Wells Fargo’s Steven Cahall believes the Disney Grooming Syndicate’s streaming service is why Disney’s stock price is a disaster.
As of today, Disney’s stock price sits at $96 per share, which is down 24 percent year-over-year and down 46 percent over the last five years.
Cahall believes Disney would see a 40 percent jump in its stock price if it became what’s known in the entertainment industry as an arms deal as opposed to a distributor.
An arms dealer produces entertainment content and then licenses it out to distributors like Netflix, Apple TV, etc.
Right now, Disney hoards all of its content to distribute it exclusively to Disney+. The problem with this is that the streaming business appears to have hit a growth wall. As of the last quarter of 2025, Disney+ had 132 million worldwide subscribers and hopes to see an increase of 138 million by the end of the year.
Ah, but at the end of 2024, Disney+ had 154 million subscribers, which was down from 164 million the year prior.
See the problem? Disney has all this potentially lucrative content that it dumps into a property (Disney+) that’s losing value.
But if Disney licensed out this content for billions and billions of dollars instead, that would be revenue growth and juice the stock price.
Let me put it this way…
If you’re a Disney stockholder and you see Toy Story 5 grossing over $1 billion at the global box office, knowing that from there it will be plopped into the dead zone of Disney+ instead of licensed to Netflix for $100 million, then to TBS for $25 million, then to PlutoTV for $10 million, you have to wonder why. Why make no extra money on Toy Story 5 when you can make another $135 million — which is what Cahall is asking…
If Sony (which is an arms dealer without a streaming service) get “$1 billion annually from Netflix for its pay-1 movie output deal, Disney could be in line for nearly $4 billion,” Cahall points out. “When pay-2 and Disney’s unmatched library is factored in, licensing revenues could hit $15 billion.”
“We don’t think the box office, Experiences [theme parks], or brand value would suffer if the library were on a competing global streamer,” adds Cahall. “Investors would benefit from a de-risked biz model w/ DIS focused purely on content vs. distribution. Josh D’Amaro may be considering all options.”
Right now, Disney is wasting billions and billions of dollars producing (lousy) content for a streaming service that is not growing, and losing billions by not licensing out that content.
Make it make sense.
Read the full article here
