Walt Disney Co (NYSE:DIS) has a lot of irons in the fire at the moment, but things could be a lot simpler if the company zeroed in on a specific target. That’s the gist of a recent discussion on the MarketFoolery podcast, which pointed to an intriguing option for the House of Mouse to explore.
Motley Fool passes along a suggestion from Matt Argersinger about what Disney should really do.
But I have to say, I actually think this new Comcast bid for 21st Century Fox, if that eventually gets approved and they outbid Disney, that actually might work out for Disney. I think this deal is going after some legacy assets, some legacy entertainment properties. I think what Disney should do is scrap the deal, go get Hulu. I think Hulu, long-term, is the prize in this acquisition. They already have a minority stake. The Fox deal would give them a majority stake. But, I feel like that’s the potential over-the-top direct-to-consumer platform that Disney’s been lacking. And I don’t know why they’re not seeing that — at least, it doesn’t seem like Bob Iger sees that. He sees, “Well, we have the ESPN app, next year we’re going to have the Disney app.” But I feel like Hulu could be that place. It’s already very popular as a competitor to Netflix and Amazon. Why not make that your destination for all future Disney content? So, I would do that, and I would buy back a heck of a lot more stock, and I think investors should do fine.
Disney and Comcast appear destined to do battle over the Fox assets that are up for sale, and the winner will likely wind up with a hefty stake in Hulu as it is. As Argersinger sees it, there’s a need for a simple destination in the growing world of streaming choices, and a Disney-controlled Hulu would immediately become even more of a top destination.
“I just feel like it has to be simplified. It has to be a platform that has a lot of things on it. And right now, Hulu is becoming that,” he added.
Walt Disney Co shares were trading at $103.83 per share on Wednesday morning, up $0.91 (+0.88%). Year-to-date, DIS has declined -3.42%, versus a 2.11% rise in the benchmark S&P 500 index during the same period.