U.S. Media: 2Q26 Media Preview: M&A everywhere, conviction nowhere

Research evidence excerpt

U.S. Media: 2Q26 Media Preview: M&A everywhere, conviction nowhere

Barclays | U.S. Media

assets left for Disney to buy, but in our opinion, M&A objective in Disney also has to be different

vs the past given that theme parks are now >50% of operating income and streaming is the

future growth driver. The company’s content slate has also suffered partly from execution

challenges, but arguably also because of franchise fatigue given over a decade of content

homogeneity. This is one of the main reasons the company’s flywheel has been gummed up of

late, in our opinion. This is why we believe Disney management’s focus has to return back to its

core of expanding its franchise base. This will need the company to look beyond traditional

media assets and potentially buy into say toy, video gaming or other franchises that can be

scaled faster under the Disney umbrella. Disney’s track record in video gaming historically has

of course been terrible, but this is because Disney tried to build new gaming capabilities around

existing IP, which needs a very different organization. In our opinion, what needs to be a bigger

focus is the opposite, i.e. to take non-traditional IP including video gaming IP to monetize it via

Disney’s traditional strengths in theme parks, movies etc. To us, the fact that Barbie, Harry

Potter, Lego, Mario and other similar franchises have been monetized by studios other than

Disney appears to be a huge miss. Some of this was likely because of more favorable economics

and control of owned IP monetization. However, this also needs the company to expand its M&A

vision beyond the immediate opportunities and look a bit further out.

Streaming tiering shifts

With both Netflix and Disney apparently looking at launching new free tiers to their service, the