Market cap

* For banks, enterprise value is substituted with market cap. Source: Bloomberg Finance L.P.

Performance of the brand

Disney is one of the world’s best known brands. Disney’s films and television programmes have formed a key part of the childhood of almost all western children for over 50 years. Mickey Mouse, upon whose ears many of the group’s logos are based, is one of the most recognisable characters of all time and resorts such as Disneyworld in Orlando have become the El Dorado or Shangri-la of childhood dreams.

Disney continues to shape the media landscape, particularly for children, through its television and music production, but for older generations too, via film production and ownership of other networks such as ABC and ESPN.

Disney has had mixed fortunes in the recent past with many successful film releases, notably ‘The Help’, and continues to launch the careers of hugely successful US music acts such as the Jonas brothers and Miley Cyrus. Clearly investors have confidence in the brand and its leadership, based on historically low corporate bond rates to be paid on recently announced 30-year bonds, the first the company has issued in a decade.

Disney will however be forced to tackle recent difficulties with its latest resort on the Hawaiian island of Oahu and, more pressingly, allegations of child labour at Chinese factories producing Disney merchandise. These would be serious for any company but are particularly grave for one whose key consumers are children. No doubt Disney will act swiftly to address concerns.

The Walt Disney Company was founded on 16 October, 1923, becoming publicly traded as Walt Disney Productions in 1938. It is now the largest media organisation in the world by revenue, operating across almost all traditional media formats, from film production and television to publishing and online media.

The company owns many brands besides Disney, including ABC, ESPN and various publishing, retail and merchandising divisions but is still best known for the output of the Walt Disney Motion Pictures Group, its film studio and its iconic ‘Mouse Ears’ logo.

It employs nearly 150,000 people and the president and CEO is Robert Iger.

 

Positive Aspects

On Wednesday 14 August, Disney sold its first 30-year bonds in nearly a decade. Most importantly it paid record low rates despite the frequent difficulties in generating finance in the current economic climate

The Financial Times has reported that “The amount of additional yield that investment-grade companies have to pay versus US Treasuries, known as the spread, on their bonds has risen in recent weeks. But that comes against a plunge in benchmark Treasury yields, keeping corporate borrowing costs low. Highly rated companies also are being judged as a relatively safe place to invest, notwithstanding these low rates.” Brand strength is a key component of investor confidence, highlighting Disney’s success, and the importance for other companies of tracking, maintaining and building their brand value.

Has enjoyed success in its film division recently with the Lion King 3D and the box-office topping ‘The Help’, and adaptation of the bestselling novel by Kathryn Stockett

 

Negative Aspects

Disney has suspended sales and sacked senior staff  at its latest resort venture, an $850m Hawaiian mini-theme park

Disney is spending an estimated US$850m on the Aulani resort and spa on the island of Oahu. However a review of costs is underway and sales of timeshares have been halted as it is thought that unless fees are raised, the resort is set for major losses. Initial estimates understated the costs, which it is now thought will outstrip the fees from Disney Vacation Club members, who will no doubt be as frustrated as Disney’s senior management.

The Guardian has reported that the Chinese factories producing Disney’s ‘Cars’ toys, employ workers as young as 14 and operate enforced overtime

A report by Chinese human rights activists alleges that workers were forced to work overtime for three times the legal maximum and that one worker had resorted to suicide following harassment from bosses. Some had also voiced concerns over exposure to harmful chemicals.

The factory, called Sturdy Products makes the ‘Cars’ toys for Mattell, which announced quarterly profits of £48m based on strong sales of Barbie and Cars toys. The factory supplies many other western companies, including Wal-mart. Disney has launched an investigation.

 

 

Last changed September 5, 2011

League tables

Walt Disney appears in the following brand league tables:

Rank 50 in the Global 500 2012.
Rank 47 in the Global 500 2011.
Rank 47 in the Global 500 2011.
Rank 19 in the Global 500 2010.
Rank 18 in the Global 500 2009.
Rank 28 in the Global 500 2008.
Rank 21 in the Global 250 2007.