There have been some very interesting changes brewing at Walt Disney Co (NYSE:DIS), and I believe they all foretell good things for DIS stock.
First and foremost, ESPN President John Skipper resigned in late December. He cited a substance addiction problem for the departure. If true, one hopes he is able to defeat it. Aside from that, however, this move was necessary and long overdue. ESPN has been a disaster for some time, shedding subscribers like a repeatedly molting amphibian. Skipper made things exponentially worse by permitting employees to openly air their political opinions and even center programming around politics.
It wasn’t just that the politics leaned to the left, it’s that sports was the one area where – until the past year or two – Americans could escape to in order to escape politics. The left-leaning programming and opinions just served to alienate the merit-based values of conservative America. Thus, ESPN’s problems got worse.
Optimism for DIS Stock
CEO Robert Iger now has an opportunity to bring a true programming turnaround artist in to ESPN. And boy, he’d better choose carefully. The right person could send ESPN back to its former glory and really help DIS stock. For the most part, Iger’s stewardship of Disney stock has been exceptional. Therefore, I’m hopeful.
Interestingly, there were two departures from the DIS Board of Directors this week. Facebook Inc (NASDAQ:FB) Chief Operating Officer Sheryl Sandberg is out, and so is Twitter Inc (NASDAQ:TWTR) CEO Jack Dorsey. Why? If you are to believe them, it’s because FB and TWTR are moving into streaming media, and their board presence represents a conflict of interest.
That’s certainly true. However, both are also part of left-leaning political culture. Both FB and TWTR have been repeatedly hammered for alienating and censoring conservatives. It seems not entirely unlikely that Iger may be cleaning house politically. Regardless, Dorsey offered nothing to the board. Sandberg is as smart as they come, though, and doubtless she was a value-add that will be difficult to replace. But there are plenty of great people out there for the DIS stock Board of Directors.
DIS Stock for the Future
I’ve written before that DIS is being very smart by moving into immersive entertainment, both with an in-park strategy and by infusing its forthcoming Orlando hotel with Star Wars-immersive content. A virtual-reality driven experience at Disneyland’s Downtown Disney has been getting great reviews. Now a patent has been filed which, according to the Orlando Business Journal, “aims to use various toys like gloves, and gestures to control environmental factors such as projections, holograms and displays with virtual adversaries.”
This may not sound like much, but it is significant. Colleagues in the immersive entertainment space agree that Disney is truly looking to the future, intending to make visitors to any of its parks or resorts truly and completely interactive and immersive. At some point we theorize that Disney will create Westworld for Star Wars. This will allow visitors to literally spend an entire vacation inside a Star Wars universe, from beginning to end, with their daily reality and routine entirely within that world.
Disney stock is going to rise over time anyway, but I see DIS management as starting to move the pieces of its vast board into position for very long-term price appreciation.
Lawrence Meyers is the CEO of PDL Capital, a specialty lender focusing on consumer finance and is the manager of The Liberty Portfolio at www.thelibertyportfolio.com. He owns DIS stock. He has 23 years’ experience in the stock market, and has written more than 1,800 articles on investing. Lawrence Meyers can be reached at TheLibertyPortfolio@gmail.com.
