(San Francisco) Activist investor Dan Loeb on Wednesday called on Disney to permanently suspend dividend payments to its shareholders and use the money saved to bolster its streaming platforms as the entertainment empire struggles to emerge from the pandemic.
Posted Oct 7, 2020 at 3:47 PM.
This capital – $ 3 billion per year – should "be spent entirely on the production and acquisition of content for direct-to-consumer distribution services," Dan Loeb said in a letter to Disney chief Bob Chapek.
The boss of the American investment fund Third Point would like to see the group accelerate the digital transition and focus on content for platforms.
According to him, this & # 39; daring & # 39; Disney's strategy to bridge the gap with other American media groups (such as AT&T or ViacomCBS), which do not have the same financial resources, 'beyond the model of cinemas and cable channels and alongside mainly digital companies such as Netflix and Amazon.
Disney announced the loss of 28,000 jobs in the United States in late September, mainly in theme parks, citing the closure of Disneyland for more than six months and the impact of the pandemic on its revenues in general.
Distance measures were taken by the group's physical activities, but benefited streaming services (Disney +, ESPN + and Hulu). They have over 100 million subscribers, including 60 million for Disney +, the minimum target the group set itself … within 5 years.
"It's a commendable start, but far from their potential," says Dan Loeb. “There are 1.1 billion households in the world with fast internet and 4 billion mobile subscribers. That's at least 1 billion Disney fans.
The investor is encouraging the California company to double its budget for Disney + content, citing the success of the Hamilton film, which "raised $ 2 million, according to analysts. subscribers "on the platform, while it cost" only 75 million in rights. "
He also returns to the chaotic early September release of Mulan, a movie billed at $ 30 on top of the subscription: c & # 39; is an "important lesson" showing that the "unlimited buffet" approach is the best way "to accelerate subscriber growth".
As for the possible opposition from those who observe dividends, "Businesses get the shareholders they deserve, ”said Dan Loeb, referring to American businessman Warren Buffett.
From April to June 2020, Disney raised $ 11.8 billion in sales, half the number of a year ago. Just the streaming arm achieved more than 2019 sales.