Rushfield: Apple + Disney - Maybe Not So Crazy?
Reasons why the mother of all Hollywood mergers might be closer than we think
Last week, Needham & Co.'s Laura Martin — one of those “influential Wall Street analysts” — made headlines when she suggested that a merger of America's two most storied corporations, Apple and Disney, would be worth more as a merged entity than they are apart.
Martin notes Apple is best at distributing content globally via two billion high-end mobile devices owned by 1.25 billion affluent customers. Disney, conversely, excels at creating world-class content that is distributed globally across digital screens, as well as the real world through theaters, parks, hotels and cruises, according to Martin.
Like the rest of Hollywood, I reflexively guffawed. Wall Street analysts have been shipping this fan fiction mash-up for well over a decade now and while it sounds good from a distance, we here in entertainment know that our marquee brand is too big a pill for any company — even Apple — to just swallow whole.
Well, I started thinking that one through and the answer I kept coming back to was, “I’ve heard of crazier things.” And I've seen more than a few come to pass in my time.
I talked about it a bit on our podcast last week, and felt the scorn of my colleagues, but I still continue to return to the idea that this could happen, and why I think this is no longer a crazy thing to contemplate.
Before I get into the weeds though, let's take a look at where we are. In the last decade, Hollywood threw away its Plan A (make profitable movies and TV shows) for a Plan B (throw wild amounts of money at chasing a streaming mirage). We are now living through the reckoning that follows the inevitable crash to earth.
More to the point, having done irreparable damage to Plan A, we’re looking for a workable Plan C, and for most companies, that has yet to emerge.
If there were ever a time for big, unthinkable things to happen, this is it.
Laura Martin offered a lot of fancy numbers and finance talk to explain why this marriage makes sense, but I want to take it back to something much more basic, more primal: the realm of corporate pop psychology.
And, of course, there is the already intertwined history of the two companies (with Bob Iger and Steve Jobs having served on each other’s boards).
The math of why this merger makes sense is of course, relevant: if the numbers don't add up from some angle, it wouldn't happen (usually). But here at The Ankler, I've found time and again that the most important force driving a company isn't the P and L, or even the stockholders — it's what the people running the company want to be doing, what they want to tell their friends they are doing, and the story of their own heroic career and how they see that playing out.
So let's take a closer look at an Apple/Disney marriage at that level and see how much sense this makes.