Here is the critical thing to understand about The Walt Disney Company (NYSE:DIS): There is consistency across all of its brands. Disney has always been about family entertainment and DIS stock has benefited. Sure, the ABC network has a few racier shows in its 10 p.m. time slot. But the thing that Disney is, and has always been, about is entertainment for the masses.
Disney is also an American company. While DIS stock generates tons of revenue overseas at this point, Disney’s roots are in America.
DIS stock has been driven by entertainment that has been, by and large, rooted in family traditions and values. DIS stock has been a winner because it has led the way in creating believable female characters for its films. It’s a wise move, because it make young girls believers in themselves. These are truly family values.
Now, however, DIS stock is faltering. That is because ESPN has discarded the values that Disney was built on. ESPN has been transformed into a left-leaning political commentary channel instead of a sports channel, and that has harmed DIS stock. And Americans cannot stand it.
ESPN is Too Liberal
It’s not all Disney’s fault. The NFL and its owners have been far too tolerant of the anti-American sentiment exhibited by players who refuse to stand for the national anthem. A smattering of players have not stood in years gone by, the media never paid attention to them. Ever since the media has paid attention to them, NFL attendance and viewership have declined. One recent poll reported that 17% of respondents have stopped watching football for this very reason.
Now, some of this sits squarely on the heads of the owners. Jerry Jones sent a clear message to his players about the national anthem. You better believe they are all standing. The coaches who don’t are weak and hurting their own brand.
ESPN, however, is championing these players. Americans don’t like that.
ESPN just keeps making things worse. Curt Schilling was fired when he made a comment regarding transgender bathrooms. The network said it fired him because political statements weren’t permitted. Ha! Yet Jamele Hill calls the President a “white supremacist” and she is allowed to stay on the air.
It doesn’t matter what side of the political fence you are on. If you are a Disney shareholder, as I am, I want all of these people to just shut up and get on with sports.
The moment anyone makes any political statement, it immediately alienates 50% of the audience. That’s bad for business. If you think I’m wrong, ESPN’s own internal survey confirmed that ESPN has a liberal bias. Even an on-air anchor said that layoffs at the network earlier this year were the result of this bias. The problem is the both Disney’s CEO and ESPN’s President are liberals. That’s bad for shareholders.
DIS Stock Bottom Line
So what is a DIS stock shareholder to do?
For now, stay the course. Walt Disney stock derives a ton of revenues from its TV division, which includes ESPN. However, it has generations worth of revenue in the hundreds of billions, by exploiting all the IP from Marvel, Pixar, and LucasFilm.
ESPN needs to reorganize anyway, as far as how it delivers sports programming. It sounds like Disney’s new streaming product may alleviate some of these issues. However, Disney stock shareholders should be screaming at Iger to turn off the politics at ESPN, and turn back 100% to sports.
Lawrence Meyers is the CEO of PDL Capital, and manager of the forthcoming Liberty Portfolio stock newsletter. As of this writing, he has no position in any stock mentioned. He has 22 years’ experience in the stock market, and has written more than 1,600 articles on investing. Lawrence Meyers can be reached at TheLibertyPortfolio@gmail.com.
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