Entertainment\u00a0<\/strong><\/span><\/h1>\n

The entertainment sector is highly dependent on discretionary dollars; without discretionary income, consumers opt out of quality entertainment venues and select more frugal entertainment platforms to save money.\u00a0<\/span><\/p>\n

Entertainment Sector\u00a0<\/span><\/strong><\/h2>\n

The gross domestic product<\/strong><\/span><\/a> (GDP) is divided into 20 sectors. Entertainment is a sub part of the Arts, Entertainment, Recreation, Accommodation, and Food Service sector of the GDP. Overall, this sector is 3.6% of GDP. From the Department of Commerce<\/strong><\/a>,<\/span> the Arts, Entertainment, Recreation, Accommodation and Food Service Sector (AERAFS) has experienced the following historical relationship with GDP.<\/span><\/p>\n

Year\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0GDP\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0AERAFS\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Ratio\u00a0 \u00a0<\/span><\/strong><\/span>
\n2012\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $16.25 Trillion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $622.7 Billion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a03.83%\u00a0 \u00a0 \u00a0<\/span>
\n2013\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $16.84 Trillion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $652.3 Billion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a03.87%<\/span>
\n2014\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $17.55 Trillion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $691.9 Billion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 3.94%<\/span>
\n2015\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $18.21 Trillion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $747.7 Billion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 4.10%<\/span>
\n2016\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $18.69 Trillion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $790.5 Billion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 4.22%<\/span>
\n2017\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $19.48 Trillion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $828.2 Billion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 4.25%<\/span>
\n2018\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $20.53 Trillion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $869.6 Billion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 4.23%<\/span>
\n2019\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $21.37 Trillion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $914.2 Billion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 4.27%<\/span>
\n2020\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $20.89 Trillion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $672.1 Billion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a03.2%<\/span>
\n2021\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $22.99 Trillion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $839.6 Billion\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a03.6%\u00a0\u00a0<\/span><\/p>\n

The key to the above data is that this sector of the economy is indeed growing and will settle somewhere just over 4% of the entire economy. Therefore, a reasonable assumption for growth tied to the entertainment industry is two to three percent per year into the near future (next five years, 2023 through 2027).\u00a0<\/span><\/p>\n

In addition, not only is the sector growing, but the economy as a whole is too. The economy is growing at around 2.5% per year and this looks like it will continue for the near future (three to five years). Combined with the economy, it is reasonable to expect sales to increase around $25 to $30 Billion per year tied to just the economy and the entertainment sector. This is considered a conservative estimate and is likely to continue for three to four years.\u00a0<\/span><\/p>\n

The entertainment industry has multiply different providers of entertainment. The larger companies such as Netflix and Comcast provide streaming services. Comcast also provides communications; thus, it isn’t a pure entertainment company. The various types of entertainment include:<\/span><\/p>\n

\n
• Streaming (Netflix, The Walt Disney Company)<\/span><\/li>\n
• Movie\/Media (Sony, Warner Brothers, Paramount, Nexstar)<\/span><\/li>\n
• Gaming<\/span><\/li>\n
• Gambling<\/span><\/li>\n
• Parks\/Resorts (Disney, Sea World)<\/span><\/li>\n
• Theaters<\/span><\/li>\n
• Sports<\/span><\/li>\n<\/ul>\n

  This Entertainment Fund Group for the Value Investment Club is composed of five separate companies:<\/span><\/p>\n

  \n
  • The Walt Disney Company (Standard Bearer)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Market Capitalization\u00a0 \u00a0 \u00a0$165 Billion<\/span><\/li>\n
  • Netflix\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Market Capitalization\u00a0 \u00a0 \u00a0$200 Billion<\/span><\/li>\n
  • Warner Brothers Discovery\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Market Capitalization\u00a0 \u00a0 \u00a0$32 Billion<\/span><\/li>\n
  • Paramount Global\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Market Capitalization\u00a0 \u00a0 \u00a0 $11 Billion<\/span><\/li>\n
  • Sea World (Busch Gardens\/Sea World Parks)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Market Capitalization\u00a0 \u00a0 \u00a0 \u00a0$3.5 Billion<\/span><\/li>\n<\/ul>\n

    Altogether, these five companies have combined sales of $185 Billion per year. This is greater than 20% of the total AERAFS sector of the Gross Domestic Product.\u00a0<\/span><\/p>\n

    This group membership focuses in on streaming, media (shows\/movies) and parks. The Walt Disney Company<\/strong><\/span><\/a> is the standard bearer as it participates in all three segments of entertainment. The other members of this Entertainment Fund Group perform one or more of the three segments making it easy to compare and evaluate financial performance.<\/span><\/p>\n