Why Disney Passed on Buying Twitter

Mickey Mouse (Paul Hiffmeyer / Disney / Getty)
Paul Hiffmeyer / Disney / Getty

Although Disney seemed like the perfect suitor for Twitter, the company passed on the strategic acquisition over concerns that social media’s bullying, raunchy language and hate speech risked undermining the Magic Kingdom’s wholesome family image.

Walt Disney Co. (DIS:NYSE) Chief Executive Officer Bob Iger recruited Twitter co-founder and CEO Jack Dorsey to the Disney board in 2013. It is known that Dorsey considers Iger a mentor and that Disney has prioritized upgrading the digital reach of their family of media brands.

At a Boston College symposium in early October, Iger emphasized how critical it is for all the Disney ESPN and ABC brands to establish a direct connection to consumers on mobile devices.

It was reported in mid-September by Bloomberg and the Wall Street Journal that Disney had hired JPMorgan Chase & Co. and Guggenheim Partners LLC as investment bankers and were entertaining presentations from Twitter executives in anticipation of making a bid.

Twitter, using ESPN technology, had already begun this fall to live-stream NFL’s Thursday Night Football and subsequently released an app for TV so viewers could follow along if they had Apple TV or Xbox. The app also allowed for live-streaming of this year’s presidential debates.

Spark Capital partner Nabeel Hyatt told Business Insider that Disney would be a better fit for Twitter than other potential bidders that have expressed interest, including Salesforce and Google. Hyatt argued, “Twitter is and has always been a media company, and everyone who thought of them as a messenger company got it wrong.”

Hyatt emphasized that Disney had already moved from being a film or theme park operator to predominantly a conglomerate of media entities, including ABC and ESPN broadcast properties. Given the existential risk to traditional media formats from millennial cord-cutters, Hyatt believed that Disney and Twitter were the right strategic fit at the right time.

Twitter had been weathering harsh criticism for years for its hands-off approach to digital abuse and harassment on its service. Racist, sexist and antisemitic Internet “trolls” have always thrived on the Twitter platform, since users do not have to disclose their real name.

But after Twitter dumped CEO Dick Costolo in June of 2015, the company revised its “Abusive Behavior Policy” to let users block keywords. Twitter also began selective suspending conservative thought leaders, like Breitbart’s Milo Yiannopoulos, who was in a Twitter rage war with Leslie Jones, an actress in the movie Ghostbusters.

Although Disney believed it was poised to create immediate monetization opportunities from a Twitter, Inc. acquisition, the producer of G-rated family entertainment like Dora the Explorer and the Mickey Mouse Club decided that the blowback from bullying and hate speech on Twitter would probably undermine its iconic brand image, according to Bloomberg.

Twitter was a social media pioneer with the creation of the 140-character tweet. Despite still having a $12 billion market capitalization, down from $50 billion two years ago, the company has never been profitable. With all the strategic bidders dropping out, there is not an obvious path for Twitter to become profitable, without being in-house with a highly-profitable partner like Disney.



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