Disney Headlines for March 2nd, 2024
A former Disney CEO closes the book on a lucrative chapter, while his old company does the same.
We’re witnessing the death of physical media, with two different Disney-related outcomes telling the same story.
Eisner No Longer Topps


Photo Credit: Michael Eisner via Twitter @Michael_Eisner
One of my favorite quirky bits of trivia is that former Disney CEO Michael Eisner owns Topps.
Yes, I mean the trading card company that throws in a stick of gum when you purchase a pack of baseball cards.
Also, I should tighten my wording, as Eisner no longer owns Topps.


Photo: STRF/STAR MAX/IPx
In fact, as of this month, you could argue that Topps no longer exists.
Here’s a bit of backstory that also ties into a decision The Walt Disney Company just made.
Many years ago, activist investors forced Eisner to leave Disney.


Photo: OC Register
Some longtime analysts have even wondered whether Disney history is repeating itself.
After Eisner exited the company, he suddenly had plenty of free time and lots of money. Dude needed a hobby.
In 2007, roughly two years after Eisner’s Disney divorce, he read that an activist investor was trying to disrupt Topps.
Eisner’s group, The Tornante Company, and an investment fund, Madison Dearborn Partners, worked together to take over Topps.
That’s a Lot of Bubblegum Money!


Photo: skillastics.com
The groups spent $385 million to gain control over Topps and take the publicly traded company private.
That decision proved lucrative for all involved even though physical media is in its dying days.
Eisner had 17 years to enhance Topps as a business before he eventually cashed out.
In 2022, Eisner and his team sold Fanatics the rights to the former Topps trading card business for a cool $500 million.
Topps didn’t have much of a choice in that one, as Fanatics had gained the licensing rights for Major League Baseball.
Without the ability to print baseball cards, Topps faced an existential crisis, and Eisner chose to sell.


Photo: Jim Spellman/WireImage via Getty Images
The following year, Topps sold its associated candy division, Bazooka Candy Brands, for another $700 million.
Finally, Topps gave up its final valuable asset, TDS Gift Cards, to Ziff Davis.
Eisner gained another $170 million for this transaction.


Photo: Washington Post
So, the former Disney CEO turned a $385 million investment into three separate transactions totaling $1.37 billion.
Also, please note that this total doesn’t include all the profit Eisner’s group earned during 15+ years of ownership.
In other words, Michael Eisner remains really, really good at business.


Photo: Disney
More importantly, the executive recognizes a business trend that many people are unwilling to admit.
Physical media is fading in popularity. And that statement brings us to…
Disney Abandons Physical Media


Blockbuster
I’ve previously mentioned that I briefly worked at a Blockbuster.
What I’ve never discussed here is that I once owned a VHS and DVD collection that exceeded 5,000 titles.
The combination of a love of tech, the prevalence of recordable VHS tapes and DVDs, and hoarder tendencies can be problematic.


Creator: Rick Wilking
| Credit: REUTERS
Even now, I probably still own a few hundred DVDs and VHS tapes.
I’m not really sure because they’re sitting in boxes somewhere, and I probably won’t find them until that dreaded day when I clean the garage.
In short, I was Team Physical Media from the earliest days.


Photo: amazon
In fact, my first major purchase after getting a job was a VCR.
My first wife also lived out my dream when she got a job at a DVD manufacturing facility. That vastly increased our DVD supply.
As you’d expect, many of those DVDs and VHS tapes were Disney releases.


Photo: Marketrealist
I was one of millions of fans who loyally supported The Mouse whenever I could, which is what led to Disney’s boom period.
During the 1990s and early 2000s, Disney could do no wrong with physical media sales.
The always-brilliant Edward Jay Epstein wrote this piece in 2005. It explained just how lucrative licensing is for studios.


Photo: Ebay
That conversation matters even more today than it did 20 years ago.
In fact, I’ve written a piece about Disney’s insurmountable licensing lead that will probably go live this week.
The trick to owning intellectual properties is that they’re medium-averse.
As long as you own the content, you can release it on VHS tape, DVD, Blu-Ray, or…streaming.
You’re agnostic about the actual methodology.
The Great Disruption


Photo: Netflix
When Netflix established proof-of-concept on a streaming media service, it disrupted many revenue streams.
Why would anyone need a physical copy of every movie when you can load your favorites on your phone?
The rise of Netflix provided a killshot to DVDs and their successors, Blu-Rays.


Photo: Reuters/Brian Snyder
However, companies refused to stop selling this content because they were still making too much money from it.
If this situation sounds familiar, it should.
The same logic applies to linear television, whose struggles have absolutely torpedoed Warner Bros. Discovery stock.


Photo: measureupgroup.com
Some executives like David Zaslav don’t accept when businesses are dying and believe they can right the ship.
A family member in the newspaper industry worked with a similarly delusional person who believed that print media would recover. Spoiler: It didn’t.


Photo: Disney CEO Bob Iger (Getty Images)
Perhaps the same argument applies to Bob Iger, who recently indicated Disney isn’t selling its Linear Networks division.
Iger might be thinking in old-school ways as well, although I give him the benefit of the doubt since he’s typically forward-thinking.
The End of the Road


Photo: English Jargon
The point is that The Buggles once sang (poorly) that video killed the radio star. Now, digital media has done the same to physical media.
For Disney, that change has cost billions of dollars over the years.
Still, the company remained committed to physical media…until the pandemic.


Photo: WHO
Now, the writing is on the wall, and MickeyBlog recently had the displeasure of reporting on the death knell of physical media.
Disney has closed shop on the Disney Movie Club, which breaks my heart as someone who subscribed to Columbia House more than 50 times. No joke!
Disney has shut down the club because it no longer vertically integrates its physical media sales.
From now on, Sony will handle distribution of what little remains of Disney’s former physical media empire.
Without officially saying anything, Disney has bailed on physical media in its entirety.
In the process, Iger has made the same business decision that his predecessor and mentor, Michael Eisner had with Topps.
Both individuals reached the same conclusion independent of one another.
Physical media will never approach the requisite levels of mass consumption needed to sustain the industry.
Newspapers, magazines, DVDs/Blu-Rays, and even baseball cards fall into the same category.
Businesses used to make hard copies. Now, they can produce the same content digitally for a fraction of the price.
That’s why Eisner and Disney both just cashed out.


Credit: Disney
All we have left are the memories and, if you’re anything like me, storage boxes full of outdated media.
I can’t really blame anybody, though. Nobody converted to digital faster than me.
I once owned the largest Amazon Instant Video library in the world according to an Amazon executive!
If a packrat hoarder like me would readily switch to digital, physical media’s days were numbered.


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Feature Photo: Jim Spellman/WireImage via Getty Images