Jim Cramer Thinks Disney's Reorganization Is Focused on 'Getting Rid of ESPN'

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OGSB
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Jim Cramer Thinks Disney's Reorganization Is Focused on 'Getting Rid of ESPN'

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Re: Jim Cramer Thinks Disney's Reorganization Is Focused on 'Getting Rid of ESPN'

Post by TUPF »

Having joined GE in 1988 when the Jack Welch cult or personality was in full swing, I can see arguments for either hanging onto ESPN or jettisoning it altogether. Welch said unless you are either #1 or #2 in your market you either fix, sell, or close the business. His focus was brutal and swift with no regard for the social costs. He gave Wall Street a woody for GE even after Welch rode off into the sunset with an incredible platinum parachute--until he couldn't keep his zipper zipped. Disney really could be packaging ESPN for sale if they think its days as #1 are over and no amount of fixes will stem the tide of a splintered viewership market like Cramer points out.

OTOH, where GE shined was its varied portfolio which cushioned its overall performance. At first Wall Street couldn't understand a company that made light bulbs, appliances, jet engines, train locomotives, gas turbines, had a major defense portfolio, and a growing self financing arm called GE Capital. Also, every business had to show double digit growth year over year or the Angel of Death GE helicopter would land with Welch and his CFO and later in the day there would be thousands of layoffs. If you owned GE stock it was heady times. As a line worker, not so much. The famous quote before he sold off GE Aerospace was "why the hell should I keep a business that makes 6% margins and lands me in the paper for killing babies?" Where GE broke its sword was GE Capital kept on showing outrageously attractive margins which of course was unsustainable. It got too big, too much a percentage of overall GE revenues, and when pushed to keep those margins growing, it took fatal shortcuts with huge losses. GE blamed it on a couple of bad actors but it was the GE culture which spawned the "on Friday we are even" mentality. Now GE is just another company and Welch shows up here and there on talk shows extolling how wonderful he was.

Disney may be going through one of those "what do I want to be when I grow up" corporate offsite navel gazing exercises and may well decide to jettison sports if they feel its not in their core portfolio. Does ESPN make high enough margins? Has ESPN seen its peak in an increasingly splintering sports market? Can ESPN be "fixed" like Welch used to say? If Disney's vision statement defines its entertainment mandate to just be of the screen and theme park which reinforces its screen ventures, ESPN will be spun off. I don't see ESPN dying just yet. But I do think its halcyon days are over and it may well be reaching its Hollywood Video final days of the growth curve. Capitalism shows no mercy.
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Re: Jim Cramer Thinks Disney's Reorganization Is Focused on 'Getting Rid of ESPN'

Post by WaveProf »

I've never been a fan of either organization (ESPN nor Disney) but their marriage has seemed to bring about the worst in both of them.
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Re: Jim Cramer Thinks Disney's Reorganization Is Focused on 'Getting Rid of ESPN'

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WaveProf wrote:
Sat Oct 17, 2020 2:15 pm
I've never been a fan of either organization (ESPN nor Disney) but their marriage has seemed to bring about the worst in both of them.
ESPN "The Weekend" at Disney World was the best thing ever invented at Disney. We were there when Priest Holmes went along with a slew of other sports stars. They had awesome sports drills set up & got to talk with celebrities. It was cool...until they decided to end it.
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Re: Jim Cramer Thinks Disney's Reorganization Is Focused on 'Getting Rid of ESPN'

Post by Johnny Mac »

you're actually believing something uttered by Jim Cramer? wow
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