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Why Disney is so much more than Mickey Mouse now

Skip Bayless is dead wrong about Disney.

The sports television host left ESPN this year amidst an exodus of expensive talent (see above video from May), and he joined Fox Sports 1, the same move former ESPN on-air talents Colin Cowherd and Jason Whitlock have made. In a new interview this week with the LA Times, Bayless discussed the move and suggested that he felt constricted at ESPN, which, if you ever watched his show “First Take,” is hard to believe.

Here’s how Bayless explained the difference between ESPN’s parent company Disney (DIS) and his new company Fox Sports (FOX): “Disney is Mickey and Minnie. Fox is The Simpsons, Family Guy. A different culture.”

It’s quite a punchy sound bite. The LA Times knew it—the paper made it a large, bold pull-quote in the middle of the article. But it is an ill-informed characterization of Disney as a company.

It’s been a long time since Disney was carried by Mickey and Minnie.

Disney’s roster of bankable franchises has ballooned

Disney’s universe now includes the Marvel superhero universe, after it bought Marvel Entertainment in 2009 for $4 billion. Disney has the Star Wars mega-franchise and all the characters and stories therein, after it bought Lucasfilm for $4 billion in 2012. Disney has Pixar, which it bought in 2006 for $7.4 billion and which has never made a Mickey Mouse movie.

Disney is ABC (which it owns), and ESPN (a joint venture with Hearst), and A&E Network (joint venture with Hearst). Disney is Hulu (Disney got a 30% stake in 2009) and MLBAM Tech, in which it wisely grabbed a 33% piece this month for $1 billion (see below video).

Some of Disney’s most successful animated franchises have been “Toy Story” and “Frozen,” which are aimed at kids, but appeal to adults too.

Disney parks & resorts make up just 20% of Disney’s profit

But forget the anecdotal list of franchises: The company’s financials also prove Bayless wrong.

Look at the table below, from Disney’s 2015 10-K form. It shows that media networks (the division that houses ABC, ESPN, A&E, and stakes in Hulu and Vice) accounted for more than half of Disney’s operating income, $7.8 billion of $14.7 billion for 2015.

Revenue and income of Walt Disney Co. operating divisions, 2015

Parks & resorts, the division that one can fairly equate with Mickey and Minnie, is the second-largest chunk, with $3 billion of Disney’s 2015 operating income, or 20%. But the other three divisions that Disney breaks out—studio entertainment (films), consumer products (merchandise), and interactive (digital)—combine to account for more income than parks & resorts.

The consumer products division certainly includes a lot of Mickey Mouse gear from Disney theme parks, but it also now includes Star Wars merchandise, which is likely the reason the division rose to $4.5 billion in revenue in fiscal 2015, the year “Star Wars: The Force Awakens” came (Disney does not break out its merchandise sales by franchise.) And both media networks and consumer products grew more in 2015 by revenue (10% and 13%) than parks & resorts (7%) did. Consumer products, by both revenue and operating income, grew more in 2015 than any other division did, thanks to Star Wars, not Mickey.

Disney owns businesses that are far from kid-friendly

To be sure, Bayless fans (and ESPN critics) will retort that he obviously wasn’t equating Disney’s business with Mickey, but making a general point about its family-friendly image and culture. The problem is: that isn’t quite true anymore either. While “Mouse House” remains a popular nickname for Disney, and while Mickey’s ears blanket all Disney parks, the average young person these days likely first connects Disney to “Star Wars,” or “Frozen,” or “Finding Nemo.”

In five recent bank analyst notes about Disney, Mickey isn’t mentioned one. In a note on Disney’s recent third-quarter earnings, FBR Capital Markets praised Disney’s “astonishing movie streak” (mentioning “Star Wars,” “The Avengers,” and “Finding Dory”) and said, “We applaud [the stake in] MLBAM.” Now that Disney has a 33% share of BAM Tech, it has an interest in the success of enterprises as diverse (and adult) as WWE, Glenn Beck’s web network TheBlaze, and HBO Now.

Because Disney owns Marvel, it is also home to violent, superhero action franchises like “The Avengers.” And Disney doubled its stake last year in Vice Media, a company known for edgy, profane programming like “Balls Deep” and “F*ck That’s Delicious.” In such shows, Mickey Mouse is nowhere to be found.

Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology. Follow him on Twitter at @readDanwrite. Sportsbook is his recurring sports business video series.

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