A recent article from The Hollywood Reporter has breathed new life into the longstanding rumor of a potential Apple acquisition of The Walt Disney Company. The August 9 article by Kim Masters and Alex Weprin proposes that the company’s recent effort to trim down their extensive television offerings could pave the way toward an eventual Apple takeover of Disney.
Apple Takeover Rumors
Rumors of a potential Apple takeover of Disney started to swirl in November 2022, shortly after Bob Iger’s return to the company as CEO. Reactions to the rumor varied, but the potential magnitude of such an acquisition prompted many to question its feasibility.
It is Disney’s recent efforts to downsize their television offerings that signal a potential sale could be on the horizon, according to THR. Iger shared his openness to the idea of selling a portion of Disney’s television assets during a July appearance on CNBC’s “Squawk Box,” even concluding that linear TV “may not be core to Disney.“
The company took initial steps toward the potential shrinking in late July, with Iger reportedly bringing former top Disney executives Tom Staggs and Kevin Mayer back as consultants to assist with television strategy. Staggs, Disney’s former COO and CFO, and Mayer, the former lead of Walt Disney Direct-to-Consumer & International (Disney’s streaming arm), left the company in 2019 and 2020, respectively. The two partnered in 2021 to launch Candle Media.
Staggs and Mayer’s shepherding of a potential television offload could be the first step in a general Disney downsizing that could better facilitate a sale, per Masters and Weprin.
[Staggs and Mayer] know the company well, and not only can they help figure out how to trim Disney+ costs, but they can also assist in a possible sale of the linear TV assets, including the ABC broadcast network and its eight local TV stations, as well as cable channels like Freeform and National Geographic.
Masters and Weprin also wrote that a source predicted Disney would “load . . . assets [like Disney Channel, Disney Junior, and FX] with debt and sell to private equity.”
[The source] believes the properties, which could be expected to generate $7 billion a year in profits, would sell for $50 billion…Disney could put $25 billion of Disney debt on the deal, cutting its debt load to $20 billion.
Disney’s interest in offloading their tangential offerings, such as their television assets, may stem from an interest in selling the company as a whole, as Masters and Weprin write that we are now seeing “the outlines of a slimmed-down Disney that could be a tempting acquisition target” for Apple, a company “sitting on $62 billion in cash.”
The Federal Trade Commission would need to approve any potential acquisition, something that would perhaps be more easily facilitated given a general Disney downsizing. Apple and Disney, however, are still two massive companies with $2.77 trillion and $159.8 billion market caps, respectively — any acquisition would be closely looked at.
Masters and Weprin bring up two recent cases that may one day be pertinent; they write that the FTC has “faltered in its efforts to block Microsoft’s takeover of the video game publisher Activision Blizzard,” a case in which Microsoft made concessions that could “[provide] a possible road map for a Disney deal with a tech giant.” The writers also bring up the 2022 blocking of Penguin Random House’s proposed acquisition of Simon & Schuster, a case in which the Department of Justice “made a ‘monopoly’ argument” it could potentially use again in a potential Apple takeover of Disney.
It’s important to note these are just rumors at present, sparked by Disney’s new television strategy and Staggs and Mayer’s return. For every insider who thinks a potential sale may be looming, Masters and Weprin share insight from sources who don’t see a sale forthcoming. These ever-present rumors will be interesting to keep an eye on in the coming years; Iger inked an extension to remain Disney CEO through 2026 in July.
Disney’s Relationship with Apple
The looming rumors perhaps stem from Disney’s longstanding relationship with Apple. Apple founder Steve Jobs was an early investor in Pixar, selling the animation studio to Disney in January 2006 through a deal shepherded by Iger. The New York Times reported at the time that Jobs became “a nonindependent director at Disney as well as its largest individual shareholder” as part of the agreement. Iger is also a former Apple Board of Directors member.
A CNBC article published in 2019 notes Disney was among the “first major companies to develop apps” for Apple’s handheld products, namely the iPhone and iPad. Iger and Jobs had a strong friendship prior to Jobs’ death in 2019, a relationship Iger highlighted in his 2019 book “The Ride of a Lifetime.”
The two companies more recently made headlines in June 2023 when Disney was announced as a content creator for Apple’s forthcoming Apple Vision Pro, a mixed-reality headset that will be immediately compatible with Disney+. The headset will allow users to immerse themselves in Disney content, with “The Mandalorian” being showcased as an example of potential functionality.
How would you feel about a potential Apple takeover of Disney? Let us know in the comments.