Walt Disney Co., locked in an escalating political feud with Republican Florida Gov. Ron DeSantis, has scrapped plans on a nearly $900 million investment in a new corporate campus in Florida that would have relocated more than 2,000 employees.
“This was not an easy decision to make, but I believe it is the right one,” Josh D’Amaro, chairman of Disney’s parks, experiences and products division, told employees Thursday in a memo viewed by MarketWatch.
“While some were excited about the new campus, I know that this decision and the circumstances surrounding it have been difficult for others,”D’Amaro wrote. “Given the considerable changes that have occurred since the announcement of this project, including new leadership and changing business conditions, we have decided not to move forward.”
Citing “changing business conditions,” D’Amaro said the project is dead, and employees will no longer be asked to relocate from Southern California. Many Disney DIS, +0.84%
employees balked at the company’s relocation plans when they were first announced by former Chief Executive Bob Chapek in July 2021. Chapek was fired by the board in November.
D’Amaro said employees who already moved to Florida may be able to relocate back to California. Disney World is Florida’s largest employer, with approximately 75,000 workers.
The reversal in Disney’s plans to develop in the town of Lake Nona, outside of Orlando, is the latest dispute between the media giant and DeSantis, who last year criticized Disney for publicly opposing a sex-education bill that he had championed. The rise in tensions has led to a spate of lawsuits and increasingly bitter war of words between the two sides.
$50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 3X points on select streaming services and online grocery purchases (excluding Target, Walmart and wholesale clubs), 2X points on all other travel purchases, and 1X points on all other purchases
Welcome bonus
Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $1,000 when you redeem through Chase Ultimate Rewards®.
Annual fee
Intro APR
Regular APR
20.74% – 27.74% variable on purchases and balance transfers
Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
Foreign transaction fee
Credit needed
Pros
Points are worth 25% more when redeemed for travel via Chase Ultimate Rewards®
Transfer points to leading frequent travel programs at a 1:1 rate, including: IHG® Rewards Club, Marriott Bonvoy™ and World of Hyatt®
Travel protections include: auto rental collision damage waiver, baggage delay insurance and trip delay reimbursement
No fee charged on purchases made outside the U.S.
Cons
$95 annual fee
No introductory 0% APR
Who’s this for? TheChase Sapphire Preferred® Card is one of the most versatile rewards credit cards, which makes it the perfect option for a trip to Disney World or Disneyland. You can redeem the rewards you earn with the Sapphire Preferred for flights, hotels, car rentals or cash back so you can cover any expenses associated with your vacation.
Standout benefits for your Disney trip: The Sapphire Preferred card earns Chase Ultimate Rewards points, which can help you book a Disney trip in a number of ways. You can redeem Chase points for cash back, use them to pay for travel or transfer them to 14 airline and hotel partners. The Sapphire Preferred also has a variety of travel insurance and purchase protection benefits, which can save you money when things don’t go as planend.
Information about the Capital One Venture Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
Rewards
5 Miles per dollar on hotel and rental cars booked through Capital One Travel, 2X miles per dollar on every other purchase
Welcome bonus
Earn 75,000 bonus miles once you spend $4,000 on purchases within 3 months from account opening
Information about the Capital One Savor Cash Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
Rewards
4% cash back on dining and entertainment, 4% on eligible streaming services, 3% at grocery stores and 1% on all other purchases
Welcome bonus
Earn a one-time $300 cash bonus once you spend $3,000 on purchases within the first three months from account opening
Annual fee
Intro APR
Regular APR
Balance transfer fee
3% for promotional APR offers; none for balances transferred at regular APR
Foreign transaction fee
Credit needed
Pros
Unlimited 4% cash back on entertainment purchases
Ability to redeem rewards at any amount, unlike some other cards with $25 minimums
No fee charged on purchases made outside the U.S.
Cons
$95 annual fee
No introductory 0% financing offers for purchases or balance transfers
Who’s this for? TheCapital One Savor Cash Rewards Credit Card earns bonus cash back in categories that are likely to take up a good portion of your Disney vacation’s budget: Dining and entertainment. This makes it a great choice for anyone who wants to maximize the rewards they earn while at Disney World or Disneyland.
Standout benefits for your Disney trip: The Capital One Savor card stands out because it earns 4% back on dining and entertainment (which includes theme park tickets). If you prefer to pack your lunch, this card also earns 3% back at grocery stores.
2% cash back: 1% on all eligible purchases and an additional 1% after you pay your credit card bill
Welcome bonus
Annual fee
Intro APR
0% for the first 18 months on balance transfers; N/A for purchases
Regular APR
Balance transfer fee
For balance transfers completed within 4 months of account opening, an intro balance transfer fee of 3% of each transfer ($5 minimum) applies; after that, a balance transfer fee of 5% of each transfer ($5 minimum) applies
Foreign transaction fee
Credit needed
Pros
2% cash back on all eligible purchases
Simple cash-back program that doesn’t require activation or spending caps
One of the longest intro periods for balance transfers at 18 months
Cons
3% fee charged on purchases made outside the U.S.
Estimated rewards earned after 1 year: $443
Estimated rewards earned after 5 years: $2,213
Who’s this for? TheCiti® Double Cash Card is a solid card for anyone who doesn’t want to deal with an annual fee or complicated rewards program.
Standout benefits for your Disney trip: The Citi Double Cash Card focuses on one thing, and it does it well — it earns cash back. With this card, you’ll earn 2% back on every purchase with no annual cap on the cash back you can earn. You’ll get 1% back when you buy and 1% back when you pay.
Earn unlimited 2 points for every $1 spent on travel and dining purchases and unlimited 1.5 points per $1 spent on all other purchases.
Welcome bonus
Receive 50,000 bonus points — a $500 value — after you make at least $3,000 in purchases in the first 90 days of account opening.
Annual fee
Intro APR
Regular APR
20.24% – 27.24% variable APR on purchases and balance transfers
Balance transfer fee
Either $10 or 3% of the amount of each transaction, whichever is greater
Foreign transaction fee
Credit needed
Pros
Up to $100 annual airline incidental credit
Priority Pass™ Select membership
25% to 75% more points for Preferred Rewards members
No fee charged on purchases made outside the U.S.
Cons
$95 annual fee
No special financing offers on new purchases
Information about the Bank of America® Premium Rewards® credit card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
It’s hard to go wrong with the Chase Sapphire Preferred Card because the points you earn can be redeemed in many different ways. Not only that, but it also comes with an excellent welcome bonus, lucrative bonus categories and some other useful perks.
Rewards
5X points per dollar spent on travel purchased through Chase Ultimate Rewards®
5X points per dollar spent on Lyft rides through Mar. 31, 2025
3X points per dollar spent on dining
3X points per dollar spent on online grocery purchases (excluding Target, Walmart and wholesale clubs).
3X points per dollar spent on select streaming services.
2X points per dollar spent on all other travel purchases
1X points per dollar spent on all other purchases
10% anniversary points boost
$50 annual Ultimate Rewards hotel credit
Bonus
Earn 80,000 bonus points after spending $4,000 on purchases in the first three months from account opening.
Annual fee
$95
Notable perks
You can transfer Chase points to over a dozen airline and hotel partners. This includes World of Hyatt, which has several hotels near Disney World or Disneyland that only cost 8,000 to 15,000 points per night.
Chase points are also useful for booking domestic flights and Chase partners with several airline programs that allow you to book certain routes for 10,000 points or less each way. For a family of four, it may only take 80,000 points to fly roundtrip to Orlando or Anaheim. Alternatively, Sapphire Preferred cardholders can redeem points for 1.25 cents apiece through the Chase Travel Portal, which makes 10,000 points worth $125 in travel.
The Chase Sapphire Preferred Card is also great for the many travel protections it offers, including primary rental car insurance, trip cancellation and interruption insurance and baggage and trip delay insurance. Just remember that you must pay for your travel with your card to be eligible for the insurance protections.
The Capital One Venture Rewards Credit Card is a popular travel credit card that can help you earn rewards to use for just about any travel expense. Plus, its straightforward points-earning structure means that you’ll be able to maximize the return for spending with minimal effort.
Rewards
5X miles per dollar on hotel and rental cars booked through Capital One Travel
2X miles per dollar on every other purchase
Bonus
Earn 75,000 bonus miles once you spend $4,000 on purchases within three months from account opening.
Annual fee
$95
Notable perks
What makes the Capital One Venture Rewards Credit Card shine is how you can redeem its rewards. The simplest way to use Capital One miles is to offset recent travel purchases at a rate of one cent per mile. This allows you to shop around to find the best deal, rather than be limited to the bank’s travel portal. Plus, although tickets Disney park ticket purchases are typically classified as entertainment spending, there’s a way to redeem miles for them. The trick is to purchase your tickets through an online travel agency like Undercover Tourist or Expedia as they code these transactions as travel purchases, which means you can offset them with miles.
To potentially receive an even greater value for your miles, you can take advantage of Capital One’s transfer partners. For example, you can transfer Capital One miles to Turkish Airlines Miles&Smiles at a 1:1 rate and book round-trip domestic award flights on United for only 15,000 miles.
Other perks include a credit of up to $100 to cover Global Entry or TSA PreCheck® membership and two complimentary visits per year to Capital One Lounges or 100+ Plaza Premium Lounges through the Partner Lounge Network, including a lounge at Orlando International Airport (MCO).
The Capital One Savor card earns bonus cash back in the categories where you’re likely to spend the most. The card offers bonus rewards for spending on Uber rides, dining, groceries, streaming services and entertainment.
Rewards
Bonus
Earn a one-time $300 cash bonus once you spend $3,000 on purchases within the first three months from account opening.
Annual fee
$95
Notable perks
While there are many cards that offer bonus rewards for dining and grocery store spending, the Capital One Savor card is among the few to offer 4% cash back on entertainment purchases. This makes it a go-to option for sporting events, concerts, movies and, of course, Disney tickets.
The Capital One Savor card charges $0 in foreign transaction fees, so it’s a great option if you’re visiting a Disney theme park in Europe or Asia. Cardholders can also benefit from a complimentary Uber One membership (through 11/14/2024) and access to exclusive entertainment events, such as the iHeartRadio Music Festival and the Capital One JamFest.
The Citi Double Cash Card has no annual fee and earns a flat 2% back everywhere. If you like to keep things simple, you can’t beat that.
Rewards
Earn 2% back on all purchases, 1% when you buy and 1% when you pay.
Bonus
None.
Annual fee
$0
Notable perks
Let’s put the Citi Double Cash Card’s 2% back on all purchases in perspective. The Disney® Premier Visa® Card — which has a $49 annual fee — only earns 2% back in Disney Rewards Dollars at gas stations, grocery stores, restaurants and most Disney locations. And the Citi Double Cash’s unlimited 2% back is double what the no-annual-feeDisney® Visa® Card earns in rewards for everyday spending.
To put it simply, if you want to earn rewards from purchases that you can put toward a Disney vacation, the Citi Double Cash is more lucrative than the branded Disney cards.
While the Citi Double Cash is technically a cash-back card, it earns Citi ThankYou points, which you can redeem in a variety of ways for one cent each. You can also transfer rewards to three of Citi’s travel partners: Wyndham, JetBlue and Choice Privileges. However, if you pair this card with the Citi Premier® Card, you’ll be able to transfer your ThankYou points to all of Citi’s transfer partners and potentially get more value from your points.
For anyone with a sizeable amount of money deposited with Bank of America or Merrill (including retirement savings), the Bank of America Premium Rewards Credit Card is a stellar cash-back card.
Rewards
2X points for every $1 spent on travel and dining purchases
1.5X points per $1 spent on all other purchases
Up to 75% bonus on rewards for eligible Bank of America Preferred Rewards members
Bonus
Earn 50,000 bonus points after spending at least $3,000 in purchases within the first 90 days of account opening
Annual fee
$95
Notable perks
The Bank of America Premium Rewards Credit Card comes with emergency travel benefits like trip cancellation/interruption insurance, trip delay reimbursement, lost luggage and baggage delay insurance and transportation assistance. It also comes with purchase protections like extended warranty and return protection coverage. Although there’s a $95 annual fee, it can be offset by the annual airline incidentals credit of up to $100 and Global Entry/TSA PreCheck application fee credit.
To choose the right credit card for your Disney vacation, you’ll need to know where you’ll be spending the most money. If you live within driving distance of a Disney theme park, earning airline miles may not be the best strategy. And if you prefer camping or packing your food, then hotel points or bonus cash back on dining purchases won’t do you much good.
Once you know what you’ll spend the most on, you’ll have an easier time choosing the right credit card, or credit cards, to help offset your biggest expenses and reward you for your most common purchases.
As with most rewards cards, the best credit cards for a Disney vacation will typically require a good to excellent score (670+ according to Experian). Secured credit cards are easier to get but often don’t earn rewards. However, a secured card could be a stepping stone to becoming eligible for lucrative card offers because it helps you rebuild and strengthen your credit.
The best credit card for Disney depends on your personal situation. That said, the Chase Sapphire Preferred Card is so versatile that it’s likely to be the best choice for most people. If you need to book flights or hotel rooms, you have multiple ways of doing that with Chase points, so you can cherry-pick the best deals. And if you want to pay for Disney tickets or just put gas in the car, it’s easy to convert Chase points into cash back.
On top of all that, the Chase Sapphire Preferred has one of the best welcome offers and is generously rewarding for all sorts of purchases.
Unless you have one of the Disney Visa cards and you prefer earning Disney Rewards Dollars, a cash-back credit card is a good type of card to consider for a Disney trip. Cash-back rewards are generally the only option for offsetting park tickets, food and other incidentals. If you know where you want to stay or what hotel chain you want to stay with, opening a hotel credit card can help you earn the points you need to book an award stay. And the same is true for airline miles, earning miles with an airline that serves your home airport may make sense. In that case, the right airline credit card can help save on airfare.
You can also easily search CNBC Select’s credit card marketplace for even more options. It allows you to filter the results by the credit score you need for approval, card type and card issuer.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit cardreview is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit cardproducts. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best credit cards.
To determine which cards offer the best value for Disney vacations, CNBC Select analyzed over 230 of the most popular credit cards available in the U.S. We compared each card on a range of features, including: rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
A pedestrian walks past a Pacific Western Bank branch in Beverly Hills, California on May 4, 2023.
Patrick T. Fallon | Afp | Getty Images
This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
Upbeat economic data couldn’t overcome the resistance stocks faced from disappointing corporate performance and persistent banking fears.
PacWest shares sank 22.7% after the bank said in a securities filing Thursday that its deposits dropped 9.5% last week, following media reports that the regional bank was “evaluat[ing] all options.” Seeking to head off contagion fears, Western Alliance said its deposits have increased by $600 million since May 2. Western Alliance shares fell 0.77%.
Elon Musk said he is stepping down as Twitter CEO and will oversee product and software. Twitter will get a new CEO, an unnamed woman, in six weeks. Tesla (not Twitter!) shares jumped 2.1% on the news, suggesting investors of Musk’s other company were pleased — or just relieved.
U.S. stocks traded mixed Thursday as markets were rocked by losses in Disney shares and pressure around regional banks. Asia-Pacific markets were mostly lower Friday. Taiwan’s TWII Index was unchanged even as Foxconn saw its first-quarter net profit slump 56% to 12.83 billion Taiwanese dollars ($417.2 million). Shares of the company, also known as Hon Hai Precision Industry, dropped 2.4%
The debt ceiling meeting between President Joe Biden and other leaders, scheduled Friday, has been postponed until next week, CNBC learned. But that’s a good thing because it allows lawmakers’ staffs, who are holding their own conversations, to make more progress before the big names are back in the same room, a source told NBC News.
PRO This chipmaker could hit more than $1 billion in revenue if things go well, according to Morgan Stanley. “Higher price points plus supply chain commentary is pointing to an opportunity that is multiples of our initial target,” wrote analyst Joseph Moore in a note to clients.
Upbeat economic data couldn’t overcome the resistance stocks faced from disappointing corporate performance and persistent banking fears.
First, the promising news (at least when it comes to inflation). April’s wholesale prices in the U.S. rose 0.2% for the month, less than the Dow Jones estimate of 0.3%. That translates to a 2.3% year-over-year increase, down from March’s 2.7% and the lowest since January 2021. In another sign inflation might be coming under control, initial jobless claims increased by 22,000 to 264,000 for the week ended May 6, according to the Department of Labor. That’s the highest reading since Oct. 30, 2021.
But that news didn’t shield markets from other fears. “Investor focus is now on both the economic backdrop and liquidity and what’s going on versus rates and inflation,” said Dylan Kremer, co-chief investment officer of Certuity.
And liquidity — or, in other words, the health of banks and their willingness or ability to make loans — was in focus again Thursday. PacWest shares tumbled, along with other regional banks like Zions Bancorp, which lost 4.5%, and KeyCorp, which fell 2.5%. The SPDR S&P Regional Banking ETF slid 2.5% Thursday.
Another big loser on Thursday was Disney, which sank 8.7% after the media giant reported it had lost subscribers from its Disney+ streaming service. That’s the largest one-day fall, in percentage terms, since Nov. 9, when the company slumped 13%.
Disney’s shares dragged down both the S&P 500, which declined 0.17%, and the Dow Jones Industrial Average, which slid 0.66%. However, the Nasdaq Composite managed to add 0.18%. The tech-heavy index was boosted by a 4.3% jump in Alphabet shares, which are trading at their highest level since August, thanks to investors’ optimism around the artificial intelligence products the tech giant announced at its annual developers conference.
After a heavy week of economic data releases, investor focus will turn to the looming debt ceiling in the U.S. Unease over a potential sovereign default has already spread through markets. For instance, yields for short-term T-bills have jumped sharply this month. Still, most economists and bankers — including JPMorgan Chase CEO Jamie Dimon — expect the U.S. to avoid defaulting. If they’re proven wrong, the results could, in Dimon’s words, be “potentially catastrophic.”
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In an aerial view, a Pacific Western Bank building is seen on May 4, 2023 in Los Angeles, California.
David Mcnew | Getty Images
This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
Upbeat economic data couldn’t overcome the resistance stocks faced from disappointing corporate performance and persistent banking fears.
PacWest shares sank 22.7% after the bank said in a securities filing Thursday that its deposits dropped 9.5% last week, following media reports that the regional bank was “evaluat[ing] all options.” Seeking to head off contagion fears, Western Alliance said its deposits have increased by $600 million since May 2. Western Alliance shares fell 0.77%.
Elon Musk said he is stepping down as Twitter CEO and will oversee product and software. Twitter will get a new CEO, an unnamed woman, in six weeks. Tesla (not Twitter!) shares jumped 2.1% on the news, suggesting investors of Musk’s other company were pleased — or just relieved.
JPMorgan Chase CEO Jamie Dimon warned that the U.S. defaulting on its sovereign debt would be “potentially catastrophic” — though he expects U.S. lawmakers to avert a debt crisis.
On that note, CNBC learned the debt ceiling meeting between President Joe Biden and other leaders, scheduled Friday, has been postponed until next week. But that’s a good thing because it allows lawmakers’ staffs, who are holding their own conversations, to make more progress before the big names are back in the same room, a source told NBC News.
PRO This chipmaker could hit more than $1 billion in revenue if things go well, according to Morgan Stanley. “Higher price points plus supply chain commentary is pointing to an opportunity that is multiples of our initial target,” wrote analyst Joseph Moore in a note to clients.
Upbeat economic data couldn’t overcome the resistance stocks faced from disappointing corporate performance and persistent banking fears.
First, the promising news (at least when it comes to inflation). April’s wholesale prices in the U.S. rose 0.2% for the month, less than the Dow Jones estimate of 0.3%. That translates to a 2.3% year-over-year increase, down from March’s 2.7% and the lowest since January 2021. In another sign inflation might be coming under control, initial jobless claims increased by 22,000 to 264,000 for the week ended May 6, according to the Department of Labor. That’s the highest reading since Oct. 30, 2021.
But that news didn’t shield markets from other fears. “Investor focus is now on both the economic backdrop and liquidity and what’s going on versus rates and inflation,” said Dylan Kremer, co-chief investment officer of Certuity.
And liquidity — or, in other words, the health of banks and their willingness or ability to make loans — was in focus again Thursday. PacWest shares tumbled, along with other regional banks like Zions Bancorp, which lost 4.5%, and KeyCorp, which fell 2.5%. The SPDR S&P Regional Banking ETF slid 2.5% Thursday.
Another big loser on Thursday was Disney, which sank 8.7% after the media giant reported it had lost subscribers from its Disney+ streaming service. That’s the largest one-day fall, in percentage terms, since Nov. 9, when the company slumped 13%.
Disney’s shares dragged down both the S&P 500, which declined 0.17%, and the Dow Jones Industrial Average, which slid 0.66%. However, the Nasdaq Composite managed to add 0.18%. The tech-heavy index was boosted by a 4.3% jump in Alphabet shares, which are trading at their highest level since August, thanks to investors’ optimism around the artificial intelligence products the tech giant announced at its annual developers conference.
After a heavy week of economic data releases, investor focus will turn to the looming debt ceiling in the U.S. Unease over a potential sovereign default has already spread through markets. For instance, yields for short-term T-bills have jumped sharply this month. Still, most economists and bankers — including JPMorgan CEO Dimon — expect the U.S. to avoid defaulting. It’s hard to imagine what would happen if they were proved wrong.
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U.S. stocks ended mostly lower on Thursday, with the Dow booking a fourth day in a row of losses, as selling pressures returned to shares of regional banks. The Dow Jones Industrial Average DJIA, -0.66%
shed about 221 points, or 0.7%, ending near 33,310, according to preliminary FactSet data. The S&P 500 index SPX, -0.17%
fell about 0.2%, while the Nasdaq Composite Index COMP, +0.18%
closed 0.2% higher. Disappointing earnings from Disney Co. DIS, -8.73% tied to its streaming business helped drag down the blue-chip Dow, while shares of PacWest Bancorp PACW, -22.70%
fell more than 20% after it disclosed a 9.5% decline in deposits in recent weeks. Short-term rates remained volatile on Thursday as investors hoped for progress on the debt-ceiling stalemate in Washington D.C. The 2-year Treasury TMUBMUSD02Y, 3.891%
was pegged at 3.906%, up four of the past five trading days, according to Dow Jones Market Data. The 6-month Treasury bill was at 5.11%.
I’m calling it. The Streaming Wars are over. 2019-2023. RIP.
The race between the biggest media and entertainment companies to add streaming subscribers, knowing consumers will only pay for a limited number of them, is finished. Sure, the participants are still running. They’re just not trying to win anymore.
related investing news
Disney announced its flagship streaming service, Disney+, lost 4 million subscribers during the first three months of the year, dropping the company’s total streaming subscribers to 157.8 million from 161.8 million. Disney lost 4.6 million customers for its streaming service in India, Disney+ Hotstar. In the U.S. and Canada, Disney+ lost 600,000 subscribers.
It’s become clear the biggest media and entertainment companies are operating in a world where significant streaming subscriber growth simply isn’t there anymore – and they’re content not to chase it hard. Netflix added 1.75 million subscribers in its first quarter, pushing its global total to 232.5 million. Warner Bros. Discovery added 1.6 million to land at 97.6 million.
The current big media narrative is all about getting streaming to profitability. Warner Bros. Discovery announced last week its U.S. direct-to-consumer business turned a profit of $50 million in the quarter and will remain profitable this year. Netflix’s streaming business turned profitable during the pandemic. Disney on Wednesday announced streaming losses narrowed to $659 million from $887 million.
Netflix has curbed its content spending growth, and Warner Bros. Discovery and Disney have both announced thousands of job eliminations and billions of dollars in content spending cuts in recent months. Disney will “produce lower volumes of content” moving forward, Chief Financial Officer Christine McCarthy said during Wednesday’s earnings conference call, though Chief Executive Bob Iger noted he didn’t think it would have an impact on global subscriber growth.
But the key question isn’t looking at the growth numbers as much as it’s about the investor reaction to the growth numbers. Paramount Global fell 28% in a day last week after the company announced it was cutting its dividend from 25 cents a share to 5 cents a share to save cash.
Disney+ Hotstar subscribers brought in a paltry 59 cents per month of revenue last quarter, down from 74 cents last quarter. It appears Disney is OK with losing these low-paying customers. Disney gave up its Indian Premier League cricket streaming rights last year. Those rights were acquired for $2.6 billion by Paramount Global.
Disney also announced it’s raising the price of its ad-free Disney+ service later this year. Disney’s average revenue per user for U.S. and Canadian subscribers rose 20% in the most recent quarter after yet another price increase was announced last year. Big price hikes typically aren’t the strategy executives use if the priority is adding subscribers.
Raising prices and cutting costs isn’t a great growth strategy. Streaming was a growth strategy. Maybe it will come back a bit with cheaper advertising tiers and Netflix’s impending password sharing crackdown.
But it’s highly unlikely growth will ever return to the levels seen during the pandemic and the early years of mass streaming.
That probably means the media and entertainment indudstry will need a new growth story soon.
The most obvious candidate is gaming. Netflix has started a fledgling video game service. Comcast considered buying EA last year, as first reported by Puck. Microsoft’s deal for Activision is now in jeopardy after UK regulators blocked the transaction. If that acquisition fails, Activision could immediately be a target for legacy media companies as they look for a more exciting story to tell investors.
While Disney shut down its metaverse division as part of its recent cost cuts, marrying its intellectual property with gaming seems like an obvious match. One can easily envision the growth potential of Disney buying something like Epic Games, which owns Fortnite, and building its version of an interactive universe through gaming.
More consolidation will happen – eventually – among legacy media companies. But one major gaming acquisition could start a run in the industry.
Perhaps The Gaming Wars is the next chapter.
Disclosure: NBCUniversal is the parent company of Peacock and CNBC.
Walt Disney Co. will increase the cost of ad-free Disney+ subscriptions this year while adding Hulu content to the Disney+ streaming service and removing some shows from streaming entirely, executives announced Wednesday.
Disney DIS, -1.02%
executives have been making changes to their streaming strategy in an attempt to lose less money from offering its content directly to consumers over the internet. The company launched an ad-supported version of Disney+ in the U.S. and other countries late last year, and increased the cost of its ad-free offering at the same time, while increasing costs of other services.
“Pricing changes we’ve already implemented have proven successful, and we plan to set a higher price for our ad-free tier later this year to better reflect the value of our content offerings,” Chief Executive Robert Iger said in a conference call Wednesday related to Disney’s quarterly earnings. “As we look to the future, we will continue optimizing our pricing model to reward loyalty and reduce churn, to increase subscriber revenue for the premium ad-free tier, and drive growth of subscribers who offer the lower-cost ad supported option.”
Iger returned as chief executive of Disney late last year, and has been overseeing the evaluation of Disney’s streaming strategy. One of the biggest question marks is Hulu, of which Disney now owns two-thirds, with the option to buy the remaining interest from Comcast Corp. CMCSA, +0.61%
as early as January.
Iger, though, has been rethinking the path for Hulu since returning. In an interview with CNBC earlier this year, he intimated that Disney could choose to sell the streaming service instead of buying the remaining interest. In his first big move with the service since returning, Iger said Wednesday that Hulu content would roll into Disney+ in the U.S. later this year.
“As a significant step toward creating a growth business, I’m pleased to announce that we will soon begin offering a one-app experience domestically that incorporates our Hulu content via Disney+,” Iger said in the conference call. “While we will continue to offer Disney+, Hulu and ESPN+ as stand-alone options, this is a logical progression of our [direct-to-consumer] offerings that will provide greater opportunities for advertisers while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience.”
Iger later clarified that the two apps will be combined only for those who subscribe to both.
“On the integrated app experience that we announced today, that’s more consumers that have subscribed to both services for now,” he said. “So in other words, it’s taking what we call the dual bundle and putting it together in one experience, which is obviously good for consumers. Why have to close out one app and open another one?”
After a wave of new streaming services appeared in recent years to compete with Netflix Inc. NFLX, +0.99%,
media companies are looking to combine some of their offerings as consumers deal with a web of potential subscriptions. Paramount Global PARA, -4.11%
plans to combine its Paramount+ and Showtime streaming services, and Warner Bros. Discovery WBD, -2.76%
is planning to combine HBO Max with Discovery+ while renaming the service Max.
When an analyst on Wednesday’s call suggested that Disney’s move revealed that Iger had decided to purchase the rest of Hulu, Iger responded by saying “it’s not really been fully determined what will happen in that regard.”
“Where we are headed is for one experience that would have general entertainment and Disney+ content together for the reasons that I just described,” Iger said. “How that ultimately unfolds is to some extent in the hands of Comcast and in the hands of basically a conversation or a negotiation that we have with them. I don’t want to be in any way predictive in terms of when or how that ends up.”
While adding Hulu content to Disney+, Disney will also remove some content from its streaming services, which will allow the company to save money that would be paid out as residuals for airing the content. Warner Bros. Discovery made similar moves as it looked to cut costs for its HBO Max streaming service last year.
“We will be removing certain content from our streaming platforms, and currently expect to take an impairment charge of approximately $1.5 billion to $1.8 billion,” Chief Financial Officer Christine McCarthy said in the conference call, without elaborating further.
Iger did elaborate on his vision for streaming in his second earnings report since returning to the company, laying out his general thoughts about the path forward for Disney’s streaming portfolio — which also includes ESPN+ and a version of Disney+ in India and other parts of Asia refereed to as Disney+Hotstar.
“First, it’s critical we rationalize the volume of content we’re creating, and what we’re spending to produce our content. Second, our legacy platforms enable us to expand our audiences and often augment our potential streaming success while at the same time, allowing us to amortize our content costs across multiple windows,” he said. “We also need to strike the right balance between our local and global programming, as well as our platform and program marketing. Finally, we must continue calibrating our investments in specific markets.”
Walt Disney Co. shares declined in after-hours trading Wednesday following an earnings report that showed Disney+ subscribers declining in recent months, as executives seek to cut losses in the streaming business.
Disney DIS reported fiscal second-quarter net earnings of $1.27 billion, or 69 cents a share. After adjusting for restructuring costs and other effects, Disney reported earnings of 93 cents a share, down from $1.08 a share a year ago. Revenue grew to $21.82 billion from $20.27 billion a year ago.
Writers walk the picket line on the second day of the television and movie writers’ strike outside Disney Studios in Burbank, California on May 3, 2023.
Robyn Beck | AFP | Getty Images
A writers strike, a feud in Florida and ongoing company-wide layoffs — there is a lot more than quarterly earnings for CEO Bob Iger and the Walt Disney Company to address on Wednesday.
As the pandemic era fades, Disney has staged a rapid financial recovery within most of its divisions, from theme parks to theatrical entertainment. Meanwhile, its streaming business has slowed and it continues to face headwinds in its traditional media business as consumers cut cable and advertising revenue plummets.
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Investors are keen to see if the newly returned Iger can overcome these concerns while paving the way for the future with a new succession plan.
The company reports is fiscal second quarter earnings after the bell.
Here are what analysts expect:
Earnings per share: 93 cents per share expected, according to a Refinitiv survey of analysts
Revenue: $21.79 billion expected, according to Refinitiv
Disney+ total subscriptions: 163.17 million expected, according to StreetAccount
Beyond day-to-day operations at the company, shareholders and industry analysts expect Iger to address a number ongoing challenges.
Additionally, the company is already seeing rippling effects from the ongoing writers strike, including the production shutdowns of Marvel Studios’ “Blade,” which was set to begin filming in Atlanta next month, as well as the Disney+ Star Wars series “Andor.”
There is also the third wave of expected layoffs within the company, that industry experts expect to see announced soon.
A view of the Walt Disney World theme park entrance on July 11, 2020 in Lake Buena Vista, Florida.
Octavio Jones | Getty Images
The Florida Chamber of Commerce has counted Disney as an ally for over a decade, and helped to propel Republican Gov. Ron DeSantis’ climb up the state’s political ladder.
Now, as the governor and one of the state’s largest employers feud, the powerful business lobbying organization hasn’t taken sides — a move that could risk damaging a relationship with either of the key players in the Sunshine State.
The Chamber has deep ties to one of Florida’s largest employers in Disney: the former chairman of the group’s board was Anthony Connelly, who was once the president of Disney’s Cruise Line. Disney also donated over $400,000 during the 2010 election cycle to a pair of political committees run by the Florida Chamber, according to the Orlando Sentinel.
Last month, the chamber boasted that Walt Disney World donated $100,000 to support STEM education in Florida. It highlighted Rena Langley, an executive at themassive Florida theme parkand a longtime member of the Chamber’s board.
The Chamber also has long tried to stay on the good side of DeSantis, who has largely promoted policies that companies support but nonetheless waged a protracted fight against one of his state’s biggest economic drivers. The group and many of its board members have also backed the governor’s campaigns, according to campaign finance records and statements reviewed by CNBC.
But as Disney and DeSantis descend into an increasingly venomous fight, the state Chamber has not defended or criticized either side. The business lobbying group has yet to weigh in on the dispute on its website.
David Jolly, who while a Republican member of Congress, represented Florida’s 13th congressional district, told CNBC that the state Chamber is among the business groups that are allied with both DeSantis and Disney, putting the lobbying organization into a virtually impossible position.
“The entire business and lobbying class are allies of both DeSantis and Disney,” said Jolly, who is now an MSNBC political analyst and has left the GOP. “The Chamber’s political division is probably the premier ally of the state GOP in producing polling and research in low dollar state House seats, and also mobilizes soft dollars around state legislative races.”
The Florida Chamber of Commerce declined to comment. A Disney spokesperson did not return a request for comment.
The fight began last year, when Disney spoke out against a Florida bill limiting classroom discussion of sexual orientation or gender identity, dubbed “Don’t Say Gay” by critics. Soon after, the governor and his allies targeted the special tax district that has allowed Disney to essentially self-govern its Florida operations since the 1960s.
Disney recently filed a lawsuit against DeSantis alleging the Republican has waged a “relentless campaign to weaponize government power.” The board of supervisors picked by DeSantis to oversee Disney’s operations voted Monday to sueDisney in response to the company’s litigation.
The feud has trickled into the 2024 Republican primary for president, as DeSantis considers a run for the White House. Former President Donald Trump, who has called DeSantis’ fight with Disney a “political stunt,” is planning to use a similar attack on the Florida governor if he enters the race, according to a person close to Trump who declined to be named to speak freely about the campaign’s strategy.
“Trump plans to say, ‘Ron can’t even beat Mickey Mouse in his own backyard, how can he take on China? How can he deal with Russia?,’” a close advisor to the former president told CNBC.
A Trump campaign spokesman did not return a request for comment.
As the state’s legislative session wraps up Friday, Republicans have backed multiple pieces of legislation targeting Disney.State legislative records show the Chamber has not officially lobbied any of the bills that went after Disney, including (HB)9-B. The bill, signed by the governor earlier this year, aimed to end the company’s self-governing status.
Republican state Rep. Fred Hawkins who introduced the (HB)9-B bill, told CNBC that the most he heard from the state Chamber was questions from leaders and members of the group “just asking what was in the bill and when it would be filed.”
The records show that the Florida Chamber of Commerce has reason not to get involved with the bitter feud despite having a historic alliance to Disney.
The state Chamber has made major contributions to a pro-DeSantis PAC, Friends of Ron DeSantis. Since DeSantis’ 2018 successful run for governor, the Florida Chamber of Commerce has donated $345,000 to the group, according to state campaign finance records.
Almost half of those donations came during the 2022 election cycle. The state Chamber lists DeSantis’ sweeping win over Democrat Charlie Crist as one of dozens of victories for the lobbying group within Florida during the last election cycle.
The state Chamber’s board is also littered with DeSantis allies, some of whom were financiers for DeSantis’ campaigns or appointees to state board positions.
Charles Lydecker, the CEO of insurance company Foundation Risk Partners, was a board member for the Florida Chamber as of 2020, according to a tax form filed by the group. Those forms are the most recent publicly available tax documents for the organization.
Lydecker has contributed $135,000 to the pro-DeSantis PAC since 2018. In 2019, DeSantis appointed him to the board of governors of the state university system. Lydecker, who is listed as a Chamber board member on the state university system’s website, did not return a request for comment.
Robert Grammig Jr., an attorney and partner at Holland & Knight, has worked with the state Chamber for years while supporting DeSantis’ gubernatorial campaigns. His Holland & Knight profile says that he was the Florida Chamber of Commerce’s chairman until 2019 and currently serves as chairman of the lobbying group’s International Business Council.
Florida state campaign finance records show that he repeatedly donated toward DeSantis’ two runs for governor, including $50,000 in 2022 to the Friends of Ron DeSantis PAC. Grammig did not return an email seeking comment.
H. Wayne Huizenga Jr., a businessman and son to the late billionaire H. Wayne Huizenga, was also listed as a member of the state Chamber board on the 2020 forms. DeSantis announced in 2020 that he was appointing Huizenga Jr. to the board of governors of the state university system.
The businessman gave at least $150,000 to the Friends of Ron DeSantis PAC during the 2022 election cycle, according to records.
It is unclear if Huizenga Jr. is still a state Chamber board member. He did not return a request for comment.
Hollywood writers are on strike for the first time in 15 years, halting production of TV shows and movies.
The Writers Guild of America announced Monday night its boards unanimously approved a strike effective 12:01 a.m. Tuesday. “Picketing will begin tomorrow afternoon,” the WGA said in a tweet Monday night.
Tom Holland is Spider-Man in the Sony-Marvel film “Spider-Man: No Way Home.”
Sony
LAS VEGAS — CinemaCon kicked off Monday with a major announcement from Sony Pictures — its upcoming “Kraven the Hunter” would mark the first R-rated Marvel film produced by the studio.
The reveal came during the company’s presentation at the annual convention for Hollywood studios and movie theater owners in Las Vegas, in which Sony unveiled new footage and trailers from its upcoming slate, including “Spider-Man: Across the Spider-Verse,” “Gran Turismo” and “No Hard Feelings.”
“F— yes, it’s rated R,” said Kraven himself Aaron Taylor-Johnson in a pretaped teaser for the film before Sony showed the first trailer for the profane and bloody action flick.
Kraven wouldn’t be the first R-rated superhero flick to hit theaters in the last decade. Fans of the genre have been treated to “Logan,” “Deadpool,” “Watchmen” and “The Suicide Squad” in recent years from 20th Century Fox (now owned by Disney) and Warner Bros. Discovery. But it opens the door for Sony to develop darker, bloodier and more mature films within the Spider-Man universe — namely, around the fan favorite character Venom.
Sony currently owns the film rights to Spider-Man and his cavalcade of villains and has found success in alternative universe productions that fall outside Disney’s Marvel Cinematic Universe. The companies have partnered on three MCU standalone Spider-Man films featuring Tom Holland in the spidey suit and have granted Disney permission to use the character in its ensemble films.
In 2023, the studio will have a sequel to its Oscar-winning animated feature “Spider-Man: Into the Spider-Verse.” On Monday, the company shared an extended look at “Spider-Man: Across the Spider-Verse,” in which Miles Morales reunites with Gwen Stacy after becoming Brooklyn’s full-time friendly neighborhood Spider-Man.
He’s catapulted into the Multiverse where he encounters a team of Spider-People charged with protecting it. When the heroes clash on how to handle a new threat, Miles finds himself pitted against the other Spiders.
Sony showed 14 minutes of the film — due out June 2 — to CinemaCon audiences, who laughed and cheered for the uniquely animated feature.
Josh Greenstein, president of Sony Pictures’ Motion Picture Group, teased that the company would release 23 movies in 2023, after being introduced via video by Will Smith and Martin Lawrence, who are currently filming “Bad Boys 4.”
Sony showed the opening clip of “Dumb Money,” a film by Craig Gillespie about how an everyday investor played by Paul Dano flipped the script on Wall Street, placing all his savings into GameStop in 2021. The film due out in October also stars Sebastian Stan, Seth Rogen, Pete Davidson, Shailene Woodley, America Ferrera, Anthony Ramos, Vincent D’Onofrio, Dane DeHaan and Nick Offerman.
It followed with trailers for “Insidious: The Red Door,” due out in July, “The Machine,” coming in May and “Gran Turismo,” hitting screens in August.
Sony also showcased a clip from Jennifer Lawrence’s upcoming R-rated drama “No Hard Feelings” to raucous applause. It also teased an R-rated comedy “Anyone But You” starring Sydney Sweeney and Glen Powell as well as a sequel to “Ghostbusters: Afterlife.”
After accepting CinemaCon’s Lifetime Achievement Award, Denzel Washington brought on stage Antoine Fuqua and Dakota Fanning to show a trailer of “The Equalizer 3.”
“You can see at Sony we are not f—ing around,” said Tom Rothman, chairman and CEO of Sony Pictures’ Motion Picture Group, closing out the presentation.
He revealed that Apple and Ridley Scott’s “Napoleon” will be distributed by Sony. The film, due out at Thanksgiving, will have a “robust window,” Rothman promised.
“Hold onto your tri-cornered hats,” he teased before showing the first footage of the war epic, which recieved thunderous applause.
An employee exits Goldman Sachs headquarters in New York, US, on Tuesday, Jan. 17, 2023.
Bing Guan | Bloomberg | Getty Images
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Markets were mostly flat on Tuesday despite a bevy of big companies reporting earnings. Investors were likely concerned about higher interest rates.
Goldman Sachs had a bad first quarter. The bank’s earnings fell 18% from a year earlier to $32.23 billion and its revenue dropped 5% to $12.22 billion. Revenue slid because the bank sold part of its Marcus loans portfolio at a $470 million loss.
Netflix’s earnings fell to $1.31 billion from $1.6 billion from a year earlier even though its revenue grew to $8.16 billion from $7.87 billion. This suggests its margins are narrowing. Separately, the company is delaying plans to stop users in the U.S. from sharing passwords after the scheme slowed subscriber growth in other countries.
Johnson & Johnson’s first-quarter sales grew 5.6% compared with the same period last year, though it reported a net loss of $68 million because of a lawsuit involving the company’s talcum powder. The consumer staples giant foresees headwinds for its pharmaceutical department, lowering its sales target for 2025 to $57 billion from $60 billion.
PRO Disney has a strong slate of films coming out — and its share could rally as much as 34.6% on the back of “tentpole titles” like “The Little Mermaid,” according to a Deutsche Bank analyst.
There are two types of banks, broadly speaking. First, commercial banks, which primarily serve consumers and businesses by accepting their deposits and extending loans to them. Second, investment banks, which help institutions and governments navigate complex financial transactions such as trading, mergers and acquisitions.
Intuitively, the way they make money is different. Commercial banks reap profits from the difference in interest rates between the loans they make and the deposits they receive, while investment banks earn fees on their dealmaking activity.
Bank of America belongs to the first category; Goldman the second. This explains why their earnings, fundamentally, diverged so much. In today’s high interest rate environment, commercial banks tend to earn more since they can charge higher rates for their loans while keeping deposit rates low, whereas investment banks typically see a fall in fees because of reduced financial activity.
Investors punished Goldman for the bank’s lackluster quarterly results and apparently confusing strategy, sending its shares down 1.7% — and they dipped a further 0.18% in after-hours trading. Investors were also let down by Johnson & Johnson’s sales forecast. The company’s shares dropped 2.81%.
Nevertheless, U.S. markets were mostly flat. Investors were probably more worried about interest rates, a problem of the future, than earnings reports, a snapshot of the past. And for good reason: Atlanta Federal Reserve President Raphael Bostic told CNBC he anticipates “one more move” on rate hikes, followed by a pause “for quite some time.”
Higher interest rates for longer means tighter margins, lower profits for companies and a general slowdown in the economy. No wonder markets are still, despite the bevy of earnings reports from big companies.
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Here are Friday’s biggest calls on Wall Street: Bank of America reiterates Amazon as buy Bank of America said it’s standing by its buy rating on the stock. “Maintain Buy on Amazon. Three overhangs on stock have been retail margin cuts, AWS revenue deceleration, and potential TAM saturation. [Thursday’s] letter set a positive framework for discussion of these on the 1Q call.” UBS reiterates Netflix as neutral UBS said all eyes will be on the password sharing crackdown when Netflix reports earnings next week. “We expect 1Q to show continued progress toward re-accelerating growth. We believe subs will come in ahead of mgmt’s outlook for ‘modest’ adds, helped by a slower ramp for paid sharing (shifting potential churn into 2Q).” Goldman Sachs upgrades VF Corp to buy from sell Goldman said in its upgrade of the apparel and footwear company that it sees improved profitability. ” VFC’s revenue and earnings trajectory has underperformed the market, but we believe the stock is nearing an inflection point with the balance of catalysts for the stock now weighted to the upside.” Read more about this call here. Piper Sandler downgrades Rivian to neutral from overweight Piper said it still likes the electric vehicle company but that it needs more capital. “In order for RIVN to justify its cost structure, the company must spread its investment over millions of units (just like Tesla does), and in order to finance such aggressive expansion, RIVN will need capital.” Read more about this call here. Mizuho initiates ResMed as buy Mizuho initiated the medical device maker of sleeping machines like CPAP and says ResMed is the “undisputed king of sleep.” “Our Buy rating is based on: 1) positive feedback from our proprietary Sleep survey that points to healthy underlying US volumes, 2) lingering pent-up demand due to US staffing shortages.” UBS reiterates Amazon as buy UBS said it’s standing by its buy rating on the stock but came away from the company’s shareholder letter with less optimism on a “game-changing direction around margins.” ” AMZN’s annual shareholder letter, a defense of investment, underscored the company’s commitment to invest and the breadth of Amazon’s ambitions – from retail and AWS, to content, healthcare, satellite internet, int’l, grocery, and more. A lot to manage. We come away less optimistic on any game-changing direction around margins and still unsettled by a cloudy outlook at AWS.” Citi opens a negative catalyst watch on Harley-Davidson Citi said it sees “increasing credit loss metrics for Harley-Davidson. “Our recent analysis of both securitized receivable delinquencies and used motorcycle pricing point to fewer borrowers making monthly payments and lower recovery values once bikes are repossessed, a recipe for increasing credit loss metrics and eventually a higher loan loss reserve.” Oppenheimer reiterates PulteGroup as a top pick Oppenheimer said the stock is still a favorite idea citing “multiple expansion.” “We expect multiple expansion given a positive backdrop for builders broadly and because PHM likely will have the highest ROE in the space this year.” Cowen reiterates Alphabet as outperform Cowen said it’s bullish heading into Alphabet earnings later this month. “Our 1Q Digital ad expert check call on 4/6 suggests that a resilient US consumer helped drive GOOG 1Q23 Search spend growth near 4Q levels despite NT macro headwinds.” Cowen reiterates Nvidia as outperform Cowen said Nvidia is a leader in AI. ” NVIDIA continues to lead from the front across all the most important AI verticals. Expect continued momentum in results.” JPMorgan upgrades Hello Group to overweight from neutral JPMorgan said in its upgrade of the China messaging and social search company and says it sees a “recovery.” “We upgrade MOMO from N to OW (recovery in 2H23 with better social sentiment).” William Blair reiterates Charles Schwab as outperform William Blair said it’s standing by its outperform rating on the stock heading into earnings next week. “First-quarter results should indicate that earnings momentum is slowing as cash sorting continues. Sorting is reducing sweep cash, which Schwab is replacing to a degree with higher cost short-term funding.” Stifel resumes Kraft Heinz, General Mills and Mondelez as buy Stifel resumed coverage of several food stocks like Kraft Heinz, General Mills and Mondelez and says they are at an inflection point. “While investors remain generally cautious on Food stocks after a strong performance in 2022, we believe the margin inflection could be stronger than expected and elasticity should remain stable and low.” Wells Fargo reiterates Estee Lauder as overweight Wells kept its overweight rating on shares of Estee Lauder and said China cosmetics import data signals a return to growth. “With our data tracking in China improving, and following constructive results from LVMH, we think it’s reasonable to assume a turn in China is underway.” Bank of America reiterates PayPal as buy Bank of America said it’s standing by its buy rating on the stock heading into earnings in early May. “Given ongoing macro cross-currents, we think the most likely scenario is for PYPL to continue providing top-line guidance one quarter at a time.” Barclays reiterates Disney as equal weight Barclays said it sees slowing streaming growth heading into Disney earnings in early May. ” Disney and WBD are both in another strategy transition phase and focused on taking out costs from the streaming business.” Bernstein reiterates Boeing as outperform Bernstein said it’s standing by its outperform rating on the stock after it a 737Max parts issue surfaced on Thursday. “Yesterday it was disclosed that Spirit Aerosystems identified a manufacturing process issue with a fitting used to attach the vertical fin of the 737MAX to the fuselage.” Stifel reiterates Microsoft as buy Stifel said it’s standing by its buy rating on Microsoft heading into earnings later this month. “Looking forward, a year ago management provided its early FY23 double-digit top and bottom line commentary, but we expect a less granular forward guide focused on OPEX vs revenue growth given the ongoing uncertainties within the global economy.” DA Davidson reiterates Deere as buy DA Davidson said the ag equipment company is a “near term buy.” “Ethanol usage does appear stable in the near term, and the megatrends are likely to take 20+ years to play out, making DE a near-term BUY.”
High-profile tech and media executives shared their experiences of working in and competing with China with lawmakers who visited California this week.
A delegation of about 10 members of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party made the trip west to meet with industry leaders and subject matter experts about key areas of concern when it comes to dealing with China.
Over the three-day trip that kicked off on Wednesday, lawmakers were scheduled to meet with Disney CEO Bob Iger and Apple CEO Tim Cook, as well as high-level executives from Google, Microsoft, Palantir and Scale AI. Also on the agenda were events with a group of producers, screenwriters and former studio executives who have experience working with China, as well as with venture capitalists and Stanford University experts, according to a source close to the committee.
The trip highlights the key role tech and media industries play in America’s increasingly complex relationship with China. While these industries often rely on the massive audiences and workforces available in China, dependence on the country raises concerns of human rights and free speech issues because of the government’s censorship controls, as well as supply chain risks.
The trip comes on the heels of a historic meeting in California between House Speaker Kevin McCarthy, R-Calif., and Taiwanese President Tsai Ing-wen on Wednesday. That meeting, which former Speaker Nancy Pelosi, D-Calif., also praised, enraged the leadership of the Chinese Communist Party. The Chinese government called the meeting a “provocation” and promised “resolute actions.”
In Hollywood, the group of lawmakers from the select committee learned about a range of topics related to competition with China. In a meeting with Disney’s Iger and later at a dinner with unnamed studio executives, censorship of creative content was a big focus, according to the source familiar with the committee’s activities. Executives discussed dealing with self-censorship to try to ensure a movie won’t offend the Chinese government even before filming begins, as well as edit requests they receive from the government in order to show films in the country.
In Silicon Valley on Thursday, according to the source, Microsoft President Brad Smith gave a presentation about artificial intelligence, warning that there is a narrow gap between the U.S. and China in the development of generative AI, which has been made popular by tools such as ChatGPT. He also discussed rare earth mineral mining and processing, which make up key components in certain tech devices. Smith and executives from Google, Palantir and ScaleAI attended a luncheon with committee members.
Lawmakers also met with experts from Stanford University, including those from the Gordian Knot Center for National Security Innovation, according to center founding member Steve Blank. In a phone call following the discussion Thursday, Blank said he communicated the need for a defense strategy that involves more public-private partnerships across different industries to get the U.S. up to speed with China. Blank said he was impressed by the bipartisanship and interest he saw from lawmakers in attendance.
“In general, the questions they asked, you would have been very proud to be an American sitting in that room,” Blank said. “They were bipartisan, and they were to the point and they were very smart. These people understand the issues, and they’re trying to help the country be better.”
Rep. Ro Khanna, D-Calif., a committee member who represents Silicon Valley, told CNBC in a phone interview ahead of the trip on Tuesday that he was excited for his colleagues to visit his home district. Khanna said it’s always valuable for lawmakers to spend time learning about cutting-edge technologies such as AI, quantum computing and climate tech to better understand how to both regulate and foster it.
“I think it would be wise for every member of Congress to spend a week in Silicon Valley,” Khanna said. “Technology is going to define so many fields from the economy to national security to our issues of citizenship, and we need people to be immersed in it, at least understanding it.”
Khanna and others have described the purpose of the trip as primarily a fact-finding mission. While the conversations will likely inform future policymaking and hearings, lawmakers entered the meetings aiming to learn from industry executives on the ground.
The group was also slated to meet with venture capitalists on Thursday, including Andreessen Horowitz, Khosla Ventures and SV Angel. Khanna expected the VCs would discuss how the government could “better collaborate with the private sector” to stay ahead of China in key areas of emerging technology.
On Friday, lawmakers were set to discuss cryptocurrency with experts at Stanford before traveling to Cupertino to meet with Cook at Apple’s headquarters, according to the source familiar with the committee’s plans.
Khanna said he anticipated the business leaders would inform the policymakers of any progress they’ve made in diversifying their supply chains out of China and how they use export revenue from China to invest in the U.S. When it comes to the meeting with Apple’s CEO, Khanna said he expected Cook would “speak candidly about the supply chain issues,” including the complexities and progress of diversifying production outside of China.
In a phone interview partway through the trip on Thursday, Rep. Haley Stevens, D-Mich., said she saw common themes between the sorts of challenges the tech and media industries face when it comes to China and those facing the automotive industry in her home state.
“Every meeting we’ve been in, in my opinion, has related back to Michigan’s economy and our ability to manufacture as a country,” Stevens said. “One of the themes that I came into the committee with as a manufacturing champion and as someone who understands the interrelatedness between manufacturing and tech is: What else do we need to do to incentivize and grow industrial policy in the United States of America?” Stevens said. She pointed to the passage of the Chips and Science Act as an example of incentivizing domestic semiconductor manufacturing.
“Now, we’re looking at other areas specific to supply chain vulnerabilities and weaknesses that are going to impact our economy and, aside from chips, we want to be competitive in quantum and artificial intelligence,” Stevens said.
On Thursday, the company named Asad Ayaz as its first-ever chief brand officer, a position that will require the Disney vet to create a singular vision of the company for marketing campaigns.
Ayaz’s appointment comes as Iger, newly returned to the House of Mouse, has begun reorganizing the company’s structure to put content production, streaming and marketing in the hands of creators. He is also seeking to cut $5.5 billion in costs. The company also recently rolled out its first wave of layoffs as it seeks to cut 7,000 jobs this year.
On Wednesday, the company tapped Joe Earley to take over the role of president of direct-to-consumer for Disney Entertainment. He replaces Michael Paull, and leaves his post as president of Hulu.
The new appointment also comes a week after Disney laid off Marvel Entertainment Chairman Ike Perlmutter. Perlmutter, however, Told the Wall Street Journal that he was fired for pushing too aggressively to cut costs and for clashing with creative executives.
Ayaz will continue as president of marketing for Walt Disney Studios, where he has overseen marketing and publicity for the studio’s films and TV series, as well as Disney+, since 2018.
“Asad is an exceptional creative leader with a deep understanding of what Disney means to millions of people around the world,” CEO Bob Iger said in a statement. “His taking on this role is particularly noteworthy and consequential as we commemorate our historic 100th anniversary, and I am confident that his strategic, operational, and creative prowess, along with his profound passion for Disney, will make him an outstanding steward of our stories, characters, brands, and franchises.”
Ayaz has handled massive marketing projects for Disney before. Over his 18 years with the company he developed and led marketing campaigns for “Star Wars: The Force Awakens,” “Black Panther” and “Avatar: The Way of Water.” He is responsible for the marketing of 13 of the top 15 box office debuts of all time, including the biggest worldwide debut ever: “Avengers: Endgame,” which tallied $1.2 billion in its first five days in theaters.
He will oversee the Disney100 campaign, which celebrates the 100th anniversary of the company.
A mugshot of Jeffrey Epstein released by the U.S. Justice Department.
Source: U.S. Justice Department
Google founder Sergey Brin, former Disney executive Michael Ovitz, Hyatt Hotels executive chairman Thomas Pritzker and a fourth billionaire, real estate investor Mort Zuckerman, will be subpoenaed in a lawsuit against JPMorgan Chase by the government of the U.S. Virgin Islands related to sex trafficking by Jeffrey Epstein.
The subpoenas were first reported Friday by The Wall Street Journal. A source familiar with the matter confirmed them to CNBC.
The subpoenas demand communications and documents related to the bank and Epstein, The Journal noted.
News of the subpoenas comes three days after it was reported that JPMorgan CEO Jamie Dimon will answer questions under oath in the lawsuit, which alleges that the bank ignored warning signs about Epstein for years and continued retaining him as a customer.
Kelly Sullivan | Getty Images Entertainment | Getty Images
Last week, the Virgin Islands in a press release noted that it “alleges JPMorgan Chase could have prevented harm and trauma faced by the survivors of Jeffrey Epstein’s heinous abuse.”
“But instead the bank chose to look the other way on these legal matters while continuing to use their banking relationship to grow their business with new clients introduced by Epstein,” the release said.
On March 20, Judge Jed Rakoff ruled the suit against the bank, as well as a similar one by women who say Epstein trafficked them, can proceed toward trial.
The plaintiffs claim that JPMorgan knowingly benefited from participating in Epstein’s trafficking scheme, which transported women to his residence in the Virgin Islands so that he could sexually abuse them.
Jamie Dimon, CEO, JP Morgan Chase, during Jim Cramer interview, Feb. 23, 2023.
CNBC
JPMorgan has denied allegations in the suits which are pending in U.S. District Court in Manhattan.
The bank earlier this month sued former JPMorgan investment banking chief Jes Staley, claiming he is responsible for the suits related to Epstein.
The bank seeks to claw back more than $80 million that it paid Staley. He quit as CEO of Barclays in 2021 after a probe by United Kingdom financial regulators over his ties with Epstein.
A lawyer for the Virgin Islands earlier this month said in court that Dimon knew in 2008 that Epstein was a sex trafficker. That was the year that Epstein first was hit with sex crime charges in state court in Florida.
“If Staley is a rogue employee, why isn’t Jamie Dimon?” the attorney, Mimi Liu said at the hearing,
“Staley knew, Dimon knew, JPMorgan Chase knew” about Epstein’s criminal conduct, Liu said.
A JPMorgan lawyer said at the time that the bank disputed those claims, “in particular the point about Jamie Dimon having any specific knowledge.” A bank spokeswoman has said, “Jamie Dimon has no recollection of reviewing the Epstein accounts.”
JPMorgan only ended its customer relationship with Epstein in 2013.
Epstein, a former friend of Donald Trump, Bill Clinton and Britain’s Prince Andrew, was arrested on federal child sex trafficking charges in July 2019. He killed himself a month later in a Manhattan jail cell after being denied bail.
The metaverse is among the first victims of Walt Disney Co.’s cost-cutting purge.
The Magic Kingdom is shutting down its next-generation storytelling and consumer-experiences unit, the small division that was developing metaverse strategies, as part of a plan to slash 7,000 jobs, according to a Wall Street Journal report on Tuesday.
Walt Disney Co. will begin the process of eliminating 7,000 jobs this week, company Chief Executive Bob Iger said in a memo to staff Monday.
“This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions,” Iger wrote in the memo, obtained by MarketWatch. “Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.”
Disney’s DIS, +1.64%
three-phase layoff is “part of a strategic realignment of the company, including important cost-saving measures necessary for creating a more-effective, coordinated, and streamlined approach to our business,” said Iger, who returned last year as CEO following the ouster of Bob Chapek.
Disney’s stock was up 1.4% in early-afternoon trading Monday. So far this year, shares have advanced 10% compared with the S&P 500 index’s SPX, +0.16%
gain of 3.8% over the same period.
Bob Iger, CEO, Disney, during CNBC interview, Feb. 9, 2023.
Randy Shropshire | CNBC
Disney will begin layoffs this week, the first of three rounds before the beginning of the summer that result in about 7,000 job cuts, according to a memo sent by Chief Executive Bob Iger.
The cuts are part of a broader effort to reduce corporate spending and boost free cash flow. Disney said last month it plans to cut $5.5 billion in costs, including $3 billion in content spend.
“This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions,” Iger wrote in the memo, which was obtained by CNBC. “Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.”
The layoffs were initially announced in February. The job cuts will be cross-company, hitting Disney’s media and distribution division, parks and resorts, and ESPN.
Disney is following the lead of Warner Bros. Discovery and other legacy media companies that are cutting jobs and spending. Disney has said its streaming business, led by Disney+, Hulu and ESPN+, will stop losing money in 2024. Disney shares are up about 8% this year after falling 44% last year.
“We have made the difficult decision to reduce our overall workforce by approximately 7,000 jobs as part of a strategic realignment of the company, including important cost-saving measures necessary for creating a more effective, coordinated and streamlined approach to our business,” Iger wrote. “For our employees who aren’t impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward.”
As I shared with you in February, we have made the difficult decision to reduce our overall workforce by approximately 7,000 jobs as part of a strategic realignment of the company, including important cost-saving measures necessary for creating a more effective, coordinated and streamlined approach to our business. Over the past few months, senior leaders have been working closely with HR to assess their operational needs, and I want to give you an update on those efforts.
This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions. Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.
The difficult reality of many colleagues and friends leaving Disney is not something we take lightly. This company is home to the most talented and dedicated employees in the world, and so many of you bring a lifelong passion for Disney to your work here. That’s part of what makes working at Disney so special. It also makes it all the more difficult to say goodbye to wonderful people we care about. I want to offer my sincere thanks and appreciation to every departing employee for your numerous contributions and your devotion to this beloved company.
For our employees who aren’t impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward. I ask for your continued understanding and collaboration during this time.
In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world – now, and long into the future. Please know that our HR partners and leaders are committed to creating a supportive and smooth process every step of the way.
I want to thank each of you again for all your many achievements here at The Walt Disney Company.
