Winnie the Pooh valued in billions

Leah Zanolla | Posted: May 9, 2007 | Updated: Oct 19, 2014 - 9:25:27 AM

LOS ANGELES, May 8 /PRNewswire/ -- Quant Economics, Inc., a California- based company specializing in the application of econometrics and quantitative analysis to intellectual property matters, has conducted hundreds of hours of detailed analysis and estimates that certain rights licensed by Stephen Slesinger, Inc. to The Walt Disney Company for the use of Winnie the Pooh are valued at between $12 and $15 billion of Disney's market value. The total market value of the Disney enterprise is estimated at over $80 billion, of which these Winnie the Pooh rights represent 14 to 18 percent.

Quant Economics has also preliminarily estimated that the Winnie the Pooh rights granted by Slesinger yielded Disney EBITDA (i.e., earnings before interest taxes depreciation and amortization) of between $1.2 and $1.5 billion in 2006. Disney's total EBITDA in 2006 was $8.4 billion.

However, in ongoing litigation concerning Disney's rights to Winnie the Pooh, Disney reports in its Form 10-Q for the quarterly period ending December 30, 2006, that "Management believes that it is not currently possible to estimate the impact, if any, that the ultimate resolution of these matters will have on the Company's results of operations, financial position or cash flows."

"Given the substantial exposure confronting The Walt Disney Company, a prudent measure by the senior management of Disney, including their CEO and CFO, would be to scrutinize the royalties paid to Slesinger and remedy any noncompliance with the reporting requirements of the 1983 Agreement between Disney and Slesinger," said Ryan Sullivan, Ph.D., President and Chief Economist of Quant Economics. "Conversely, I would recommend that Slesinger do the same, and carefully review the royalty statements Disney presents to them."

The high profit margins realized by Disney in its character-based business properties combined with the popularity and success of Winnie the Pooh solidify Winnie the Pooh's role as a critical contributor to Disney's value in the marketplace. In addition to being the top character in Disney's high- margin consumer products arsenal, Winnie the Pooh pervades Disney's other business segments including media networks, parks and resorts, and studio entertainment.

Stephen Slesinger, Inc. holds U.S. and Canadian broadcasting, merchandising and other rights to Winnie the Pooh Characters and has licensed certain of these rights to Disney.

Quant Economics leverages economics, finance, and statistics for strategic business decisions and quantitative investing. They consult with companies in the licensing and valuation of intellectual property, including patents, trademarks, copyrights, and trade secrets. Ryan Sullivan, Ph.D., is the President and Chief Economist of Quant Economics. He is an expert in quantitative economics and financial analysis.