We’re in the golden age of media conglomeration. CBS and Viacom became one company. Fox bought Tubi for $440 million. WarnerMedia operates Cinemax, CNN, TNT and a handful of others. Disney owns ABC, Marvel, Star Wars, and the list goes on and on. Now there’s a new rumor that Apple is buying Disney.
Well, “new” might be a bit of a misnomer. This is actually a rumor that’s been floating around for a while, and it ramped up last month significantly. Despite all the talk back then, neither company would confirm anything moving forward.
The main takeaway from that was that it’s unlikely Apple would buy all of Disney, but it’s possible the company might buy parts of it. On paper, Apple has significantly more capital than the mouse house, but only $202.6 billion in cash on hand. The words “only” and “billion” in the same sentence are wild.
As we reported earlier this year, “A complete sale of Disney would likely cost Apple more than the company’s worth, both financially and when it comes to government interference.”
So why are we still talking about this?
What are the latest rumors about Apple buying Disney?
The latest rumor is that well, there are more rumors. CNBC is reporting that “more than a dozen” execs at Disney, both from now and from the past, say that CEO Bob Iger wants to stay in his position as long as he possibly can and then sell the whole thing to Apple.
The companies do have a storied and tangled history with each other. Back in 2006, then Apple CEO Steve Jobs became Disney’s biggest shareholder when Disney bought Pixar for $7.4 billion. It also put Jobs on the Disney Board of Directors and helped foster a relationship between Iger and Jobs.
There’s also the statement from Iger’s autobiography “The Ride of a Lifetime,” where Iger claims that the two huge companies would have merged if Jobs was still alive.
“I believe that if Steve were still alive, we would have combined our companies, or at least discussed the possibility very seriously,” Iger said in his book.
The nuts and bolts way to think about this is to think about Disney as a whole. In addition to the TV stuff, there’s the cruise ship business and the parks and all the merchandising. Apple probably wouldn’t really want to deal with any of that, so a whole sale of the company is unlikely.
Also, while Apple TV Plus is one of the more visible parts of the Apple empire, it doesn’t really hold a candle to the company’s core business of selling devices. Buying ESPN, with its shrinking subscriber base, may not really be worth it at all, especially since it would cost around $100 billion.
Another idea is buying Disney to help with content for its upcoming headset, but that doesn’t seem like it would be worth it. This doesn’t even touch the regulatory issues. The head of the Federal Trade Commission, Lina Khan, has been cracking down on big tech acquisitions, as evidence by the troubled Microsoft and Blizzard merger, which was supposed to move forward on July 18th but is caught up in legal obstacles and lawsuits.
Anthony Sabino, an attorney and professor at St. John’s University, told The Hollywood Reporter that Iger’s contract extension and the potential sale of Disney TV holdings “demonstrates that they [Disney’s board] want him to guide the company, and there’s no thought of him selling off the company.”
“It’s a given, it’s an absolute certainty that if there was some talk of Disney merging with somebody else, that would be scrutinized to the nth degree by the FTC, by the Department of Justice,” Sabino said. “So that would be basically walking into a bear trap that I’m not sure any company would be willing to get itself immersed with.”
Finally, there’s the issue of corporate culture. Both companies have clear and delineated ways of doing things, those would have to merge and that would be difficult to say the least. When you look at everything all together, a merger seems more and more unlikely.
However, stranger things have happened, so we can never say never.