business news in context, analysis with attitude

by Kevin Coupe

There is a phrase - “intelligent loss of business” - that came to mind over the weekend when I was reading a story in the New York Times about how the Walt Disney Co. is dealing with the gambling issue, a problem that has presented itself since its acquisition of Marvel in 2009 for $4 billion, and has reoccured now that Disney has acquired Lucasfilm for $4 billion.

It is a problem because Marvel long has licensed its characters to a variety of gambling interests, so one can see Iron Man on slot machines, or the Avengers on state lottery tickets. The same goes for Lucasfilm, which licenses out its Star Wars and Indiana Jones characters for use in gambling establishments.

The bulk of the Times story is about how Disney continues to oppose proposed legislation in Florida that would allow for the expansion of legalized gambling: “Disney, a powerhouse in Florida because of its financial might and its sway over the tourism industry, has long led the fight against the expansion of casinos in the state, arguing successfully that gambling tarnishes Florida’s coveted family-friendly brand … But in a nation increasingly awash in various forms of gambling, Disney is finding that keeping a constantly growing entertainment conglomerate completely removed from gambling is far more challenging than it used to be.” (There are those who argue that Disney is only anti-casinos because it doesn’t want competition that could draw people away from its various theme parks.)

But what impressed me was something I did not know - that Disney “is so opposed to gambling that not even Disney cruise ships offer casinos, a mainstay of major cruise liners.”

And now, despite the revenue that comes from such ventures, Disney is working to untangle itself from all the various agreements that have characters that it now owns appearing in gambling-related venues. For the most part, that means allowing agreements to expire without renewing them, a process that can take a few years.

That’s impressive - because it means that Disney is willing to not make money when it comes to products that it sees as being inconsistent with its brand - which, in my view, is called the intelligent loss of business.

There’s no question that Disney always has been a fanatical guardian of its own brand, and I think this story highlights the kinds of questions that every business should ask itself every day. Will what we adding add to our brand equity? Or will it hurt the brand, whether in the short-term or the long-term?

Because there’s not much that is more important to a business than brand equity.

Disney’s approach is, I think, an Eye-Opener.

BTW … compare Disney’s approach to the questions raised about Southwest Airlines, as explored in “Your Views,” below…
KC's View: