Episode summary
Disney's Lost Decade. What's Next? | Barron's Streetwise
Barron's Streetwise
· · Hosts: Jack Bary, Andrew Bary
Summary
Disney is still widely rated a buy, but the episode argues the stock’s lost decade came from a structural shift: the old cash engine was pay-TV ESPN, and cord cutting broke that model. The host and two analysts trace how Disney evolved from a film studio into a television business and then, after the decline of cable, into a company that now relies most heavily on parks, cruises, and other experiences.
One analyst says Disney was once “ESPN masquerading as a well-run media conglomerate,” because cable subscribers who never watched sports still funded the network. That era financed Pixar, Marvel, Lucasfilm, and a long run of park upgrades. But after 2017, Disney had to build streaming while linear TV shrank, and higher interest rates forced Wall Street to demand profits instead of growth at any cost.
The bulls still see upside, mainly from parks and from streaming becoming more profitable over time. But they also argue Disney Plus is not a Netflix-level business and may never be one. The more skeptical view is that Disney is stuck in the middle: good brand, valuable IP, but not enough content investment to become a true pay-TV substitute.
Key takeaways
- An analyst argues Disney’s core historical profit engine was ESPN and the cable bundle, not the parks or movies.
- The episode says Disney’s experiences division now produces almost 60% of operating profit and should keep driving earnings.
- Morgan Stanley’s view is that Disney Plus can grow, but catching Netflix would be very difficult and is not priced into the stock.
- Jason Basnney says higher interest rates ended the era when Wall Street would fund streaming losses, leaving Disney’s pivot unfinished.
- The bull case depends on stronger park earnings plus better streaming profits, while the bear case is that Disney stays stuck in the middle.
Notable quotes
“Catching up to Netflix will be very difficult for anybody”
How the episode opens
I was sit with money managers, portfolio managers, and I I'd say, "Why do you like Disney?" And they're like, "Oh, it's just a fantastic media conglomerate, and I used to say back, "No, it it's ESPN masquerading as a well-run media conglomerate."
Hello and welcome to the Baron Street Wise podcast. I'm Jack How and the voice you just heard, that's City Bank analyst Jason Basnney. He's talking about Disney, which is coming off a lost decade for shareholders. but which most of Wall Street still calls a buy. In a moment, we'll hear from Jason and another bull on the stock to understand the case for better returns from here. Listening in is our audio producer, Alexis Moore. Hi, Alexis.
Hi, Jack. — Alexis, have you been to Disney World?
Heck yeah. I went once as a kid and I've went many times when my kids were small. And I have a theory about the Disney parks.
You talk with a lot of people who say, "I used to go. It used to be fun, but then something happened. They closed my favorite ride.
They they put the movie tie-ins on everything or the prices went way way up or they got rid of my favorite free service, what have you. And a lot of that stuff really has happened in recent years. The prices have gotten up there.
But my theory is, you've heard the the famous explanation from the Saturday Night Live producer Lauren Michaels, how he talked about how everyone always says SNL sucks today. It used to be great in the past and now it's terrible. It's not funny anymore.
And when he digs a little deeper, he always finds that people's favorite time period for SNL was when they themselves were young.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- disney stock
- long-term underperformance
- wall street outlook
- bull case
- next catalyst
Companies and tickers mentioned
- DIS
- Disney
Watch the episode
Watch “Disney's Lost Decade. What's Next? | Barron's Streetwise” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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