‘Much of the Company Is Dead Weight,’ Analyst Thinks Disney Is Going Extinct

It’s only been a week, but 2024 has been pretty good so far for the Walt Disney Company.

Wish (2023), which bombed at the American box office, has found an audience overseas, banking more than $200 million. ESPN has been a rating juggernaut with the NFL and College Football Playoffs. And Walt Disney World has been slammed with a post-New Year’s bump.

Related: Disney Learns a Billion Dollar Lesson: ‘They’ve Got to Cut”

But it’s only been a week, and these few pieces of good news hide news hide some more significant underlying issues with The Walt Disney Company.

Investor Place analyst Dana Blankenhorn looked at Disney’s issues and found the usual suspects: decline in film revenues, proxy battles with activist investor Nelson Peltz, inconsistent attendance at Walt Disney World, and declining television ratings.

But Blankenhorn found none were the biggest problems facing Disney and its CEO, Bob Iger. Instead, Blankenhorn compared the current state of Disney to the newspaper industry 30 years ago, and we all know that didn’t end well.

Like newspapers, Disney controls aging technology that no longer applies to the modern consumer. For example, the average American spends approximately seven hours daily on their phone. But half that time is spent on social media. The Walt Disney Company, without a social media platform, is ceding its customer base for half of its time online.

The other half of that time is spent on various apps and streaming services, which Disney does have. But they are fighting for half of the consumer’s time in a bottomless ocean, while the social media giants only have to compete with each other.

Companies like Alphabet (Google/YouTube), Meta (Facebook), Microsoft (LinkedIn), and Apple are much larger than Disney. They can all buy and sell whatever they want, including Disney. But none of them want the entire company because, as Blankenhorn put it, “much of the company is dead weight.”

Like newspapers have done to survive, Disney took its content and put it behind a paywall in the form of Disney+, Hulu, and ESPN Plus. Disney has constantly raised its prices for that content, forcing more people out at a higher cost.

So, what is the solution for Disney CEO Bob Iger and investors? Like many who have come before him, Blankenhorn suggests that investors dump Disney stock until a solid plan is in place. He also suggests that Disney keep its theme parks and spin off the rest of its assets.

But will that satisfy Wall Street and Peltz? That seems unlikely. So, Bob Iger better dig deep to save The Walt Disney Company.

We will continue to update this story at Disney Fanatic.