Met Announces Acquisition Deal With Disney

The Met released the following statement this morning to announce a new exclusive distribution and production deal with the Walt Disney Company.

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FOR IMMEDIATE RELEASE

DISNEY TO ACQUIRE THE METROPOLITAN OPERA COMPANY

Global leader in high-quality family entertainment agrees to exclusive distribution and production deal with world-renowned Metropolitan Opera Company, including legendary radio broadcasts and HD simulcast franchise.

Acquisition extends Disney’s strategic focus on creating and monetizing the world’s best branded content, innovative technology, and global growth to drive long-term shareholder value to the arts and culture sector.

The Met to join company’s global portfolio of world class brands including Disney, ESPN, Pixar, Marvel and ABC with exclusive distribution on Disney+ network.

Ongoing Met productions will be developed by Disney subsidiary, PIXAR Animation Studios.

Burbank, CA and New York, NY, April 1, 2021 – Continuing its strategy of delivering exceptional creative content to audiences around the world, The Walt Disney Company (NYSE: DIS) has agreed to acquire The Metropolitan Opera Company. The Met is a 501(c)3 and will initiate its dissolution clause in order to complete the transfer of all assets and content.

Under the terms of the agreement and based on the closing price of Disney stock on March 31, 2021, the transaction value is $2.05mm, with Disney paying approximately half of the consideration in cash. The final consideration will be subject to customary post-closing balance sheet adjustments.

“The Met reflects the extraordinary passion, vision, and storytelling of its General Manager, Peter Gelb,” said Robert A. Iger, Chairman and Chief Executive Officer of The Walt Disney Company. “This transaction combines a world-class portfolio of arts and culture content with Disney’s unique and unparalleled creativity across multiple platforms, businesses, and markets to generate sustained growth and drive reasonable long-term value.”

“For the past 15 years, one of my greatest pleasures has been to see the Met move away from an unsustainable business model driven in large part by labor costs,” said Peter Gelb, General Manager of the Metropolitan Opera. “It’s now time for me to complete that task by removing all existing labor costs and replacing their contributions with the digital magic from the creative minds at Disney and PIXAR. Disney’s reach and experience give The Met the opportunity to blaze new trails in opera products and breathe life into many of my artistic visions otherwise out of reach in the old model.”

Under the deal, Disney will acquire ownership of all Metropolitan Opera assets, a leader in opera innovation and technology, including its massively popular and “HD Broadcast” franchise. Disney will also acquire the substantial portfolio of historic entertainment technologies, such as radio broadcasts, that have kept audiences enthralled for many years. The Met is headquartered in New York City and the present intent is for Gelb and maestro Yannick Nézet-Séguin to remain in their current roles and locations. All remaining office and production staff will be offered generous severance packages.

The acquisition solves two highly complex problems for both brands. For The Met, it eliminates unsustainable union driven labor costs and equalizes marquee level talent fees to existing scale for voice acting talent. For Disney, it provides a way to re-introduce many of its classic films removed from circulation due to changes in cultural preferences.

“Disney is committed to creating stories with inspirational and aspirational themes that reflect the rich diversity of the human experience around the globe,” said Robert A. Iger. “By capitalizing on the cultural cache of opera, we can bring back our classic films rebranded as light operas. The amount of revenue lost from pulling classics like Peter Pan and Dumbo makes this acquisition profitable in year one. Based on the outcome of those efforts we may even ease Song Of The South back into rotation.”

“The basic operating costs in the Metropolitan Opera are slightly over $300 million per year,” said Gelb. “This year, it’s about $310 million. Two-thirds of those costs – $200 million – are being spent on union labor and visiting artists as well. So, two-thirds of our budget are going to unions through wages and social benefits. The best part of the acquisition is nearly all those costs disappear, giving us not only a sustainable business model but one that is reasonably profitable.”

Plans to migrate all of The Met’s post-pandemic programming to the tremendously talented creative team at PIXAR is underway beginning with Puccini’s Madama Butterfly. Principal singers are scheduled to arrive at Disney recording studios in June, 2021.

The Met acquisition follows Disney’s very successful acquisitions of Lucasfilm, Pixar, and Marvel, which demonstrated the company’s unique ability to fully develop and expand the financial potential of high quality creative content with compelling characters and storytelling through the application of innovative technology and multiplatform distribution on a truly global basis to create maximum value.

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