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3 Reasons Disney Warmed Up to Nike's CEO

By Rick Munarriz - Jan 13, 2016 at 8:05AM

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The media giant taps Nike CEO Mark Parker for its board of directors.

Source: Disney.

Mickey Mouse is lacing up in the boardroom. Disney (DIS -1.64%) announced this week that it's adding Nike (NKE -0.71%) CEO Mark Parker to its board of directors. The move pushes the media giant's board to a dozen members.

Disney's boardroom is an eclectic mix of leaders on the surface. We're talking about executives from financial services institutions, sandwich shops, beauty products distributors, and social-media darlings coming together to assist the media mogul. It's just the way a boardroom should be.

This doesn't mean bringing in corporate visionaries in different industries won't serve a grander purpose. Let's go into a few of the reasons having Nike's top man could be a good thing for Disney.

1. If content is king, then branding is the executioner
Nike is an iconic brand. Its signature Swoosh is one of the most recognizable logos on the planet. Disney is a master of content, paying billions to acquire more of it along the way. It's no chump on the branding front, but when you can get folks to pay three figures for a pair of sneakers -- something Nike has been doing since the early days of Air Jordans -- you begin to realize that branding creates pricing power.

Disney already prices its branded merchandise at a premium, but having Parker's perspective on branding can only help.

2. Disney parks are encouraging active lifestyles
More than 80,000 people participated in the five endurance events during the annual Walt Disney World Marathon over the weekend. The marathon's success has pushed Disney into hosting several other themed running events throughout the year under the runDisney banner.

Then we get to its theme park operations where it's been shaking up its kid menus, offering healthier alternatives to groom kids for fit lifestyles. Nike's business revolves around active fitness. Is Nike putting out Disney-licensed performance apparel? It's a no-brainer.

3. MyMagic+ can learn from NikeFuel's mistakes
Disney has reportedly spent $1 billion on the MyMagic+ technology where guests donning RFID-backed Magic Band use the bracelets to scan their way into rides or have their on-ride photographs saved to their online accounts. 

Nike is no stranger to functional bracelets. It was an early player in the fitness tracker craze with its short-lived FuelBand. It hit the market four years ago, tracking movements with its proprietary NikeFuel metric. It failed to gain an audience, and was discontinued two years later

Disney didn't spend $1 billion on a wearable technology to just settle for what it's doing with the MyMagic+ now. It will evolve, and having Nike's CEO on its board could help make sure that Disney doesn't duplicate Nike's miscues. 

Rick Munarriz owns shares of Walt Disney. The Motley Fool owns shares of and recommends Nike and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$122.91 (-1.64%) $-2.05
NIKE, Inc. Stock Quote
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