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Walt Disney Finance

To entertain, inform and inspire people through financial excellence that maximizes long-term shareholder value and supports the Disney magic

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To entertain, inform and inspire people through financial excellence that maximizes long-term shareholder value and supports the Disney magic

Strengths

  • BRANDS: Unparalleled portfolio of globally recognized IP assets
  • DIVERSIFICATION: Multiple revenue streams across entertainment segments
  • STREAMING: Strong Disney+ growth with 149.6M subscribers
  • PARKS: High margin parks & experiences business with pricing power
  • TALENT: Exceptional creative and financial leadership team

Weaknesses

  • DEBT: High debt levels from Fox acquisition and pandemic impacts
  • COST: Elevated content creation and streaming infrastructure costs
  • LINEAR: Accelerating decline in traditional TV network business
  • FORECASTING: Inconsistent financial forecasting accuracy
  • COMPLEXITY: Complex financial structure across diverse business units

Opportunities

  • INTERNATIONAL: Significant global expansion potential in key markets
  • AI: Leverage AI for financial planning and content cost optimization
  • PRICING: Strategic pricing optimization across all business segments
  • SYNERGY: Enhanced cross-platform revenue synergies across portfolio
  • DTC: Direct-to-consumer business model expansion beyond streaming

Threats

  • COMPETITION: Intensifying streaming wars with Netflix, Amazon, Apple
  • CONSUMER: Economic headwinds affecting consumer discretionary spend
  • REGULATION: Increased global regulatory scrutiny on content/pricing
  • DISRUPTION: Accelerating technology shifts in content distribution
  • LABOR: Potential labor disputes affecting production costs/timelines

Key Priorities

  • STREAMING: Accelerate path to profitability for DTC business
  • EFFICIENCY: Implement aggressive cost optimization across portfolio
  • DIVERSIFICATION: Balance investment across high-margin segments
  • INNOVATION: Develop new financial models for evolving business units
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To entertain, inform and inspire people through financial excellence that maximizes long-term shareholder value and supports the Disney magic

PROFITABILITY SURGE

Accelerate DTC profitability through financial excellence

  • MARGIN: Increase Disney+ operating margin by 8 percentage points through content ROI optimization by EOQ
  • CHURN: Reduce subscriber acquisition cost by 12% while maintaining churn rate below 3.2% monthly
  • PRICING: Implement dynamic pricing strategy across tiers driving 15% ARPU increase with <2% subscriber impact
  • EFFICIENCY: Reduce streaming technology infrastructure costs by $85M through cloud optimization
COST MASTERY

Drive enterprise-wide cost optimization with precision

  • REDUCTION: Identify and execute $750M in additional cost savings beyond current $7.5B target by Q4 FY24
  • AUTOMATION: Implement 12 key finance process automations reducing manual effort by 25% and errors by 40%
  • ANALYTICS: Deploy AI-powered spend analytics platform across 85% of procurement categories saving $120M
  • RESTRUCTURE: Complete financial organization redesign reducing overhead by 15% while improving capability
PORTFOLIO BALANCE

Optimize investment across high-margin business segments

  • ALLOCATION: Implement new capital allocation framework prioritizing ROIC >15% across all business units
  • DIVERSIFICATION: Increase non-Parks operating income contribution by 8 percentage points by Q4 FY24
  • ANALYSIS: Complete portfolio review with specific profitability enhancement plans for bottom 3 segments
  • SYNERGY: Identify $250M in cross-segment revenue opportunities through financial data analysis
FUTURE FINANCE

Revolutionize financial models for evolving business units

  • AI TRANSFORMATION: Deploy 3 AI financial forecasting models improving accuracy by 22% across key metrics
  • INTEGRATION: Unify financial data architecture across 80% of business units enabling cross-segment insights
  • TALENT: Recruit and onboard 15 specialized AI finance professionals across key functional areas
  • METRICS: Launch new set of forward-looking financial KPIs for streaming business adopted by leadership
METRICS
  • Operating Income Growth: 15% for FY2024, 18% for FY2025
  • Free Cash Flow: $8.5B for FY2024
  • Combined Streaming Segment Operating Margin: 12% by Q4 FY2024
VALUES
  • Excellence & Quality
  • Integrity & Transparency
  • Strategic Innovation
  • Fiscal Responsibility
  • Collaborative Leadership
Walt Disney logo
Align the learnings

Walt Disney Finance Retrospective

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To entertain, inform and inspire people through financial excellence that maximizes long-term shareholder value and supports the Disney magic

What Went Well

  • STREAMING: Achieved combined streaming profitability ahead of schedule
  • PARKS: Exceptional performance with double-digit revenue & operating income
  • COST: Successfully executed $7.5B+ cost cutting initiative ahead of plan
  • GUIDANCE: Delivered on Q1 2024 EPS guidance reflecting financial discipline
  • INVESTMENT: Strategic capital allocation prioritizing high ROIC projects

Not So Well

  • LINEAR: Accelerated decline in linear TV network ad revenue and subscribers
  • CONTENT: Content production costs remain elevated despite reduction efforts
  • INTERNATIONAL: Disney+ core international subscriber growth below forecast
  • VOLATILITY: Significant quarter-to-quarter earnings volatility persists
  • DIVERSIFICATION: Over-reliance on Parks segment for operating income

Learnings

  • FOCUS: Concentrated investment in core franchises yields superior returns
  • INTEGRATION: Stronger financial integration between segments drives synergy
  • FLEXIBILITY: Financial agility critical during rapid business model shifts
  • DATA: Data-driven financial decision making correlates with performance
  • TRANSPARENCY: Enhanced investor communication improves market perception

Action Items

  • STREAMING: Accelerate streaming profitability through pricing optimization
  • MARGIN: Implement next phase of cost reduction targeting $2B+ in FY2024
  • FORECAST: Enhance financial forecasting accuracy through advanced analytics
  • CAPITAL: Optimize capital allocation framework to maximize shareholder value
  • METRICS: Develop more granular financial KPIs for streaming business unit
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To entertain, inform and inspire people through financial excellence that maximizes long-term shareholder value and supports the Disney magic

Strengths

  • DATA: Massive consumer data assets across entertainment ecosystem
  • SCALE: Enterprise scale to implement and benefit from AI systems
  • RESOURCES: Financial capacity to invest in cutting-edge AI solutions
  • TALENT: Growing AI expertise within finance and analytics teams
  • INFRASTRUCTURE: Robust technology infrastructure to support AI

Weaknesses

  • SILOS: Financial data fragmentation across business segments
  • LEGACY: Outdated financial systems in some business units
  • EXPERTISE: Limited specialized AI talent in finance organization
  • ADOPTION: Variable AI readiness across finance teams
  • GOVERNANCE: Underdeveloped AI governance frameworks for finance

Opportunities

  • FORECASTING: AI-enhanced financial forecasting and scenario planning
  • AUTOMATION: Streamline financial processes through AI automation
  • INSIGHTS: Leverage AI for deeper financial performance insights
  • PERSONALIZATION: AI-driven pricing and subscription optimization
  • RISK: Enhanced risk management through predictive AI capabilities

Threats

  • COMPETITION: Competitors advancing AI finance capabilities faster
  • TALENT: Fierce competition for specialized AI finance talent
  • SECURITY: AI-related data security and privacy concerns
  • SPEED: Rapidly evolving AI technology landscape requiring agility
  • REGULATION: Emerging AI regulations affecting financial operations

Key Priorities

  • TRANSFORMATION: Accelerate AI-driven finance transformation
  • TALENT: Invest in specialized AI finance talent acquisition
  • INTEGRATION: Unify financial data architecture for AI applications
  • INNOVATION: Develop AI use cases for financial optimization