Entertainment company Walt Disney Co. (DIS) is planning to layoff 75 people from its ABC News operations, as well as from local television stations, as its linear TV business continues to decline.
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New reports from Variety say that Disney is looking to cut staff as it feels the pinch from rising costs, and as households move away from cable television in favor or streaming services. The job cuts will be split evenly between the national and the local TV markets.
These latest job cuts follow a previous round of layoffs in September, when Disney took out about 300 jobs from its various corporate departments. Also, Disney merged some teams that handled scripted comedy and drama at ABC and the Hulu streaming service into a smaller number of teams overall.
A Legal Drama Brewing
DirecTV’s recent move to consolidate with EchoStar (SATS) may be in the works, but DirecTV is also trying to keep itself running while that goes on. And Disney is a part of that. Disney recently petitioned a court to dismiss a complaint against it filed by DirecTV. DirecTV alleged that Disney was negotiating in bad faith during recent carriage negotiations.
Disney was insisting on bundling, a practice that has been common to pay-tv operations for years. But DirecTV insisted that bundling was “…bad for consumers,” as well as unlawful and anticompetitive. True, but where were these objections years ago? However, given that the latest bundling issues were connected to Venu Sports, the coalition streaming effort that was recently shutdown by courts, the allegations may have a little more life to them now.
Is Disney a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DIS stock based on 17 Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 18.78% rally in its share price over the past year, the average DIS price target of $115.75 per share implies 23.47% upside potential.
