00:00Let's turn to Disney right now. It is trading 2% lower in the pre-market, even after it beat Wall
00:06Street estimates with the bulk of profits coming from the Parks and Cruises unit led by Josh
00:12DeMauro, a candidate to succeed Bob Iger, whose star now looks much brighter. The outlook, though,
00:18disappointed. Let's bring in Bloomberg's Geetha Ranganathan, Bloomberg Intelligence Media Analyst.
00:23Geetha, what's the concern here? Because the parks business looks so strong,
00:28and so I guess we expect DeMauro to succeed Iger.
00:33Yes, we do. He has been the frontrunner for the CEO job, along with Dana Walden.
00:39But Matt, we've really seen how parks has become such an important part of the business. So even
00:44though it contributes only about 38% to 39% of total company revenue, it is 60% of profits. And as you
00:50kind of look forward to the future with all the investments that they're making, we're looking
00:54at like $60 billion in investment over, you know, another eight to 10 years, parks is definitely
00:59going to be the main bread and butter for this company. There's a lot of attention. They are the
01:03largest theme park operator in the world. Remember, they bring in about 150 million global visitors
01:07every year. So this is really the monster, you know, when it comes to theme parks. And it only makes
01:13sense that, you know, Josh DeMauro would lead, I think, in many ways. In terms of guidance, I think
01:18the second quarter, fiscal second quarter guidance was a little bit light. But I think Disney has said this
01:22time and time again, that this is really, fiscal 2026 is really going to be a second half-weighted,
01:28you know, earning story. So, you know, I think a little bit disappointing, but it wasn't a complete
01:35shock. Does putting DeMauro at the top, though, Geeta, and just based on these earnings, change
01:41Disney's priorities, specifically when it comes to things like sports? I mean, falling 23% with all the
01:48higher rights fees and all the money that they're coughing up to try to get live sporting games.
01:51Do you think that this is a market that maybe pushes back against Disney with some of that
01:56cash burn and maybe looks to a potential new CEO in the parks division as a growing part of the
02:01business? Absolutely. Absolutely, Dani. I think, you know, a few years ago, I think the market
02:08completely underappreciated the value of the parks. I think just after COVID and we've kind of seen this
02:14whole resurgence, you know, in parks, profitability especially, they've undertaken so many new
02:21initiatives. They've really kind of boosted everything across the board. And we're seeing,
02:25you know, quarter after quarter, even though some quarters we're seeing, you know, attendance
02:28come in a little bit light, profits are still really strong. And that's really what counts.
02:33And yet, I think there's been kind of a little bit of a shift. Obviously, Disney used to be this huge
02:38TV network company. That is being de-emphasized a little bit. Sports, I think, will continue to be a
02:42huge part of the portfolio. But then as you kind of piece out everything, you know, in terms of
02:47where the real profits are going to come, especially as we map out things over the next
02:51decade or so, it is most certainly going to be the theme park and the cruise business.
02:56Geetha, thank you so much for that update. After Disney earnings falling nearly 3%,
03:00Geetha Raghunathan from Bloomberg Intelligence.
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