"WAR OF THE WORLDS" WARNING: None of the facts stated in this article have yet come to pass, nor may they ever come to pass. All information contained herein is speculative, so rest assured that the Walt Disney Company and Comcast HAVE NOT merged as of yet.

You know, it’s tough to look at something you don’t want to look at. This article fits the bill for that, as I had to sit down and look at just what sort of organization of Comcast and Disney could work together. It wasn’t so much the idea of piecing their businesses together in a way that could work that was tough, but rather the idea of them being together in the first place. Here’s to hoping this bid doesn’t pan out…

Of course, being the planner I am, I had to do this sort of an article. In fact, planning for all outcomes is a smart thing to do. As one of my professors told us last year: "most if not all failures are due to failures in planning, NOT due to circumstances." With that in mind, I thought I should put together a plan for both companies to merge together with the greatest benefit, at the same time minimizing any shock that may come with such a move to a company deep in American history and culture and another company that reaches thousands of households.

To begin to merge the two companies, we must start with some key understandings that will guide everything we will do when combining the two companies. I’m going to call these the "Pillars of Merging", and they should supercede any plan or action in this process. Ready? Let’s go…

Pillar I. The Disney and Comcast brands will do better separated

Okay, this isn’t rocket science (apologies to any ballistics engineers out there). As I stated in the "What in the ‘World’…" series, it’s all about branding, and most of Disney’s are top of the line. Need an example? I’ll give you twenty off the top of my head: the Disney name, Mickey Mouse, Donald Duck, Pluto, Goofy, Minnie Mouse, Daisy Duck, the Princess lines, Buzz Lightyear, Toy Story, Monster’s Inc., Lion King, Little Mermaid, Beauty and the Beast, Snow White, Cinderella, Sleeping Beauty, Pirates of the Caribbean, Haunted Mansion, Muppets, etc. etc. etc!!!

When I say branding, it’s important to understand that I’m not talking about branding solely for retail purposes. When I refer to branding, I’m referring to a strong emotional tie with the characters, storyline, look, feel, quality, etc. of a service or physical good produced by the Walt Disney Company. To limit the idea of “brand” to only retail opportunities is the same as flying an SR-71 Blackbird aircraft under 75 MPH…it just isn’t right. The idea of "brand" means that since the Disney name is on something, you hold that product to a higher level than you would something else.

Even by renaming the combined company Disney-Comcast or Comcast-Disney (both of which I utterly shudder at), you are diluting the Disney brand. Just by including the "Comcast" in the name of the company subconsciously brings fear and pause when seen. America (and the world) has seen “Disney” on it’s own for too long, and it would be a bad move to hyphenate it…even if owned by that other company.

Pillar II. Even though they are the same company, Disney and Comcast assets don’t have to be seen as combined; nor do assets have to stay under their old parent company; Proper separation is a good thing

"Welcome to Walt Disney World, a Comcast resort" That’s the sort of thing we’re trying to avoid here. Assuming that the Walt Disney Company was a wholly-owned subsidiary of Comcast, there isn’t ANY reason to remind consumers of that fact. In this case, keep the resort under the Walt Disney Company banner, which itself would be owned by Comcast. Do you get your news from NBC? They’re owned by General Electric. Like Kraft products? They’re 85% owned by a company called Altria, which used to be the parent company called Phillip Morris. See what I mean? Just because a company owns a very well known brand, doesn’t mean they have to put their name on every product.

Pillar III. When in doubt, refer to Pillars I and II

Now that we have those out of the way, let’s get into the good stuff, shall we? Here’s my plan for a combined Disney and Comcast that could actually work. In this description lies the assumption that Comcast is adamant about retaining control of the merged company, and therefore would make the old Walt Disney Company a subsidiary of the new company. I decided to create my organization in chart form since, well, a picture is really worth a thousand words. Speaking of words, in the words of Peter Pan…Here…We..Goooooooo!!!!!!!!

As you look at the above organizational chart, you should be able to see right away the separation between the Comcast assets and the Disney assets. At the same time, however, those assets which are in the same category are together, like the ABC and cable channel assets for instance. In three instances, this caused traditionally Disney assets to be put under Comcast directly, namely ABC Family, Disney Channel, and Toon Disney. Since these are cable channels, I felt it would make sense to keep them with the rest of the cable channel assets managed by the Comcast Division. I would also like to point out quickly that I have created several assets that previously did not exist, such as Walt Disney Television Animation.

I’m sure you also saw the two independent assets, namely Pixar Animation Studios and Jim Henson Productions. As I stated in the "What in the 'World' is going on around here?" series, I felt that the Walt Disney Company should try and purchase both of them, but keep them autonomous to foster the same type of productivity they have enjoyed previously. This chart shows that acquisition, as well as shows the production that each could produce to various segments of the new company. I did not show any production going towards motion pictures, because I assumed for this example that each would produce under their own names.

In this type of organization, it is easy to see the split between assets. For the most part, under the Comcast side you have all of the distribution, cable and broadcasting assets. Under the Disney side, you mostly have all of the creative and production assets. At the same time, there is a definite split between the family-friendly Disney branded assets under the Disney division, and the rest under the Comcast Division. This split should reinforce the Disney and Comcast brands by not blurring the lines between them.

As said before, for this to work correctly (and at all), the three "pillars of merging" must be heeded, especially pillar number one. The idea that the Walt Disney Company could be a wholly owned subsidiary is a scary one, but if the average customer doesn’t realize that fact, then the brand (and quality of the product) is more likely to stay intact. There is no need for any product on the Walt Disney Division side (or any product on the Comcast Division side) to hint at the fact that Comcast is the parent company. The only association that should be made, if any, is that a lot of Disney production work shows up on ABC, ABC Family, Disney Channel, and Toon Disney.

The good news under this setup is that, of course, the Walt Disney assets stay separated from Comcast for the most part. As stated before, that’s not only to Disney’s benefit, but also to Comcast’s. As a separated division but under Comcast, that allows more capital to flow from the Comcast side than from the Disney side, taking the ever–growing pressure off of the creative folks to turn a profit as quick as possible. In this I mean that the major income from production work would come from advertising and content leasing of channels to other distributors, while the reason for that income generation would be the quality of the production work itself. While there is still profit assets in the Disney Division (such as parks and consumer products), this slight separation of production from distribution takes a little pressure off of people like hard-working Animators and Imagineers.

The company now being in multiple business lines, a lot more cash can be sent to the creative and production sides of the business at times when it wouldn’t have been possible before. Not only does this setup allow for the creative people to feel secure in their jobs, it also allows for expansive and ground-breaking projects to go forward to ensure continued market share and possibly gain some. A good example of this is SeaWorld Orlando and Anheuser-Busch. As I’m sure you know, SeaWorld (and Busch Gardens) are owned by Anheuser-Busch, which is the company that produces Budweiser beer and other alcoholic beverages. Here you have two distinct business lines, brewing and attractions. The increased level of revenues from the brewing side of business allows the company to pump money into attraction development, even when attraction revenues aren’t as high as they would like. A good example of this would be the price of a single day adult admission to SeaWorld ($53.95) and their “Silver Passport” for unlimited admission to SeaWorld for one adult for one year ($89.95). By comparison, a single day adult admission for a Walt Disney World theme park ($52.00) and a one year adult Annual Pass to Walt Disney World is vastly different ($369.00). It’s that ability to not rely so heavily on one business line for revenue that allows SeaWorld to charge so little in comparison to Walt Disney World. The Anheuser-Busch focus on their parks is more of a promotion, good citizen, and volume nature than a strict revenue generation nature. Under the above Comcast and Disney setup, the increased revenues from the media assets under the Comcast Division would hopefully allow the same to happen to the Disney Parks and Animation assets. While I doubt it will cause Annual Pass prices to fall, it may give us more attraction and animated bang for our buck.

With good news comes bad news, and of course there is some here. While this outlook is generally bright, there will probably be cuts such as in administration and other corporate-level functions. At the same time, you have a perceived threat of handing the Disney legacy over to another company, but if the new Board of Directors is an even split from both former companies, this shouldn’t be a problem. As has been said before, these companies are lucky in that the previous companies were in different businesses before the merger.

Well, I hope this organization of a newly merged Comcast and Disney would give you some hope that, if this event does take place, there is a chance that the Walt Disney Company can survive, and even come out better than expected. Now onto the not-so-nice side, where next week we will explore what could happen when “good companies merge bad.” It’s then that I’ll try and come up with the worst possible scenario in a merger situation between Comcast and Disney. Until then as always…

Thanks for stopping on by, and I’ll see you next week!