Disney takes $ 1 billion for termination of license agreements to stream content; Quarterly sales up, profit decreases

Disney beat streaming subscribers, but its financial performance missed the mark in the second quarter of 2022 to a staggering $ 1.023 billion, it said: “It was up to the customer to end previous movie and TV content licenses. under which “Your direct customer service.

Revenue of $ 19.2 billion was up 23% year-over-year, but less than Wall Street’s forecasts: about $ 1 billion. Earnings fell 48% to $ 470 million. Earnings per share fell 26 cents to 50 cents. Excluding the articles, there was a fiscal hit, EPS was $ 1.08, up from 79 cents.

Disney did not specify the shows it withdrew in its earnings report Wednesday, but CFO Christine McCarthy told Wall Street that these licensing deals were registered as revenue at the time, so they were withdrawn. Numbers.

Disney and other streamers are rejecting the content. The six original Marvel series for Netflix, Daredville, Jessica Jones, Luke Cage, Iron Fist, Punisher and Defenders also limited series SHIELD OF WONDERFUL AGENTSAired exclusively on Netflix, it will move to Disney + starting March 16. They will be available in all other Disney + markets later this year.

Led by Bob Chapek, the company divides its business into two giant segments: media / entertainment and parks. Disney Media and Entertainment Distribution (DMED) includes line networks (national and international), broadcasting and content sales / licensing that take place in the studios. Total DMED sales increased 9% to $ 13.6 billion. Operating income fell 32% to $ 1.9 billion.

Linear Networks’ revenues grew 5% to $ 7 billion; DTC jumped 23% to $ 4.9 billion; Content / licensing fell 3% to $ 1.9 billion. Revenue from online networks was $ 2.8 billion. DTC’s losses increased from $ 290 million to $ 887 million. Content revenue dropped 95% to $ 16 million.

The national broadcast made a profit due to the increase in advertising revenues and the subsidiary ABC, the latter favored by the now famous Oscar winner (spent later in the third fiscal quarter of last year) and by higher remuneration, partly offset by a drop in spectators. Cable profits fell due to rising programming and production costs for the NFL College Football Playoff, NBA, and college basketball.

Sales in the parks doubled to nearly $ 6.7 billion from $ 3.1 billion and the division’s operating income was $ 1.8 billion, compared with a loss of $ 400 million last year. Here the recovery continues Despite the turbulence in Asia, Shanghai remains closed. Indoor parks are a financially brilliant place for higher priced business and savings on new technologies to book, order and attend, as well as reduced demand.

The parks business is something that sets Disney apart from streaming rivals like Netflix, although the force has failed to save DIS shares from a bearish slide, dragging the industry down. Disney is the only entertainment industry included in the DJIA 30 and was Dow’s worst performer this year. The stock closed today 2.2% lower at $ 105, below its 52-week low and close to $ 190 last year. As of 5:30 am ET, they are still 2.6% behind in late trading.

Wall Street sentiment in the flow coincided with turmoil in a large stock market, which was rocked by stubborn inflation, a 20-year high, rising interest rates, supply chain delays, and the war between Russia. and Ukraine.

The quarterly figures came as Disney and Chapek got involved in the ongoing culture wars in the United States. The CEO’s response to Florida’s so-called “Don’t Be Gay” bill, although viewed by some companies as overdue, has exacerbated the conflict. Florida Republican lawmakers and Governor Ron Desantis voted in favor of legislation that violates Disney’s right to a special self-contained district at Walt Disney World. The Reedy Creek Development District basically allowed the company to bypass red tape for construction or projects in the park, so while the financial impact on Disney is still unclear, it clearly wasn’t important enough to ask any analyst when they called. . Of. Reed Creek won’t collapse for a year and a half.

Yesterday Senator Josh Haley unveiled a loud bill to protect Disney’s copyrights. The regulation will only apply to amusement and theme park companies with a market capitalization of more than $ 150 billion. Grounding: Includes a provision for deferral of implementation for up to 10 years.