminated.

    So regardless of what happens in this case you can expect that the possibility for other congolemerate's and independent's content to appear on iTunes is still very much in play. (Note that NBC was the last network to move into a conglomerate that included production, so they are/were more likely to air content produced by other conglomerates).

    PS

    I hate using the word conglomerate here.. any other suggestions?

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