Disney (DIS)
Executive Board Pitch
Target Price: $50 – 25% Upside
Business Segments
 Media Networks
 Parks and Resorts
 Studio Entertainment
 Consumer Products
 Interactive Media
Media Networks
 Competitive Advantage
 Regulatory Regime
 Strong Brand Loyalty
 Cable Networks
 ESPN, Disney Channels Worldwide, ABC Family, SOAPnet, A&E/
Lifetime
 Domestic Broadcast Television Network
 Television Production – ABC Studios & ABC Media Productions
 Domestic Television Stations – Eight Regional Markets
Parks and Resorts
 Competitive Advantage
 Massive PPE Investment (high incremental returns)
 Niche Industry Conglomerate
 Walt Disney World Resort
 Magic Kingdom, Epcot, Animal Kingdom, etc.
 Disneyland Resort
 Disneyland, Disneyland California Adventure, Disneyland Paris
 Hong Kong Disneyland Resort
 Hong Kong Disneyland
Studio Entertainment
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Competitive Advantage
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Investment in PPE
Strong Brand Loyalty
Theatrical Market
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Home Entertainment Market
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Television Market
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Pay-Per-View, Video On Demand, Pay Television, Free Television, International Television
Disney Music Group
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Walt Disney Pictures, Pixar, Marvel
Walt Disney Records, Hollywood Records, Lyric Street Records, Buena Vista Concerts, Disney
Music Publishing
Disney Theatrical Productions
Consumer Products
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Competitive Advantage
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Merchandise Licensing
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Strong Brand Loyalty
Patent Protection
Physical Products
Intellectual Property
Publishing
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Disney Publishing Worldwide
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Juvenile Publishing, Digital Publishing, Disney English
Retail
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Disney Store & Internet Sales
Interactive Media
 Competitive Advantage
 Utilizing Brand Name for Growth into New Platforms
 Games
 Distribution of handheld and console games
 Playdom, Inc. – online social network gaming
 Online
 Disney.com
 Disney Family Network
Business Segment Results
Why We Like Disney
 The competitive advantages that give the company a
“moat” (e.g. ESPN, Disney name, etc.)
 Recent acquisitions that build on the franchise
 Aggressive Expansion into emerging markets—China,
India, and Russia—leading to margin expansion
ESPN
 70 percent of users seeking sports
content on mobile devices rely on
ESPN for live sports, entertainment,
expert commentary, news and stats.
 Powerhouse brand name: “For 11
straight years, ESPN has been the
most valued network to cable
operators.” Jay Rasulo – Senior
Executive Vice President and Chief
Financial Officer, The Walt Disney
Company
Marvel Acquisition
 On December 31, 2009, the Company completed an
acquisition of Marvel
 Entertainment, Inc. Marvel has a rich roster of
characters and stories: Disney is leveraging them across
their businesses new revenue opportunities.
Unrealized Expectations
 On November 18, 2011, the Company acquired a 49%
ownership interest in the Seven TV network from UTH
Russia Limited UTH) for $300 million.
 On August 27, 2010, the Company acquired Playdom, Inc.
(Playdom), a company that develops online social games.
 Sticky media business with international growth
potential.
Management Team/Compensation
 Robert Iger - CEO
 James Rasulo – CFO
 Kevin Mayer – Executive VP
 Comparable total compensation to executives in
comparable firms (Viacom, Time Warner)
DIS
Robert Iger
TWX
33.434M Jeffry Mewkes
James Rasulo 11.074M
John Martin
Alan Braverman 7.793M Paul Cappuccio
Kevin Mayer
3.904M Gary Ginseberg
VIAB
26.303M Philippe Dauman
39.983M
10.162M
Thomas Dooley
31.549M
6.221M
Sumner Redstone
20.999M
3.591M
Michael Fricklas
7.863M
Competition
 Media Networks  Parks and Resorts  Studio Entertainment  Consumer Products  Interactive Media -
Mkt Cap
P/E
Profit Margin
EBITDA
DIS
71.59B
15.89
12
2,320M
VIAB
26.14B
12.23
15.21
1,078M
CBS
19.29B
16.71
10.61
837M
TWX
38.22B
14.45
11.63
1,824M
Valuation: EV/EBITDA Multiple
• Target Price of $50 represents roughly 25% upside.
Valuation II: DCF Check
Risks
 Potential risk factors include:
 ESPN margins
 Park attendance and Park margins
 Ad cyclicality
 Macro pressures