As legacy studios like Disney face formidable problems, a new report suggests CEO Bob Iger might revisit a “once-unthinkable option” — that Apple might buy the company, or at least a stripped-down version of it.
After all, in a near-future of even greater tech-company dominance over entertainment, Disney may need deep-pocketed protection. And its longstanding connection with Apple could come into play.
Often discussed, often dismissed: Could Apple buy Disney?
The story in The Hollywood Reporter cites a veteran Hollywood executive the publication talked to about the possibility of Apple buying Disney. It comes up from time to time. Iger even said a merger probably would’ve happened if Steve Jobs had lived longer.
But this time … could it actually happen?
“It’s an idea that keeps being discussed, even though many top executives have scoffed at it and many still do,” the article stated. “Apple doesn’t want to buy a studio, they say, and there’s no way the feds would allow a huge deal like that to go through.”
Selling off assets, consolidating debt
And yet the source wouldn’t rule it out.
“I don’t think [Apple] would buy the company as it presently exists,” he said. “But if you see Bob [Iger] start to divest things … that feels like he’s prepping for a sale. And there’s clearly no buyer like Apple.”
So if Disney slims down, it might become a tempting acquisition target for Cupertino, especially as the federal government may have less antitrust objection to such a deal.
And Iger recently made some possibly slimming moves. He talked to CNBC about how Disneys’s linear TV networks like FX “may not be core” to the business, suggesting they may soon be for sale.
Yeah, Apple can afford to buy the Mouse
In purely financial terms, of course Apple could afford to buy the Mouse, too. Apple has about $62 billion in cash and a roughly $2.8 trillion market cap. Disney’s market cap is $158 billion — pretty big for a studio but small next to tech behemoths — before any slimming down.
“And while it may be very true that Apple doesn’t want to buy a studio, maybe it would want to buy this studio — the one that, despite the challenges of the moment, has a vault full of priceless IP and remains the most valuable brand in entertainment,” The Hollywood Reporter wrote.
A ‘special relationship’
It also mentioned the lengthy “special relationship” between Disney and Apple. CEOs Steve Jobs and Bob Iger each served on the other’s board. Iger left Apple’s board the day the company said it would launch Apple TV+.
And of course Iger’s public enthusiasm about the new Vision Pro headset came up.
“The fact that Disney CEO Bob Iger was on stage touting Apple’s Vision Pro goggles demonstrates the compelling strategic fit between Disney’s content and Apple’s wearable technology,” an analyst recently wrote.
Studios’ ‘deteriorating economics’
Analysts agree that the company probably will be sold within a few years to avoid the “deteriorating economics” of competing against tech behemoths taking over streaming content they scarcely need to profit from to survive, unlike studios.
As many observers speculate that the ranks of traditional studios will continue to diminish, it’s possible the landscape may soon include just Apple, Amazon, Netflix and some mashup of players like NBCUniversal, Warner Bros. and Paramount.
The report speculated that Iger might be tempted to offer Disney to Apple for that reason, after selling off parts and consolidating debt to sweeten the deal.
But Disney might not sell and antitrust blocks could be big
But not all observers agree signs are pointing toward a sale.
One law professor describing himself as an “insane Disney fan” noted Iger’s contract extension and any possible sale of TV assets “demonstrates that they [Disney’s board] want him to guide the company, and there’s no thought of him selling off the company.”
And the prospect of the Biden administration seeking to block big mergers and take other antitrust actions through lawsuits is likely to give both companies pause, although recent attempts to block mergers have had mixed results.