Disney Unveils Epic Games Fortnite Investment, ESPN Streaming Plans Amid Pressure from Nelson Peltz Disney Unveils Epic Games Fortnite Investment, ESPN Streaming Plans Amid Pressure from Nelson Peltz
Disney Tops Earnings Forecast Amid Nelson Peltz Pressure
Walt Disney CEO Bob Iger hit back at activist investors on Wednesday with a slew of announcements, including a splashy investment in “Fortnite” maker Epic Games and plans to launch an ESPN streaming service in 2025.
More On: Disney
- Walt Disney CEO Bob Iger hit back at activist investors on Wednesday with a slew of announcements, including a splashy investment in “Fortnite” maker Epic Games and plans to launch an ESPN streaming service in 2025.
- Iger revealed the plans after Disney’s board of directors authorized a $3 billion share repurchase program for the current fiscal year, and declared a dividend of 45 cents a share, a 50% increase from the dividend paid in January.
- Together they helped drive up Disney’s stock nearly 7% to $106.05 in after-hours trading.
- The company has been under pressure from activist investor Nelson Peltz, who is seeking Netflix-like profit for its streaming business, better box-office performance of its movies and more details about its plans to make ESPN a dominant digital platform.
- Peltz is asking shareholders to add himself and former Disney executive Jay Rasulo to the company’s board.
- A spokesman for Peltz’s Trian Fund Management said of Disney’s earnings on Wednesday: “It’s déjà vu all over again. We saw this movie last year and we didn’t like the ending.”
Epic Games Fortnite Investment
Among the new initiatives, Iger said Disney would take a $1.5 billion stake in Epic Games. The two companies would work together to create a “huge Disney universe” where consumers can interact with characters and stories from Disney, Pixar, Marvel, Star Wars and Avatar, he said.
“This marks Disney’s biggest entry ever into the world of games and offers significant opportunities for growth and expansion,” Iger said in a statement.
The partnership signals another attempt at interactive entertainment for Disney, which in 2016 shut down its Disney Interactive Studios, publisher of the toys-come-to-life game series “Infinity,” and announced it would instead license its characters to outside game companies.
ESPN Streaming Plans
Iger also offered details about the long-anticipated streaming launch of the flagship Espn sports network, which would be bundled with Disney+ and Hulu, and integrate features such as ESPN Bet, fantasy sports and e-commerce. He said it is likely to launch in August 2025.
A day earlier, Disney announced it would form a joint venture with Fox and Warner Bros Discovery to launch a streaming sports service that would combine their broad portfolios of professional and collegiate sports rights as well as their networks, including Espn, Fox Sports 1 and TNT,
Disney’s Response to Nelson Peltz
Asked if the moves would assuage Peltz, Iger said the quarterly results and new initiatives showed a team that was motivated, focused and “very optimistic.”
“The last thing that we need right now is to be distracted in terms of our time, our energy, by an activist or activists that, frankly, have a completely different agenda, and don’t understand our company, its assets, even the essence of the Disney brand,” Iger said on CNBC television.
Disney’s Financial Results
Disney posted earnings of $1.22 per share, excluding certain items, ahead of analysts’ consensus forecast of 99 cents per share for October through December.
Quarterly revenue was comparable to a year ago, at $23.5 billion, but short of projections of $23.6 billion.
Disney said it cut $500 million in costs across its Business during the quarter, and that it remains on track to meet or exceed $7.5 billion in savings by the end of the current fiscal year.