“With every success the company has had since Steve [Jobs]’s death, there’s always a moment in the midst of my excitement when I think, I wish Steve could be here for this. It’s impossible not to have the conversation with him in my head that I wish I could be having in real life. More than that, I believe that if Steve were still alive, we would have combined our companies, or at least discussed the possibility very seriously.”
Those words were written by Disney’s once-and-future CEO Bob Iger in his 2019 memoir, The Ride of a Lifetime. A reflection on Iger’s once-unthinkable proposal to rebuild Disney’s then-burned bridge to Pixar by purchasing the still-young animation studio outright, Iger discusses his deep friendship with Apple / Pixar founder Steve Jobs, how much Disney learned from Pixar, and – most importantly – how, to Iger’s thinking – Disney and Apple might’ve merged if Steve Jobs hadn’t passed away from cancer in 2011.
When The Ride of a Lifetime was published, the thought sounded absolutely impossible. But in 2022, entertainment industry insiders are beginning to churn anew with the idea that one day, Disney·Apple might not be a fever dream after all, but a serious potential path forward… Don’t believe us? Today we’ll look at a few reasons that industry experts say it’s possible… and a few reasons why others say, “no way.” (Please note that nothing in this article is investment advice.)
THE CASE FOR “DISNEY·APPLE”
1. Disney’s a big fish… but in a small pond
At press time, The Walt Disney Company had a market capitalization of $160 billion – a measure of the value of all stock, representing Wall Street’s determined “worth” of the company and its assets. Even though it’s less than half what Disney was valued at at its peak in March 2021 (over $350 billion), and even though that values the entire Walt Disney Company slightly lower than Netflix (with a $179 billion valuation), $160 billion is still a whole lot of money. There’s no question that Disney is the reigning king of entertainment companies.
But “entertainment” is a pretty small pond compared to “tech,” meaning Disney is a very small fish financially compared to Apple – whose current market cap is $2.78 trillion. That’s $2,780,000,000,000; ten Bill Gates, 13 Disneys, or 1,645 Kim Kardashians. Apple has famously faced a major cash problem, but it’s a very different problem than you and I face: basically, Apple has too much cash. In 2022, Apple reportedly had $202.6 billion in cash and investments, which the company promised to start investing or hanging out to shareholders. In effect, Apple could buy Disney without even taking out a loan.
Of course, many industry insiders suggest that if Disney and Apple were to “merge,” what it would really look like is Apple buying a controlling stock in Disney, effectively overtaking the Mouse House’s governance without officially buying out or acquiring it. This situation would be something of a “hostile takeover” without the hostility, given that any stock buy of that size would be orchestrated between Disney and Apple – something Iger and Apple’s CEO Tim Cook would need to carefully manage with their respective Boards, creating a very new, very unique financial relationship.
And speaking of the bigness of tech versus entertainment, let’s remember…
2. We live in the era of acquisition
Anyone who’s followed the entertainment industry at all in the last decade will tell you that we are living in the midst of the “Content Wars.” Hundreds of billions of dollars have been exchanged in the last few years, all the name of bolstering the intellectual property portfolios of increasingly-massive entertainment companies. (Iger’s acquisitions of Pixar, Marvel, and Lucasfilm in 2007, 2009, and 2012 respectively are seen today as almost-prophetic, industry-changing moves that set the pace for today’s entertainment industry.)
But if you’re still focused on Disney owning Pixar, or Universal owning DreamWorks, you’re thinking too small. Consider the “Big Six” movie studios that defined entertainment for the last century… Nearly all have been folded into the “Content” collections of massive multinationals.
The already-enormous combination of NBC and Universal (called, of course, NBCUniversal) was acquired by cable and internet giant Comcast; Paramount is just one asset within the mega-merger of ViacomCBS; MGM was purchased in full by Amazon; Warner Bros. belonged for a time to telecommunications giant AT&T before being sold to Discovery Inc., reformed into Warner Bros. Discovery; and 20th Century Fox is no more, absorbed into Disney by way of a $72 billion buy-out in 2019.
Disney is one-of-a-kind in the entertainment industry in that it has never been a subsidiary of a larger corporation. But frankly, it’s rare for an entertainment company to be standalone venture. If any entertainment company could press forward as its own, independent multinational, then surely it’s Disney with its very diverse portfolio of businesses…
But it’s also worth recognizing that Disney’s name, studios, partners, and brand make for a very appealing package that only a tech company could afford. And of them, only Apple really makes the most sense. Why? We’ll dive into that on the next page.
3. Disney and Apple have more in common than you might think
Apple is a company whose name conjures images of sleek technologies, upscale retail stores, a clean and classy operating ecosystem, and highly efficient supply chains. Disney, meanwhile, is an almost unwieldy, multi-faceted entertainment company with countless arms wrapped up in licensing, retail, film production, animation, theme parks, hotels, environmentalism, animal care, streaming, publishing, and a whole lot more. A fundamental question might be – why would anyone picture these two combining their efforts? What’s to gain from it?
But fundamentally, one could argue that Apple and Disney really do have some very core philosophies in common.
- Both are enormously admired, globally recognized, and deeply resonant, recognizable brands. People could name a hundred things that are “Disney” without skipping a beat; could they name a hundred things that are “Paramount” or “Warner Bros.”? Likewise, Apple’s brand is absolutely, perfectly fine-tuned and exact, with instantaneous recognition and exceedingly clear, global associations.
- Both have built immense empires on brand loyalty and lifestyle. People proudly boast on Twitter bios, bumper stickers, and dating sites that they’re broadly and blatantly “Disney fans.” Does anyone identity as an “NBCUniversal fan”? Likewise, Apple’s brand loyalty is off-the-charts. Companies would kill to have the kind of “walled garden” ecosystem that Apple does, earning total allegiance from users.
- Both are businesses centered on experience. Even if they don’t always practice what they preach, Disney is regarded as the industry leader in guest service and experiential entertainment; something that clearly factors into Apple, whose retail experiences and inter-device ecosystem are the envy of the industry.
So even though, sure, Apple and Disney are enormously different companies with different areas of expertise, it’s not like their combination would be antithetical to either’s core beliefs. This is a pairing that fundamentally makes sense in some ways, where both companies would have something to learn from each other. It’s impossible not to imagine Apple’s expertise in apps, design, retail, and technology being vital to Disney across its guest experience, streaming, and parks, while Disney’s portfolio of content would be a jaw-dropping, industry-altering, gravitational acquisition for Apple.
By any metric, Disney is the gold standard for guest services, theme parks, animation, film studios, and much more. Likewise, every upstart retailer or tech company wants to be “the next Apple” or “like the Apple Store.” Despite being behemoths, both of these companies are disruptors and gold standards. That’s a very powerful position to own.
4. It solves Iger’s succession issue and cements his legacy forever
Every leader of Disney has been transformative in his own way, but one could certainly argue that none since Walt himself have left their mark on the company like Bob Iger. An absolute Hollywood powerhouse, Iger is both strategic and charismatic; a leader who respects Disney’s history while forging its future; someone who tends to favor creative ambition and risk over “the way its always been done”; an affable, likable, admired, well-spoken, smart, and very, very lucky CEO. In other words, he’s a very tough act to follow.
Believe it or not, Iger was initially meant to retire in 2014, and even had two likely successors picked out and cross-trained for the job. But in 2013 – hot off the heels of the acquisition of Lucasfilm – Disney extended his contract for an additional 15 months, moving his retirement date to 2016. Along the way, both of Iger’s apparent would-be successors left the company. As a result, Iger’s contract was extended again to 2018 with a focused effort to find and mentor a successor. Apparently, it didn’t work, because soon thereafter, Disney announced that Iger would stay on through 2019.
When the opportunity to purchase 20th Century Fox arose, Iger no doubt saw a legacy acquisition to trump Pixar, Marvel, and Star Wars, leaping at the opportunity (to the tune of $72 billion). As a result, the Board extended his contract to 2021, giving Iger time to integrate 20th Century’s assets and to choose, mentor, and empower a successor.
Obviously, COVID-19 changed the plan, with Iger resigning (effective immediately) and handing the CEO role to the Parks, Experiences, and Products Chairman, Bob Chapek. In a move any Disney Parks fan would’ve seen coming, that didn’t stick. (So much so that many suspect Iger purposefully positioned the unlikable Chapek as a “fall guy” to take the brunt of the pandemic’s effects, always planning to return triumphant…)
Iger’s surprise return in November 2022, he said, was very conditional. Both he, his wife, and Board agreed only to a two year term, during which he would find a successor by his final retirement in 2024. But, predictably, a year into Iger’s return, Disney announced that they’d convinced the leader to stay until 2026. If he retires then, he’ll be 75.
Clearly, despite actively searching for at least a decade, no one has yet fulfilled Iger’s and Board’s requirements for a successor… And worse, we’ve seen via Chapek just how long Iger’s shadow stretches, and how impossible it might be to be viewed as a successful leader in his industry-reshaping wake. That’s enough to cause some to consider whether Iger and the Board might decide that no one needs to succeed Iger. Instead, perhaps the beloved leader could cement his legacy by being the last CEO of the Walt Disney Company; the brilliant and beloved leader who successfully brokered an ultra-successful, industry-changing, and legacy-setting merger with Apple.
5. Iger seems to be slimming down the company for a potential sale
Bob Iger famously positioned himself and Disney as a growth-mindset company – a leader in the era of acquisitions, whose bold, unexpected, high-risk, negotiated purchases were transformative in establishing the company’s 21st century form. Now, he appears ready to reverse that momentum in some key ways.
In July 2023, Iger – a man who very rarely departs from approved, carefully-considered remarks – mentioned offhand that terrestrial TV assets (think, ABC, FX, ESPN, Freeform) “may not be core” to Disney’s business and that Disney needed to be “expansive” in its thinking about what to do with them. That statement naturally sent both industry examiners and Disney television staff spiraling with what it could mean if Disney were to part with ABC, spinning it off or selling it off to a competitor.
Likewise, Disney seems to be getting cold feet about its contractual option to buy Comcast’s remaining stock in Hulu – something that the company bullishly sought before recently encountering the very real possibly that streaming may not ever be a revenue-generating endeavor, and that Disney may spend the rest of its existence cutting costs and maximizing park profits to keep streaming alive.
Though unspoken, some have taken Iger’s reversal into slimming down Disney’s holdings as a preemptive move. If Apple and Disney were to “merge,” the slimmed down company might be more likely to past anti-trust regulators, ensuring that the new, combined, super-sized conglomerate can pass legal muster. Frankly, that hurdle seems to be the most likely reason that a Disney / Apple merger would not happen. Which brings us to the case AGAINST “Disney·Apple,” which we’ll explore on the next page…
THE CASE AGAINST “DISNEY·APPLE”
1. It would be huge. Maybe, too huge.
In the United States, the Federal Trade Commission and the U.S. Department of Justice are tasked with ensuring that the “free market” doesn’t extend so far that monopolies can form. Many experts on antitrust regulations suggest that the government would block a sale of Disney to Apple on the grounds that both are major players in their respective industries, and that the resulting mega-company would simply have too much power.
As the often-shared and almost comedic graphic above suggests, Disney alone is really less like one large company and more like two dozen medium-large companies all entangled and intertwined. It’s already a behemoth. So to nest it under an umbrella corporation alongside Apple – a massive corporation in its own right – would create a gargantuan mega-conglomerate so unwieldy, it’s incredibly unlikely that one executive team or Board could ever reasonably be expected to oversee it.
And as we mentioned on the last page, that’s if federal regulation would even allow the two to merge. In practice, it’s likely that both would need to sell off certain assets to make it happen. (For example, antitrust regulators may suggest that combining Apple’s “walled garden” of apps with Disney’s media assets would unfairly eliminate competition by defaulting to newsfeeds or advertisements for Disney-owned news sources, giving ABC an unfair advantage.) Whether Disney or Apple would even want to make the slimming-down moves needed to appease regulators is separate from the question of if they could.
2. Apple might not be interested
While Iger can speculate in his book that he and Jobs might’ve eventually come to agree on a merger, he doesn’t suggest that either party ever said a word about it. And of course, Jobs himself isn’t around to comment.
So for all the frenzy that the idea might earn, and for all that Apple could technically afford to buy Disney if it wanted to, the truth is that Apple might not be interested in acquiring this very big, very beloved, but very messy company with dozens and dozens of business segments – most of which are entirely foreign to the streamlined, retail-oriented, and tech/design-focused Apple.
Of particular debate is the theme park division. Though incredibly profitable and certainly a jewel in Disney’s crown, many fans online have wondered aloud why on Earth Apple would want to get involved in the operations of theme parks? Fans have already spun up possible alternatives; perhaps “Disney Parks & Resorts” could be spun-off into an independent company to own and operate the properties, merely licensing Disney’s brands and characters from the new company. Of course, that’s just fan fiction – a hypothetical of a hypothetical of a hypothetical.
And in the unlikely even that Disney and Apple did merge, it’s equally likely that Apple would take to the parks like Comcast (a wholly unexpected owner for Universal Parks & Resorts) did for Universal Orlando. But it does go to show that for any number of reasons, it’s entirely possible that Apple has no interest in owning Disney, making this all a moot point.
3. Iger might be too proud
While some suggest that selling Disney to Apple would be a legacy-leaver for Iger, others have a very different opinion: that by “selling” Disney (even if it’s framed as a successful, even-sided “merger”), Iger would instead come across as a leader who couldn’t keep the company independent.
To that line of thinking, selling Disney to Apple is something of a failure; a staggering end to the company’s century-long history that would read like Iger is folding. And suddenly, just like “NBCUniversal: A Comcast Company” or “Paramount Pictures: A Division of ViacomCBS,” Disney would just be another company whose destiny isn’t really its own, entering into the world of corporate consolidation, spin-offs, segmenting, and what might be a century of being bought and sold between parent companies. And Iger – to whom legacy seems incredibly important – would be the start of it; the man who sold Disney.
No matter how much Disney might benefit from joining Apple or how much the move were spun as a win-win, cementing Disney within a larger ecosystem while it’s at the top of its game, the message would always be that Bob Iger sold the company. And that might not be a narrative he wants to touch with a ten foot pole…
Will they or won’t they?
So… will they or won’t they? This is Jim and Pam in the middle of season two of The Office, folks. Anything seems possible. The prospect of Disney and Apple combining forces is, for fans of either company, at once terrifying and dazzling; fascinating tabloid fodder for entertainment journalism; and weirdest of all, possible.
But is it likely? Right now, no one but Disney and Apple’s leadership know. Have discussions happened? Will they? Or are each company’s respective C-Suite executives baffled by the Internet’s obsession with the Internet’s imagined romance between these two immortal companies? We’ll keep our ear to the ground. In the meantime, what do you think the future holds for Disney and Apple? And will that future be together – either through a stock swap, a buy-out, or a balanced merger?
