00:00The Experiences Division or the Theme Parks Division, as you just pointed out, makes up less than 40 percent of
00:05total company revenue, but almost 60 percent of profit.
00:09So really, it is the crown jewel, as you rightly alluded to it.
00:13And, you know, again, the profit there was really strong.
00:16And I think coming in, investor expectations were really, really low.
00:20Profits were up 20 percent.
00:22Remember, consensus was at about 10 and a half percent increase.
00:26So, again, really strong numbers.
00:27And what it really did was allayed fears because Comcast, which just reported a few weeks ago, talked about weakness
00:34and a slowdown, a demand slowdown in their universal theme parks, especially in Orlando.
00:39And now seeing Disney come out with such strong numbers really shows that, you know, they're executing really well.
00:45And demand continues to be strong as they head into the fiscal fourth quarter as well.
00:50But then, as you, you know, again said, streaming, which is part of that entertainment division, is really the growth
00:57catalyst for this company.
00:59And it's all about streaming profitability and how far and how far ahead they can get on operating margin for
01:06the streaming business.
01:06And they proved that they did a really good job this quarter.
01:10And there's obviously a lot more growth levers going forward.
01:14Keith, this is the second straight quarter of better than expected profitability for the CEO, Josh DeMauro, who succeeded Bob
01:22Iger in that role in March.
01:23Talk about big shoes to fill.
01:25What's the early read from investors on Mr. DeMauro?
01:29I think they're really liking all what they see.
01:33You know, Josh obviously has a very clear strategy.
01:36He's he's made some pretty big changes.
01:37So just today, for instance, they announced that they got rid of their 50 percent stake in A&E global
01:43media.
01:44They got about one point two billion dollars in cash and they're going to deploy that towards share repurchases.
01:49Then again, you have this new deal.
01:52They had to get out of their SORA deal after obviously SORA shut down.
01:55But now they have today they announced this new deal with TikTok.
01:58So, again, Josh is, I think, really kind of taking a hard look at all of the different businesses.
02:02He obviously knows that they need to reduce their exposure to, you know, linear media, linear TV.
02:09But, you know, they're doing all that they can in terms of streaming.
02:13And of course, he is a parks veteran, so he knows exactly, you know, how that business works.
02:18But it also looks like he's positioning Disney Plus to become this major hub for the entire Disney ecosystem,
02:25something almost akin to Amazon Prime for all things Disney starting in spring of 2027.
02:31And so I think that's going to be pretty exciting for the company.
02:33Yeah, that sounds very strategic.
02:36How do you think about how that's going to change the entertainment industry and how other media companies respond to
02:42that kind of positioning?
02:44Yes. I mean, Disney has a really unique hand to play here, Scarlett.
02:48I mean, they have theme parks, which really other than Comcast, nobody else has.
02:52Obviously, they have this great movie and studio business.
02:56And of course, that they're streaming business, too.
02:57And the one thing that they have or they do better than everybody else is ESPN and sports.
03:03They have huge, huge exposure there to all of the marquee sports rights.
03:07So, you know, again, it's all come down to one thing in the streaming world, which is engagement.
03:12And if they can build on that engagement and keep you within that Disney ecosystem for everything,
03:18I mean, whether you're buying a theme park ticket or wanting to watch a movie or wanting to watch a
03:21show on Disney Plus or Hulu,
03:23I mean, right there, that's a major differentiator versus their peers.
03:28So, Geetha, Paramount also reported numbers here.
03:32I'd love to get a sense of kind of what the company is saying these days about their, I guess,
03:38stalled merger with Warner Brothers Discovery
03:40and how they plan to operate as a single entity over the next 12 months.
03:46So their numbers yesterday, Paul, were actually pretty decent.
03:49And a lot of that was just the cost savings from the Skydance, you know, acquisition.
03:53So it's pretty clear that once they are able to get their hands on Warner Brothers
03:58and they're able to close on that transaction,
03:59they're obviously going to do all that they can to, you know, deliver on those $6 billion in synergies.
04:04But it's really been a very long and arduous road and it's not looking, you know, easy at all.
04:11So one of the things that I think people still are extremely concerned about is leverage.
04:14We know it's going to be about six and a half times at closing whenever that happens.
04:18And then the other thing that you have now is kind of this ticking fee, right?
04:22And so that's because this deal is going to get delayed by at least two full quarters.
04:26It was supposed to close on September 30th.
04:29It's going to be maybe closer to a March, end of March timeframe.
04:32But we're going to see close to almost about $1.3 billion in ticking fees.
04:37And guess how that's going to be funded?
04:40More share issuance.
04:41So we're looking at massive dilution here.
04:44I mean, Paramount Skydance, you know, a number of shares outstanding right now is $1 billion.
04:50It's going to go.
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