There are only a handful of major media companies today that control most of the TV and movie content we see. The Walt Disney Company (NYSE:DIS) and Time Warner (NYSE:TWX) are two of the biggest, with properties across the media landscape. That's a powerful position, but it's also tenuous with companies like Netflix and Amazon building their own studios and proliferating streaming content across the world. 

With all of the change coming in media, is Disney or Time Warner the better buy long-term (if the AT&T deal falls through)? Here's a look at the companies. 

Image of Epcot Center at Disney World.

Epcot Center in Disney World. Image source: Getty Images.

Where Disney and Time Warner make their money

The first thing to look at is where the money comes from. In fiscal year 2017, Disney generated 43% of its revenue from media networks, 33% from parks and resorts, 15% from studios, and 9% from consumer and interactive products. 

Time Warner's business is split into Turner, HBO, and Warner Bros. They generated 40%, 21%, and 43% of total revenues, respectively, in the first nine months of the year, with some inter-segment revenue accounting for the percentages totaling over 100%. 

Risks facing media companies are very similar

If you look at the television networks dominating revenue at both companies, you can see where questions may arise about their future. Disney's ESPN is losing viewers every year, as are Turner's networks. 

Neither company has a distinct advantage in navigating the future of TV or broadcasting, so that part of the business is kind of a wash. Both are trying to figure out ways to push streaming, like HBO Now from Time Warner and Disney's upcoming streaming service, but there's no easy answer for the network side of the business. 

It's this inherant weakness in media where Time Warner sees value in a tie-up with AT&T, which would be able to leverage its distribution network to get the company's content into people's hands. Without AT&T, Time Warner would be on its own navigating new distribution platforms. 

Disney's studios have an edge

Where Disney starts to develop an edge over Time Warner is in the studio side of the business. In the past fiscal year, Disney generated $8.3 billion in revenue from studios and $2.4 billion in operating income. Time Warner's Warner Bros. had $9.3 billion in revenue and $1.2 billion in operating income in the first three quarters of this year. Time Warner is bigger, but Disney makes more money. 

The reason is that Disney has mastered the art of the box office hit. Marvel, Pixar, and Lucasfilm studios consistently produce some of the biggest movies of the year, which generate high margins for Disney. 

Disney's biggest differentiators

What Disney has that Time Warner doesn't is the theme parks and resorts. Incredibly, these are the second biggest business segment, making more money than the studios. 

Parks and resorts are another way Disney can leverage the characters and brands it builds with media networks and studios, so it's really an added profit center that plugs right into the business. 

As media networks go through ups and downs, the theme park business has been more steady, showing 8% growth in fiscal 2017. The segment may be more impacted by other risks, like a recession, but it gives Disney a business that isn't as correlated as the content business. 

Disney is the top stock today

There are flaws with Disney, from its reliance on blockbuster movies to ESPN's recent troubles, but long-term I think the business model is set up for success more than Time Warner's. Investors don't even have to pay much of a premium for Disney, which trades at 18.1 times trailing earnings compared to a 17.1 ratio for Time Warner after the AT&T merger came into question. 

Disney isn't a perfect company, but it has valuable assets and a profitable foundation, and I think it's a better stock than Time Warner today. 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Travis Hoium owns shares of AT&T and has a family member who works at Amazon. The Motley Fool owns shares of and recommends AMZN, NFLX, and Walt Disney. The Motley Fool recommends Time Warner. The Motley Fool has a disclosure policy.