Walt Disney Co

Walt Disney Co Annual Report - 2023 Performance Breakdown
Your no-nonsense guide to Disney’s year, updated with fiscal 2023 data (through Sept 30, 2023).

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What Disney Does & How 2023 Went

Disney creates magic through movies (Avatar, Marvel), theme parks, TV networks (ABC, FX), streaming (Disney+/Hulu), and Broadway shows. This year was split: parks and merchandise thrived, while streaming losses and ESPN’s cable decline weighed on results.

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The Financial Picture: Growth or Trouble?

• Revenue: $88.9 billion (up 7% from 2022).
  • Parks/Merch: $32B (+12%)
  • Movies/TV Licensing: $25B (flat)
  • Streaming: $18B (+10% revenue, but still lost -$4B)
• Profit: $3.4B net income (vs. a loss in 2022).
• Verdict: Growing overall, but streaming remains a money pit.

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2023 Wins

1. Theme Parks & Merchandise (Carried the Company!)

   • Ticket sales: $15B (+12%) – thanks to pricier add-ons like Genie+ passes.
   • Food/Merch: $10B (+9%) – $8 churros and $45 lightsabers work!
   • Global parks crushed it:
     • Europe: Revenue up 28% to $13.2B.
     • Asia-Pacific: Revenue surged 66% to $10.8B.
   • Why it matters: Parks generated $9.1B profit (15% of Disney’s total).

2. Movies & TV Licensing

   • Blockbusters: Avatar 2 and Guardians 3 earned $4.3B globally.
   • Hidden revenue: $1.2B from Hulu/ABC for airing ESPN content.

3. Disney+ Subscribers: 150M total (+14M this year).

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2023 Challenges

1. ESPN’s Decline

   • Cable collapse: Revenue dropped 8% to $14B.
   • Profit fell 34% to $1.9B – worst drop in years.
   • Bright spot: ESPN+ subscriptions are growing, but not fast enough.

2. Streaming Losses

   • Disney+/Hulu lost -$4B (Marvel shows and movies are expensive!).

3. Movie Flops

   • Ant-Man 3 earned just $476M globally (Disney keeps ~50% of that).

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Financial Health Check

• Cash: $12B (down slightly from tech upgrades).
• Debt: $47B (improved from 2022, but big loans start coming due in 2026).
• Risky Debt Terms: Some loans have variable interest rates tied to global benchmarks.
• Tax Trouble: $1.2B in tax credits expire starting in 2026.
• Verdict: Stable today, but debt and interest rates could bite later.

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Top Risks for Investors

1. Streaming Uncertainty: Can Disney+ turn a profit before subscribers get bored?
2. ESPN’s Identity Crisis: Cable is dying, and streaming sports is hyper-competitive.
3. Park Dependency: If tourism slows, Disney loses its profit engine.
4. Debt Load: $47B owed, with repayments starting in 2026.

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Competitor Comparison

• Netflix: More streaming subs, but Disney bundles with Hulu/ESPN+.
• Universal (Comcast): Disney’s parks are twice as profitable.
• Warner Bros.: Disney’s movie lineup is stronger (Deadpool 3 vs. Barbie 2).

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Leadership Moves & Strategy

• Bob Iger’s Comeback: Cut 7,000 jobs, sold part of Hotstar India, and refocused on core brands (Marvel, Pixar).
• New Investments: Expanding parks in Shanghai, Hong Kong, and Europe.

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What’s Next for Disney?

• Price Hikes: Disney+ now costs $15/month (ads-free tier).
• Park Upgrades: New Avatar lands and cruise ships.
• Movies: Deadpool 3, Inside Out 2, and a Snow White reboot.
• Ads Everywhere: More commercials on Disney+/Hulu to boost revenue.

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Should You Invest?

The Good: Parks are printing money, movies still dominate, and debt is manageable for now.
The Bad: Streaming losses and ESPN’s decline could drag profits for years.
The Unknown: Can Disney+ become the next Netflix, or will it stay a cash-burning side project?

Summary: Disney is a bet on Bob Iger’s turnaround skills and whether families will keep paying $300/day for park tickets. If you believe in the magic (and have patience for streaming losses), it’s a household name with upside. If not, the debt and ESPN risks might spook you.

Not financial advice, but we hope this helps you decide! 🎢