Ross Gerber Says He Would Not Buy the Dip in Disney

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00:00So, Ross, let's talk about this. I know that you have owned Disney. You do own Disney, but

00:04you've lowered that stake a little bit here. When you take a look at the reaction to Disney

00:09shares falling nearly 8 percent today, is that a dip you would consider buying?

00:14Not in Disney shares currently, no. And there's many reasons for it. But, you know, it was also

00:19a pretty negative day for stocks overall. So, you know, Disney was probably hurt worse because of

00:24that. But in general, they're still struggling with the two main issues that they are trying to

00:30address. Number one, that linear TV continues to just, you know, get decimated quarter after quarter.

00:36It seems like it'll never end. And so they've got streaming now profitable to help offset that. But

00:42you're still working with a gain in one area and a loss in another area. And it's kind of working out

00:47to be even. And then the second part, which is, I think, the more the reason why the stock's down

00:52is that the content they're making just has not been as good as in the past. And their hit and

00:57miss content creates choppy quarters and it creates variable results. Because the way that

01:02the Disney hit machine used to work was they would have a great Marvel movie and a great Pixar movie

01:08guaranteed every year. And that was like a couple billion just in the bank. And now what's happening

01:14is that is not happening at all. And so the Marvel movies are stale. They've done 100 Star Wars movies.

01:20They're stale. They just like have nothing really driving the type of IP enthusiasm that was created

01:29in some of the other movies that we've seen this this year, for example. And I just think it's

01:34really hurting Disney. Yeah, I heard Matt Miller make the point on Bloomberg Television this morning

01:38that you think about some of the movies that they have coming up. Basically, all of them are sequels

01:43here, Ross. It sounds like you're not taking a lot of comfort in what we saw with more of their

01:47in-person experiences when it comes to parks, when it comes to cruises.

01:51Well, I thought those numbers were actually quite good, actually. So I was actually more

01:55concerned about parks and resorts just globally with tourism and spending, but we didn't really

02:00see a decline there. So I was actually pretty happy. And parks and resorts and experiences is a

02:05great business with a huge moat. But where they were really hurt was in the content and the licensing

02:10where that was down 29 percent revenue wise. And and, you know, once again, that's making movies

02:16and it drives everything in the Disney kingdom. And if you're not making new hit movies, it's really

02:23hard because you're just selling the same IP. You know, how many avatars am I going to buy for my

02:27kids? You know, it's like they already have it, you know. And well, that's one thing I'm curious

02:32about, Ross, too, is also I mean, I don't think anyone doubts the strength of its existing IP. But there's

02:38also been a lot of discussion about creating something new. Right. I mean, it's one thing

02:42to just keep rebooting the same stuff. But but when am I going to get the next Disney classic

02:47that is going to lead to new IP, new characters, if you will? Yeah. And I think that's what they

02:54call, you know, the magic of Hollywood, which isn't really a quantifiable thing. You know,

02:58sometimes you hire the best people and they make a crappy movie. Sometimes you hire a bunch

03:02of nobodies and they make a great movie. But we saw this with the K-pop Demon Hunter with

03:07with Netflix. They didn't expect it to be such a big hit out in the theaters. And I went out and

03:12killed it for them. And that's the kind of IP that you used to see at Disney. And so you see other

03:17companies, Paramount Skydance, you know, ironically, you know, John Lasseter left Disney because of

03:22the issues he was having. And he went to Skydance and Skydance has made some great stuff. So, you know,

03:28the guy is a tough guy to work with for various reasons. But but he was also the creative force behind

03:33Pixar. And at some point you have to accept that you lost that. And and so I don't I don't know

03:40where they go. They you know, it's a very competitive business for IP now that used to only have three or

03:46four players. And now you got like eight players and they all have tons of money. So it's a hard

03:51business to be in now. I am curious. I mean, getting to that idea of the hard business about

03:56who's really going to run this company, we should point out we're basically at the three year

04:00anniversary of Bob Iger's return to the CEO chair. And they said today that they are going to make a

04:06decision, an announcement, hopefully by March of next year of who his permanent replacement will

04:12be. I guess, A, do you think we actually will see a replacement for Iger sometime soon? And two,

04:18who do you think would actually be best for that role? Well, they've they've pretty much said,

04:24like, you know, this is going to happen. So I do still see it happening. And who I think is best

04:30for the role is none of the above. See, the problem with Disney is it's basically three or four

04:35very different businesses. So running parks and experiences is completely different than running

04:40the linear cable business versus the the streamers versus the sports business. So you've got all these

04:48different businesses with different heads that are all good at their jobs, but none of them have that

04:52unifying power across the other businesses like like Iger has. Yeah. And this problem that Disney

04:58has, they have great leadership in each division and they're all vying for this CEO job. But what I

05:05fear is none of them are capable of running all the divisions. And we saw this with the Jimmy Kimmel

05:09disaster, just a really a lack of decisive management decisions and a lack of bravery on Disney's part

05:16because they don't have that kind of leadership coming up that should be, you know, really one person

05:25or two people who are extremely capable and decisive leaders. And that's what Disney needs moving into

05:33the next chapter that they have. And I don't think they've found that yet.

05:37Well,

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