The Walt Disney Co.’s board named director James Gorman as chairman of its succession planning committee.

Succession has been a big issue for Disney. Replacing CEO Michael Eisner was messy before Bob Iger got the job in 2005. Iger’s replacement, Bob Chapek, was a washout, prompting Iger to return to the job in 2022.

When Iger, now 73, returned, he and the board said finding the company’s next CEO would be a priority.

Gorman, who joined the board this year, oversaw the process that found his own successor as CEO at Morgan Stanley, where he continues to serve as executive chairman.

“James is a highly respected leader, and we’ve asked him to serve as the new Chair of the Succession Planning Committee given his deep succession planning experience and long-term strategic mentality,” said Disney board chairman Mark Parker, who had served as the head of the succession committee.

“Succession planning is a top priority of the board, and I am eager to continue collaborating with James on the committee as we advance the important work we have already been doing to identify and prepare the next CEO of The Walt Disney Company,” Parker said.

In addition to Gorman and Parker, Disney directors Mary Barra and Calvin McDonald will continue to serve on the succession committee.

The board has said it is reviewing internal and external candidates for the CEO post. Internal candidates are going through a preparation process that includes mentorship from Iger, external coaching, and engagement with all board directors.

The Walt Disney Co. CEO Bob Iger said that, as the company continues to incur losses to its TV sectors, he plans to cut marketing budgets for Disney Plus, which he believes are “too high,” in favor of investing in streaming technology.

“As we got into the streaming business in a very, very aggressive way, we tried to tell too many stories,” explained Iger, speaking Wednesday at the MoffetNathanson Media, Internet and Communications Conference in New York. “Basically, we invested too much, way ahead of possible returns. It’s what led to streaming ending up as a $4 billion loss, for instance.”

Among new technology features Iger discussed Wednesday is one that allows Disney streaming platforms to send “highly customized messages to consumers when we suspect they’re at risk [of losing interest],” providing content that might rekindle their engagement.

Also Read: Disney Upfront Welcomes Back Bob Iger — and Jimmy Kimmel

“That first great experience has to be dynamic,” Iger said. “Every time they open the app it has to be something different. This is where AI will be a hugely important tool to do all this.”

Iger also said the media giant plans to “pretty dramatically” cut its investments in linear television due to the sustained audience erosion.

“Spending more resulted in volume, not quality,” Iger explained. “Traditional media is not going to be a growth business, but it could become an important component to our ability to engage with the consumer.”

During the Q&A, Iger highlighted Disney’s strategy of combining linear and streaming distribution models in order to “aggregate greater audiences.”

“We put something on ABC —  Grey’s Anatomy, Abbot Elementary — and it goes on Hulu pretty quickly,” explained Iger. “We’re using the marketing of the traditional network …  We’re using those networks efficiently and effectively.”

The CEO pointed to ABC’s “older” demographic compared to the relatively younger viewer base on Hulu, which allows Disney to tap multiple audiences without increasing marketing spend.

Iger also said that the direct-to-consumer launch of ESPN next year could “increase engagement to an extraordinary level," but also warned that he expects to still see some “losses in streaming” in the upcoming quarter.

“We're going to continue to see erosion in terms of subs for those businesses,” said Iger. “But we're going to actually continue to drive profitability because we're managing our costs so effectively. So we feel comfortable with our hand right now.”

Disney stock fell 2.5% Wednesday.

Among the many questions still surrounding the bundled linear sports-channel joint venture between Disney, Fox and Warner Bros., some have asked whether Disney is convoluting the also-upcoming over-the-top launch of ESPN, otherwise known as “Flagship.” 

Appearing on CNBC's Squawk Box Thursday morning, Disney CEO Bob Iger downplayed the notion of a conflict, noting that "flagship will have significantly more than what the ESPN component of JV will have."

The over-the-top ESPN app, Iger added, “will have fantasy sports and the opportunity to bet on sports right off the app. There will be fan engagement and interactive capabilities — it’s not the same thing.”

Iger was also asked about the name of the JV: “Do you have one?” he quipped. “We have a suggestion box.”

Iger's Squawk Box comments came a day after he vanquished activist investor Nelson Peltz in a proxy battle, then subsequently leaked a few details about the ESPN OTT venture to the board. 

The app, he said, will debut in 2025 and will be available as part of a Disney Plus bundle. 

Now that The Walt Disney Co. CEO Bob Iger has won the proxy battle waged by Trian Fund Management's Nelson Peltz, what happens next?

Analysts said Disney can now proceed with its plans to fix the company, which had already been bearing fruit. 

In recent months, Iger has focused more on the quality of the company’s movies, announced plans to make the ESPN networks available via streaming, cut costs and reduced head count — strategies that will continue with the Disney board in place.

Disney can declare victory and move forward, MoffettNathanson senior research analyst Michael Nathanson said.

“Despite the sell-off on news that Disney’s slate won the proxy vote, Disney shareholders can celebrate the fact that the company’s stock price has regained its momentum with 23% outperformance relative to the S&P 500 this year,” Nathanson said.

Disney stock closed at $118 a share on Wednesday, down 3%.

Matthew Dolgin, senior equity analyst at Morningstar, said the outcome of the proxy fight “wasn’t nearly as consequential as suggested by the publicity that the contest generated,” partly because Trian didn’t raise issues Disney and its shareholders weren’t aware of and its suggestions weren’t revolutionary. 

“We’re maintaining our $115 fair value estimate [of Disney’s value per share] and believe the stock’s recent appreciation now reflects forthcoming improvement, which we expect will occur regardless of which side had won,” Dolgin said.

“The most important thing for Disney is that the battle is now behind it and it can return its focus to addressing the issues that need to improve,” he said.

Disney’s most notable need is to figure out how best to preserve pay TV revenue as viewership shifts to streaming services, Dolgin said.  

“We strongly disagreed with Trian’s suggestion that Disney should explore deemphasizing the importance of non-sports linear networks — perhaps by finding a strategic partner — and we think Trian trivialized how the traditional media industry’s decline factored into Disney’s struggles,” he said. 

“In our view, Disney and its peers need to enhance the value of the pay TV bundle by including streaming access — similar to what Disney did with Charter — rather than trying to position for a world without traditional pay-TV or linear networks,” Dolgin added.

Dolgin said he believes Disney is on track to improve margins and profits.

“We have no doubt that Disney, like all peers, made mistakes, but we don’t think this is indicative of an inability to right the ship,” he said.

Similarly, Nathanson said that with the proxy fight in the rearview mirror. “We believe the company has finally focused on fixing the key challenges that we were left behind by the prior CEO,” he said.

Those include restructuring management to give creative executives more control, revisiting an overexpansive Disney Plus strategy, addressing the company’s challenges in India and more aggressively managing costs as Disney’s linear networks decline.

“We think the market is finally reflecting optimism that CEO Iger along with CFO Hugh Johnston will drive upside to Disney’s long-term operating profitability,” Nathanson said. “This starts with Disney delivering upon or outperforming its fiscal year 2024 adjusted earnings per share guidance of least 20% growth and pacing ahead of its $8 billion FY 2024 free-cash-flow guidance.”

The Walt Disney Co. shareholders voted to back CEO Bob Iger and its current directors by a substantial margin, the company said during its annual meeting Wednesday.

Shareholders rejected nominees backed by Nelson Peltz’s Trian Fund Management and Blackwells Capital.

Final vote totals will be released by the company in the coming days.

Re-elected as directors were: Mary T. Barra, Safra A. Catz, Amy L. Chang, D. Jeremy Darroch, Carolyn N. Everson, Michael B.G. Froman, James P. Gorman, Robert A. Iger, Maria Elena Lagomasino, Calvin R. McDonald, Mark G. Parker and Derica W. Rice.

Management proposals about executive pay and accounting were passed, while shareholder proposals were defeated.

“I want to thank our shareholders for their trust and confidence in our Board and management,“ Iger said. “With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers.”

Added Disney chairman of the board Mark Parker: “We are immensely grateful to our shareholders for their investment in Disney and their belief in its future, particularly during this period of great change in the broader entertainment industry. We are fortunate to have a highly qualified Board of Directors who possess a profound commitment to the enduring strength of this company and an enormous amount of experience and expertise, including succession planning. I’m thankful for Bob and his exceptional management team, as well as Disney’s employees and Cast Members around the world, for continuing to deliver for consumers and shareholders throughout this distracting proxy battle.” 

Before the vote, Nelson Peltz spoke at the meeting, noting that Trian and its affiliates have more than $3.5 billion invested in Disney.

“We invest in great companies that for one reason or another have stumbled. We seek to collaborate with management to make them better,” Peltz said. “We want Disney to get back to creating great content, delighting consumers and creating value for shareholders.”

Peltz acknowledged that Disney and Iger had taken steps to reduce streaming losses, rationalize its content production and started several initiatives at ESPN.

Long-term, Peltz noted that Disney stock is still down from its high at about $200 a share and pointed out that since Trian started its campaign, the stock has increased 50% and has been the best performer among the Dow-listed stocks year to date.

 Iger addressed some of the company’s issues during a question and answer session at the meeting.

Iger insisted that he has “never been more confident” that streaming would  become “a key earnings growth driver for the company.” He said he expects to add subscribers and that streaming would achieve double-digit operating margins.

With Disney Plus, Hulu and the streaming version of ESPN coming in 2025, “Disney has a chance to become the ultimate streaming destination for consumers,” He said.

At the parks, Iger said that the company has numerous projects in development, and that details would be shared when there’s something tangible to discuss.

Asked about Disney’s involvement in politics and social advocacy, Iger said “our job is to entertain.” He added that by telling great stories, Disney is a source of joy, hope and optimism . . . I always believe we have a responsibility to do good in the world, not to advance any agenda.”

Iger said that he was bullish on women’s sports after Caitlin Clark helped draw record ratings for a women’s basketball game. “ESPN is pleased to be a part of that,” he said.

And asked if Disney Plus would be streaming more Taylor Swift concerts, Iger said “we’re thrilled we were able to reach an agreement with Taylor and her team to put the film of her most recent concert on Disney Plus. We’d like nothing more than to continue our great relationship with her.”

The fight for board seats has been called one of the most expensive proxy fights in corporate history.

Peltz, an activist investor, originally criticized Disney for its stock price, which had lost $70 billion in value between February and December of last year. Peltz joined up with Isaac Perlmutter, who was fired by Disney and owns 25 million Disney shares. (Disney has knocked Perlmutter for having a “personal agenda” against Iger.)

Trian has also complained about Disney’s streaming losses, the performance of its movie slate and its plans to spend $60 billion on its parks.

Peltz campaigned to get a seat on Disney’s board for himself and for Jay Rasulo, a former Disney CFO.

When Iger returned to Disney as CEO in November 2022, replacing Bob Chapek, he moved quickly with a plan to cut costs by $7.5 billion that included reducing the company’s headcount by about 5,000.

To make shareholders happy, Disney has also started paying a dividend on its stock.

In addition to Trian, another investment company, Blackwells Capital, put forward candidates for Disney’s board. Blackwells has been generally supportive of Iger, but nonetheless nominated former Warner Bros. and NBCUniversal executive Jessica Schell, Tribeca Film Festival co-founders Craig Hatkoff and TaskRabbit founder Leah Solivan as directors.

Last month, Iger called the proxy battle a distraction to the company as it tried to navigate a new media landscape.

“We’re at this hard every day, and when you go from fixing [the company], which was significant and heavy lifting, to really creating meaningful growth for our shareholders, the only way to achieve that is by focus and this campaign is in a way to distract us, to take our eye off all those balls,” Iger said, speaking at the Morgan Stanley Technology Media and Telecom Conference.

“Focus is necessary to generate what we need to generate for the shareholders,“ he said. “It’s that simple. And I am working really hard to not let this distract me because when I get distracted, everybody who works for me is distracted, and that’s not a good thing.”

Nelson Peltz and his Trian Fund have publicly claimed to support Bob Iger's ascension to the Disney board of directors. The logic: Such a move would, in their stated opinion, facilitate a transition away from Iger as CEO of the company.

On Monday, Pelz and Trian -- which control $3.5 billion of Disney stock -- reiterated that position: “Trian supports Mr. Iger as a candidate for the Board and as CEO," the activist shareholder said in a new statement. 

Disney shareholders are set to vote on board seats on April 3. Peltz and Trian are trying to claim two seats on the board

Despite its proclamation of support for Iger, however, Peltz and the hedge fund withheld their votes for Iger's board candidacy.

The reasons aren't precisely clear. 

According to Trian’s press release, its most important grievance against the current board was the failure of “its most important job — CEO succession."

Peltz and Trian say their beef is with the Disney board, not Iger. 

“In this election contest, Disney has emphasized that Mr. Iger is admired and respected (including, for example, by service providers and advisors), which we do not doubt,” Trian's statement reads. “Trian supports Mr. Iger as a candidate for the board and as CEO. That Disney spends so much time and ink defending Mr. Iger — while saying almost nothing about the two director candidates whose reelection Trian is challenging — is both troubling and telling. This campaign is not about Mr. Iger, nor is it a referendum on his leadership. And in all events, Disney is, and must be, more than just one person, especially one whose contract expires in less than two short years.”

Certainly, it's been a busy last few days for Peltz, who questioned the leadership of Iger and Marvel chief Kevin Feige in an interview with the Financial Times, claimed that he does not want to replace the CEO. Peltz also criticized Disney and Marvel for their alleged "woke" film strategy.

Earlier this month, Disney fired back at Peltz's running criticism, with an investor presentation titled “Correcting Trian’s Fact With Fiction,” and which prominently included a picture of Pinocchio with a growing nose.

Trian owns just about 1.5% of Disney’s outstanding shares, when combined with the ownership of ally Ike Perlmutter, the former Marvel Entertainment Chairman  who has taken Peltz's side in his proxy fight against the Disney board.

Disney has nominated a slate of 12 for its board of directors, including Iger. 

The Walt Disney Co. CEO Bob Iger said the proxy battle mounted by activist investors is a “distraction” for him and senior managers as they try to make a complex company more profitable.

“We’re at this hard every day, and when you go from fixing [the company], which was significant and heavy lifting, to really creating meaningful growth for our shareholders, the only way to achieve that is by focus and this campaign is in a way to distract us, to take our eye off all those balls,” Iger said, speaking at the Morgan Stanley Technology Media and Telecom Conference on Tuesday.

“Focus is necessary to generate what we need to generate for the shareholders,“ he said. “It’s that simple. And I am working really hard to not let this distract me because when I get distracted, everybody who works for me is distracted, and that’s not a good thing.” 

Iger was upbeat, saying that in the 15 months since he returned as CEO, the company had accomplished a restructuring that put creative at the center of Disney’s management structure, and that the company was likely to exceed its $7.5 billion cost-cutting goal.  

He said he expected operating income to grow by the low to mid teens in the second quarter compared to a year ago, exceeding the company’s recent guidance. The company is also pacing ahead of its cash-flow guidance, he said.

Iger addressed the business’s dissident shareholders who would like to see a different approach.

On streaming, Iger noted that Dana Walden and Alan Bergman, the executives now managing Disney’s streaming business, also manage the company's film and TV content creation.

“That’s really important when it comes to streaming, because streaming is a path to monetizing what they make in a much more efficient, more effective way,“ he said. ”So it starts with that.” 

Catching Up to Netflix

But Iger conceded that Disney was behind Netflix in streaming technology. 

Iger said that Disney Plus quickly grew to 100 million subscribers but “what we didn’t have was the technology that we needed to lower customer acquisition and retention costs, to increase engagement to essentially grow our margins by reducing marketing expenses.”

He said Disney was now in the process of creating all of that technology.

“Obviously, the gold standard there is Netflix,“ he said. “We need to be at their level in terms of technology. One of the reasons why their margins are so much more significant than ours is because they have that technology,” he said.

Iger added that Hulu is part of Disney’s strategy to increase engagement with its streaming business. Having Hulu within the Disney Plus app increases the volume of content available to consumers. And bundling that way tends to bring down churn rates.

“We’re finding wherever we bundle, churn rates are down significantly. So that’s a path to profitability,” he said.

Trian Asset Management, one of the shareholders seeking seats on Disney’s board, wants streaming to be more profitable. It is also against the expense of creating a new streaming version of ESPN.

Iger didn’t indicate any changes in how Disney’s sports business will be managed. The joint venture with Fox and Warner Bros. Discovery is expected to launch this year. A streaming, a la carte version of flagship ESPN would come next year.

“What we’re trying to do is be very pro-consumer,” Iger said of the company’s sports strategy. 

“You've got a lot of young people who have not subscribed to the multichannel bundle. You have a lot of people that used to be subscribers that lapsed,” Iger said.  “We want them in they want to watch the sports they want to watch. We're trying to provide them a less expensive, more focused opportunity for them.”

Iger noted subscribers who subscribe to the joint venture’s offering will be able to upgrade to the digital version of ESPN, which will have additional features, including betting.

Next Up: NBA

ESPN’s big negotiation now is with the National Basketball Association. 

“Negotiations are unfolding,” He said. It’s our goal to stay in that relationship because we love the sport.”

Iger also said that he felt good about the upcoming films from Disney’s studio — which will eventually generate engagement on Disney Plus — and that there was room to grow Disney’s parks and cruise businesses.

The Walt Disney Co. said it made a deal with ValueAct Capital Management as it fights off a proxy fight led by activist investor Trian Fund Management and former Disney executive Isaac Perlmutter.

ValueAct, a San Francisco-based investment fund, had been reportedly building a stake in Disney of undisclosed size. Trian and Perlmutter, the former chair of Marvel Entertainment, own 44 million Disney shares. 

ValueAct has agreed to support Disney CEO Bob Iger and the Disney board’s recommended slate of directors at the company’s 2024 meeting.

Disney also signed a confidentiality agreement with ValueAct, enabling ValueAct to receive information about Disney, have meeting with directors and executives and consult on strategic matters.

ValueAct previously invested in Spotify, The New York Times, 21st Century Fox, Nintendo, Microsoft, Adobe and Salesforce.

Disney’s stock price has plunged as cord cutting has eaten into the linear TV businesses and the cost of competing in streaming has created barrels of red ink.

Under pressure from shareholders, Disney has cut $7.5 million in costs and reduced headcount by about 5,000. 

Trian, seeking two seats on Disney’s board, complained the company’s shares have lost $70 billion in value since February, further cost-cutting is needed and the board needs executives with more media experience.

Disney has alleged that Perlmutter, whose employment at Marvel Entertainment was terminated by Disney earlier this year, has a “longstanding personal agenda” against Iger.

Another hedge fund, Blackwells Capital, plans to nominate three directors for Disney’s board.

“ValueAct Capital has a track record of collaboration and cooperation with the companies it invests in, and its co-CEO, Mason Morfit, has been very constructive in the conversations we’ve had over the past year,“ Iger said. “We welcome their input as long-term shareholders.”

Last year, Iger indicated that Disney’s linear businesses, including ABC, its entertainment cable networks and its TV stations, might not be core assets, setting up the possibility of a sale. Iger later walked that back, indicating that those assets might still have value to the company.

Disney is also in the process of creating a standalone, direct-to-consumer version of ESPN and combining Disney Plus and Hulu into a streaming business that can compete with Netflix.

“Disney is the world’s leading entertainment company. It has the best intellectual property, sports brand and parks & experiences assets in the industry,” said Morfit, who is chief investment officer for ValueAct as well as co-CEO. “As legacy technologies transition to digital platforms, we believe Disney can lead the media industry forward. We could not be more excited to partner with Bob and the board to help create long-term sustainable shareholder value.”

Blackwells said its board nominees are: Jessica Schell, a former Warner Bros. Discovery and NBCUniversal executive; Craig Hatkoff, a real estate investor and co-founder of the Tribeca Film Festival, and Leah Solivan, a venture capitalist and technology investor who founded TaskRabbit and sold it to Ikea.

“Blackwells’s highly qualified candidates have the necessary backgrounds and expertise to support Mr. Iger’s efforts constructively and complement the board,” Blackwells said. “The Trian nominees, and the reductive nature of its campaign do not provide shareholders those benefits.”

Blackwells also criticized Trian for flip-flopping, self-interest and personal quarrels that have no place in a boardroom. 

“We call on Mr. Peltz to end his peacocking so that Disney can focus on its bright future, and not be dragged backward in time," Blackwells chief investment officer Jason Aintabi said. 

"Disney’s current leadership is invaluable to its shareholders, and our three exceptional candidates are being nominated along with a business proposal specifying that any incumbent director outvoted by Blackwells’ nominees be immediately added back to the Board following the 2024 Annual Meeting,” Aintabi said. "This campaign provides shareholders a necessary alternative to what would otherwise be a solipsistic sideshow.”

Disney said its board governance and nominating committees will review the proposed Blackwells nominees and provide a recommendation to the board as part of its governance process.

“Disney has an experienced, diverse, and highly qualified Board that is focused on the long-term performance of the company, strategic growth initiatives including the ongoing transformation of its businesses, the succession planning process and increasing shareholder value,” the company said in a statement.

The Walt Disney Co. defended its record as activist investor Nelson Peltz of Trian Fund Management is teaming up with former Disney executive Isaac Perlmutter to mount a potential proxy fight.

Trian said it owns $3 billion worth of Disney stock and talked on Thursday with Disney CEO Bob Iger. Trian said Disney’s board was willing to meet, but turned down a request to put Peltz, Trian’s founder and CEO, on the board.

“Since we gave Disney the opportunity to prove it could ‘right the ship’ last February, up to our re-engagement weeks ago, shareholders lost about $70 billion of value,” Trian said. “Trian intends to take our case for change directly to shareholders.”

Disney stock closed up less than a point  Thursday. After the close of trading, Disney's board said it would pay stockholders a cash dividend of 30 cents a share.

In a statement, Disney said that Perlmutter, who was fired as chairman of Disney’s Marvel Entertainment unit as part of Disney’s cost-cutting program, owns 25 million of the 44 million Disney shares Peltz claims to control.

“This dynamic is relevant to assessing Mr. Peltz and any other nominees he may put forth as directors, as Mr. Perlmutter was terminated from his employment by Disney earlier this year and has voiced his longstanding personal agenda against Disney’s CEO, Robert A. Iger, which may be different than that of all other shareholders,” Disney said.

Disney also said that it has cut $7.5 billion in costs since Iger returned to the company and now plans to go from “a period of fixing to a new era of building.”

The cost-cutting plan convinced Peltz to back off from plans to mount a proxy battle last year. 

The company added that “with one of the strongest balance sheets in the media sector, Disney expects free cash flow to approach pre-COVID levels in fiscal 2024, and the Board and management are steadfast in our commitment to ensuring The Walt Disney Company’s long-term success for the benefit of all our shareholders.”

On Wednesday, Disney announced that it added James Gorman, CEO of Morgan Stanley and Jeremy Darroch, former group chief executive of Sky, to its board.

“Their appointments reflect Disney’s commitment to a strong board focused on the long-term performance of the company, strategic growth initiatives, the succession planning process, and increasing shareholder value,” the company said.

Disney said its board will recommend that shareholders vote for its slate of directors at the company’s upcoming meeting.

Mark Parker, chairman of Disney''s board, said the dividend was a sign things were improving at Disney.

“This has been a year of important progress for The Walt Disney Company, defined by a strategic restructuring and a renewed focus on long-term growth,” Parker said.   “As Disney moves forward with its key strategic objectives, we are pleased to declare a dividend for our shareholders while we continue to invest in the company’s future and prioritize meaningful value creation.”

With The Walt Disney Co. drowning in red ink at its direct-to-consumer business, CEO Bob Iger admitted he’s envious of the profit margins posted by streaming leader Netflix.

On Disney’s third-quarter earnings call with analysts Wednesday, Iger was asked what is the company’s long-term expectation for direct-to-consumer sales in terms of profit margins, given that Netflix was more profitable when its streaming business was at about the same revenue level as Disney’s.

For the quarter ended in June, Netflix had $8.187 billion in revenue and operating income of $1.827 billion, for a 22.3% operating margin.

Disney had $5.25 billion in direct-to-consumer revenue but posted a loss of $512 million in the quarter. (The loss was half the size of the $1.06 billion loss posted a year ago.)

Iger noted that Disney was, relatively speaking, just getting started in the streaming business.

“Our streaming business is still actually very young,“ he said. “In fact, it’s not even four years old. It launched in November 2019. And we love to have the margins that Netflix has.”

Netflix lost money as it built its streaming business. And Iger noted that Netflix has built those margins over the years they’ve been in the business.

“They've done so because they figured out how to really carefully balance their investment and programming with their pricing strategy, and what they spend in marketing,” Iger said.

“Because we're new at all of this, we actually have not really achieved the kind of balance we know we need to achieve in terms of cost savings and pricing, and money spent on marketing, and of course all the other things that we're looking at from a technological perspective that grows engagement with our customers,” Iger said.

Iger said that having a recommendation engine could help increase consumption and improve performance.

“I can't emphasize enough the time we’ve put in managing cost,“ Iger said. “And we've done a tremendous job in a short period of time, exceeding the cost reductions we said we were going to achieve. And that’s obviously a major step in the direction of improving our margins.” 

Disney will be raising prices on the ad-free versions of its services, implementing controls over password-sharing and growing its advertising business in order to make streaming more profitable, he added.

“I’m reasonably optimistic and hopeful that we will be improving our margins in this business significantly over the next few years,” he said. “I’m not going to make any further predictions on that, except the good news is we know how much work we have to do.”

During the call, Iger took umbrage when an analyst asked about a report speculating Disney could be acquired by a big tech company.

“I’m not going to speculate about the potential for Disney to be acquired by any company, whether it’s a technology company or not,” he said. “Obviously, anyone who wants to speculate about such things would have to immediately consider the global regulatory environment. I'll say no more than that. It’s not something that we obsess about.” 

The Walt Disney CEO Co. Bob Iger has reportedly tapped two former execs, Kevin Mayer and Tom Staggs, as consultants to help navigate the company’s transition to a streaming future.

Puck reported that the two will advise Iger, as well as ESPN chief Jimmy Pitaro, on Disney’s streaming strategy as the company faces an existential crisis, with Iger himself recently questioning whether its ABC broadcasting unit is still actually a “core” business, (rattling some nerves in process). 

In a wide-ranging interview with CNBC’s Squawk Box earlier this month, Iger admitted that “… the distribution model, the business model that forms the underpinning of that business, and that has delivered great profits over the years is definitely broken. And we have to call it like it is, and that’s part of the transformative work we're doing.” 

He also suggested that with the decline of the pay TV bundle, ESPN’s future was as a stand-alone DTC streaming offering. “There’s almost a guarantee that that occurs. It's an advertiser’s dream. There’s a great demographic there and it lends itself to technology in many ways,” he said.

Mayer and Staggs will also advise ESPN chief Jimmy Pitaro as the company courts strategic partners for an ESPN streaming service. But that transition is expected to be particularly painful, sending shockwaves through the distribution industry where live sports is a long-standing cornerstone of the business model. Pundits estimate that, stripped of its cable bundle subsidies, a standalone ESPN would have to charge at least $30 a month just to break even and it’s not clear how many die-hard fans would be willing and able to pony up that much.  

Both Mayer and Staggs were once considered top contenders for the CEO position.

Mayer was instrumental in Disney’s M&A spree, snapping up Pixar, Marvel and Lucasfilm. He also spearheaded Disney’s streaming strategy leading up to the launch of Disney Plus. He left in 2020 when he was passed over for the top job in favor of Bob Chapek, whose somewhat disastrous two-year stint as CEO came to an abrupt end in November when the company’s board of directors lured Iger out of retirement with one key priority — find a successor.

The board recently extended his contract through 2026 to give him more time to cultivate an heir to the “Magic Kingdom.”

Staggs previously served as CFO, chief operating officer and head of theme parks. He left in 2016.

In 2020, Mayer and Staggs partnered to form a well-funded special purpose acquisition company (SPAC) to look for targets in the telecom, media and technology space. Blackstone-backed Candle Media has gone on to acquire Hello Sunshine, along with Moonbug Entertainment and a stake in Will Smith and Jada Pinkett Smith’s entertainment company, Westbrook Inc.

The Walt Disney Co. and its ESPN unit have recently held high-level discussions with the NFL, NBA and Major League Baseball about bringing the leagues in as actual stakeholders as ESPN moves to a direct-to-consumer streaming model. 

The news came late last week via an exclusive report from CNBC, which had just hosted Disney CEO Bob Iger on Squawk Box. The report was confirmed over the weekend by The New York Times and several other outlets. 

For the quarter ending March 31, revenue growth for Disney's linear TV networks finally and officially came to a stop. And in May, ESPN chairman Jimmy Pitaro confirmed what everyone in the television industry had long assumed — it isn’t a matter of if ESPN would go DTC, but when. 

Last week, while appearing on Squawk Box, Iger indicated that Disney was “looking for strategic partners” that could help ESPN with either distribution or content.

That quest appears to be underway, with Disney and ESPN talking to their biggest content licensing partners about a new way of proceeding that might not present as much risk for the media company. 

As CNBC noted, selling minority stakes to the leagues might be a way to mitigate massive multibillion-dollar national rights licensing costs for ESPN. This would allow Disney to better compete with Amazon, Apple and Google, who are aggressively courting rights to live sports. 

Disney, which said in an SEC filing late in 2022 that it has lost more than 10 million ESPN subscribers to cord-cutting over the past two years, expects to spend $45 billion on sports rights licensing over the next five years. 

Disney’s national TV rights deal with the NBA is set to expire in June 2025. Given Disney will be migrating ESPN to a distribution model with significantly leaner margins than what was traditionally seen in linear, it might make sense to offer such a league partner an equity stake rather than come up with a raise on the current bill of $2.5 billion a season. 

“We have great relationships with Major League Baseball and the National Hockey League and various college conferences, and of course the NFL and the NBA,” Iger told CNBC last week. “It’s not just about the live sports coverage of those leagues, those teams, it’s also about all of the shoulder programming it throws off on ESPN and what you can do with it in a streaming world.”

Bob Iger, since returning as CEO at The Walt Disney Co., has determined that linear television — including ABC, local television stations and entertainment-focused cable networks — may no longer be core businesses for the company.

“They may not be core,” Iger said, speaking on CNBC from the Allen & Co. conference. 

“Yeah, there’s clearly creativity and content that they create that is core to Disney, but the distribution model, the business model that forms the underpinning of that business, and that has delivered great profits over the years is definitely broken,“ he said. “And we have to call it like it is, and that’s part of the transformative work we're doing.” 

Also Read: Disney Board Extends Bob Iger’s CEO Contract Through 2026

Since returning to the company last year, Iger said, he found that the linear TV business has been more disrupted than he expected, becoming what he termed “no-growth businesses.”

Iger did not say when he might dispose of Disney’s TV businesses or who might buy them.

Iger continued to say that Disney will inevitably create a stand-alone, direct-to-consumer version of ESPN.

“ESPN: If you look at today's media landscape, sports stands very, very tall in terms of its ability to convene millions and millions of people all at once,“ he said. “There’s almost a guarantee that that occurs. It's an advertiser’s dream. There’s a great demographic there and it lends itself to technology in many ways, both in terms of coverage, distribution and consumption. And our position in that business is very unique. We have a great brand. We've had a great business, and we want to stay in that business. That said, we’re going to be open-minded there, too, not necessarily about spinning ESPN off but about looking for strategic partners that could either help us with distribution or content, but we want to stay in the sports business.

“There’s so much more that can be done with it in terms of the way it's distributed, the way it’s consumed,“ he added. “It’s interesting just thinking about the Apple announcement of a few weeks ago, and what the possibilities there — that device lends itself to in terms of sports. So I think it's a business that, you know, we want to stay in.”

Disney already has a partner in ESPN with Hearst, which owns 20% of the sports business.

Iger said a new potential partner for ESPN would have to come to the table with value. 

“Whether it’s content value, whether it’s distribution value, whether it’s capital, whether it just helps de-risk a business to some extent, but that wouldn't be the primary driver,“ he said. “But if they come to the table with value that enables ESPN to make a transition to its direct-to-consumer offering, then we’re going to be very — we’re going to be very open-minded about that.” 

Iger also reiterated that Disney would prefer to own Hulu rather than sell it, possibly to Comcast, which owns a third of the streaming service.

“I spent a lot of time looking at that as part of the future of our streaming business, and ultimately concluded that we would be better off having Hulu than not having Hulu,” Iger said. “And in fact, the plan is for Hulu to be available starting the end of this calendar year as part of the Disney Plus offering. So in terms of the path to profitability of that business, which obviously has tremendous amount of focus on and a lot of attention, combining Hulu and Disney Plus is a major step in that direction.”

The Walt Disney Co. said its board extended Bob Iger’s contract to serve as CEO for two additional years through December 31, 2026.

Iger returned to the company last year as CEO, replacing his successor Bob Chapek.

Iger’s main mandates were to find a long-term successors as CEO and to boost profitability, mainly by cutting losses at the company's streaming business. Iger promptly announced a plan to reduce costs by $5.5 billion, in part by laying off 7,000 of the company’s employees. 

“Time and again, Bob has shown an unparalleled ability to successfully transform Disney to drive future growth and financial returns, earning him a reputation as one of the world’s best CEOs,” said Mark G. Parker, chairman of The Walt Disney Co. “Bob has once again set Disney on the right strategic path for ongoing value creation, and to ensure the successful completion of this transformation while also allowing ample time to position a new CEO for long-term success, the Board determined it is in the best interest of shareholders to extend his tenure, and he has agreed to our request to remain Chief Executive Officer through the end of 2026.”

Iger was a highly successful leader for Disney. During has first 15 years as CEO, the company acquired Pixar, Marvel, Lucasfilm and 21st Century Fox and launched the Disney Plus streaming service.

“Since my return to Disney just seven months ago, I’ve examined virtually every facet of our businesses to fully understand the tremendous opportunities before us, as well as the challenges we’ve been facing from the broader economic environment and the tectonic shifts in our industry. On my first day back, we began making important and sometimes difficult decisions to address some existing structural and efficiency issues, and despite the challenges, I believe Disney’s long-term future is incredibly bright,” said Iger.

“But there is more to accomplish before this transformative work is complete, and because I want to ensure Disney is strongly positioned when my successor takes the helm, I have agreed to the Board’s request to remain CEO for an additional two years. The importance of the succession process cannot be overstated, and as the Board continues to evaluate a highly qualified slate of internal and external candidates, I remain intensely focused on a successful transition,” Iger said.

We’re knee deep in baseball season, the desultory Dog Days of deep summer looming just ahead. Typically about now, sagacious and slightly desperate columnists cast about for theoretical deals that can transform the stinker local team into a contender. 

The streaming wars are reaching a similar place. Fifteen months post-Netflix Great Correction, the streaming landscape is in dire need of approaches other than cutting, shutting, laying off, and licensing out. Nowhere is the angst, and the need for transformative ideas, felt more keenly than with Disney, the world’s biggest and best known media company, now stuck in a nasty damned funk. 

Bob Iger returned as CEO seven months ago, and now is more than a quarter of the way through the two-year contract he signed after the Disney board summarily jettisoned Bob Chapek.

Since then, Iger has faced down two activist investors, seen off fearsome in-house annoyance Ike Perlmutter and 7,000 other laid-off humans, and reorganized the company to give creatives responsibility over their spending. He’s also mothballed or cancelled projects, and is preparing to license others. After all that, shares on the last day of June have risen a scant 31 cents, that’s 0.3% of the $89 or so share price, since 2022 ended. 

In part, that’s because Iger hasn’t fixed the company’s three biggest challenges: what to do with Hulu, what to do with ESPN (and all the rest of its broadcast/cable holdings), and what to do about a successor. But it’s also because of slowing growth at parks and resorts, accelerating cord-cutting for its cable cash cows, and possible blowback over the high-profile tussle with presidential wannabe and Florida Gov. Ron DeSantis. 

The successor question got still more complex with June’s surprise departure of CFO Christine McCarthy, a long-time Iger ally and potential successor. It’s apparently true that McCarthy’s family indeed is facing serious health issues. Yet it’s also been reported that McCarthy wanted even deeper cuts than Iger has been willing to do, which suggests more unpleasant work lies ahead for somebody. 

McCarthy’s departure contributed to Wall Street’s deepening Disney distaste. In response, analysts are devising some seriously creative solutions to the company’s challenges, while employing surprisingly strong language questioning whether Iger, corporate America’s closest thing to a white knight, can fix the company he’s synonymous with.

“My controversial take is that the succession plan should be to sell (Disney) to Apple or someone else, so it becomes a division, so it becomes much easier to fill those seats within a corporate entity,” Needham & Co. Sr. Analyst Laura Martin told me this week. In a recent report, Martin downgraded revenue expectations and spotlighted worsening investor sentiment that’s unlikely to improve soon. 

“….the tone of incoming calls about DIS has shifted distinctly negative, and sentiment has further deteriorated since CFO Christine McCarthy left last week,” Martin wrote. “Our HOLD rating on DIS is based on our belief that consensus estimates for DIS are too high owing to DTC losses and another year of weak earnings from linear TV and box office. Longer-term, we believe DIS's asset mix of both digital and physical assets (i.e., an Omniverse) maximizes its economic value capture, that DIS benefits from generative AI, and that DIS will be a takeover target.”

Martin calls the Disney CEO job is one of the most complex on the planet. For all of Disney’s synergies between theme parks, consumer products, sports and film/TV/streaming, they are different businesses requiring very different managerial skill sets. No one on the horizon (except the departed Chapek) has had anything close to the job’s full range of experience.  

To Martin, selling to Apple also would fix the $3 trillion hardware company’s biggest problem: “It’s been doing an absolute shit job on content. For Apple, either you have to go out in the market and buy storytellers, or you can hire four of the best storytellers on earth, and you get all of their (intellectual property).”

And with $90 billion a year in free cash flow and around $200 billion more in the bank, Apple is one of the few companies with the financial resources to make such a mammoth deal happen, though it’s never spent more on an acquisition than 2014’s $3 billion purchase of headphone maker Beats. 

A deal would further cement the two companies’ alliance announced in early June to create immersive entertainment experiences for the $3,500 Apple Vision Pro headset coming next year, Martin said, while simplifying the job of finding Iger’s replacement. As she pointed out, the company’s been seeking a worthy Iger successor for a decade. 

Whether Iger — a staunch defender of all things Disney who engineered the transformative deals for Pixar, Marvel, LucasArts and most of Fox —  could ever countenance actually selling the company is another, more unknowable question. 

Meanwhile, LightShed Entertainment’s analysts have their own novel suggestions for fixing what ails Disney, contained in a report released just before the holiday weekend. 

At the tactical level, stop interweaving those impenetrable Marvel and Star Wars story lines across dozens of projects, so casual fans can come into either with a vague chance of knowing what’s going on before the show is done. Also, slow the cadence of franchise projects to make each release more valuable. 

“With multiple Marvel movie and TV shows each year, has Disney actually made each piece of content feel like less of a must-see or at the very least, less of a must-see now?” LightShed Partners analyst Rich Greenfield, Brandon Ross and Mark Kelley wrote. Creating new intellectual property, beyond the princesses and delving into the company’s multiplying live-action remakes of its classic animated movies might help, too. 

Bigger picture, the LightShed team suggested two contradictory strategies: 1) integrate Hulu and general entertainment into Disney Plus, so people who aren’t hard-core fans or parents of small children have reason to subscribe, or 2) make Disney Plus just a final repository for all those franchise shows. 

“Disney could refocus Disney Plus as a vault for Disney’s catalog, much the way a consumer’s DVD wall was in the past,” the report suggests. “In this approach, Disney Plus would be where all Disney Plus content ends its life, but never where it starts its life. Movies would go to theaters and then maybe an output deal on Netflix or even offering the next Star Wars series to Max or Prime Video. After an initial licensing window, all content ends up on Disney Plus, where it lives forever and becomes a must-subscribe for families with young kids and Disney franchise super fans.”

Other analysts have weighed in, too, though not always with such radical recommendations. KeyBanc Capital Markets downgraded the company to “sector weight” on Wednesday, citing deepening uncertainties around park attendance, pricing, product differentiation from streaming competitors, the cord-cutting transition, and everything else you’ve read about the last 18 months. 

CNBC analysts Josh Brown and Stephanie Link of wealth-management firm Hightower both chimed in Thursday with negative takes on Disney’s half-year of non-progress, with Brown calling the KeyBanc report a why-bother “clown grade” that offered no new reasons to doubt the end of Disney doldrums. 

“The stock’s been a falling knife for a year,” said Brown, CEO of investment advisory firm Ritholtz Wealth Management. “Cost-cutting is not the issue. The content sucks.

They have serious content issues. That’s the part Bob Iger can fix.” 

Yes, eventually, with time, which Iger doesn’t have in his current contract. 

In fact, with Pixar’s last two films  — Lightyear and Elemental — woefully underperforming, and fan bases for Marvel and Star Wars looking a bit bored with some of the new shows, content will need sustained attention and perhaps a different spending approach (and getting Ryan Murphy back won’t fix the princesses and spandex issues at Disney Plus, and might complicate a Hulu integration). But it won’t happen overnight, or even in the next 17 months.

So the question becomes: does Bob Iger sell, kicking Disney’s manifold issues on to the next buyer? Or does he fundamentally reshape Disney Plus and a fully owned Hulu, while trying to fix everything else? And yes, what is he going to do with ESPN? Thank goodness the analysts have two more months of summer’s Dog Days to come up with more interesting ideas. 

Bob Iger, CEO of the Walt Disney Co., didn’t mince words when asked about the company’s legal battle with Florida Gov. Ron DeSantis.

Disney has sued DeSantis after the governor took steps to assert control over the Reedy Creek Improvement District, the special district where Walt Disney World is located.

“This is about one thing and one thing only, and that is retaliation against us for taking a position on pending legislation,” Iger said after being asked about the situation during Disney’s earnings call Wednesday. “We believe that in taking that position we are merely exercising our right to free speech.”

Iger said that Disney contributes to Florida tourism, is one of the state’s biggest employers with above-minimum wage jobs and pays $1.1 billion in state and local taxes, and yet is being singled out.

“Does the state want us to invest more, employ more people and pay more taxes or not?” he asked.

Iger said Disney has plans to invest $17 billion in Florida over the next 10 years.

Iger noted that Disney is not the only company operating in a special district. He said there are over 2,000 such districts, created to encourage business. One is occupied by Daytona Speedway, another by The Villages, a large retirement community.

“If the goal is leveling the playing field in the uniform application of the law or government oversight of special districts needs to occur or be applied to all special districts,” the Disney CEO said. “There’s also a false narrative that we have been fighting to protect tax breaks as part of this. But in fact we are the largest taxpayer in Central Florida.”

Iger said Disney has had a “terrific” relationship with the state for 50 years.

“While it is easy to say that the Reedy Creek special district that was established for us over 50 years ago benefited us, it is misleading to not also consider how much Disney benefited the state of Florida,” Iger said.

The Walt Disney Co. reported higher fiscal second-quarter profits as it cut its streaming losses and saw big gains at its parks and experiences unit.

Disney’s direct-to-consumer business — streamers Disney Plus, ESPN Plus and Hulu — lost $659 million, down from the $1.05 billion the company lost in the prior quarter. A year ago, the DTC business lost $887 million. 

Disney said DTC losses peaked in third quarter of fiscal 2022, but will increase by $100 million in the upcoming third quarter before continuing to decline.

Direct-to-consumer revenues increased 13% to $5.5 billion from $4.9 billion a year ago as total subscribers to Disney streaming services dipped to 231.3 million from 234.7 at the end of 2022.

On Disney’s previous earnings call, CEO Bob Iger announced a cost-cutting plan designed to reduce expenses by $5.5 billion and eliminate 7,000 jobs. Disney, like other big media companies, shifted its priorities in streaming from adding subscribers to reducing losses and eventually becoming profitable.

“We’re pleased with our accomplishments this quarter, including the improved financial performance of our streaming business, which reflect the strategic changes we’ve been making throughout the company to realign Disney for sustained growth and success,” Iger said. “From movies to television, to sports, news and our theme parks, we continue to deliver for consumers, while establishing a more efficient, coordinated, and streamlined approach to our operations.”

Iger said Disney will offer a one-app experience, letting domestic subscribers watch Hulu content through Disney Plus, by the end of the year. Hulu, ESPN Plus and Disney Plus will continue to be offered as stand-alone services.

“This is a logical projection of DTC offerings that will provide greater opportunities for advertisers while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” Iger said.

Iger also said the ad-supported version of Disney Plus will be rolled out in Europe this year.

On Disney's earnings call, Iger said he expected to meet or exceed his target for cost-cutting.

Disney will also be removing content from its streaming services and expects to take an impairment charge of $1.5 billion to $1.8 billion in the third quarter, chief financial officer Christine McCarthy added.

Disney took a $150 million charge in the second quarter mainly related to severance costs of staff layoffs. There will be additional severance charges of about $180 million over the remainder of the year, she said.

At the end of the second quarter, Disney Plus had 157.8 million subscribers, down from 161.8 million at the end of the last quarter and down from 161.8 million a year ago.

Domestic Disney Plus subscribers fell to 46.3 million from 46.6 million at the end of the previous quarter and 46.6 million a year ago.

ESPN Plus had 25.3 million subscribers, up from 24.9 million in the previous quarter and 24.9 million a year ago

Hulu had 48.2 million subscribers, up from 48 million subscribers last quarter and up from 48 million a year ago. It had 43.7 million SVOD-only subscribers, up from 43.5 million last quarter. Hulu Plus Live TV had 4.4 million subscribers, down 100,000 from the previous quarter and down from 4.5 million a year ago.

Hulu ARPU declined 6% to $11.73 for its SVOD service because of softness in the addressable advertising market, McCarthy said. ARPU increased for Hulu Live TV by 5% to $92.32.

Iger said that Disney will be raising prices on the ad-free tier of Disney Plus in order to incent more subscribers to take the ad-supported tier, which should produce more revenue per user.

"We have only just begun to scratch the surface on what we can do with advertising on Disney plus and I'm incredibly bullish on our long-term advertising positioning," he said.

Disney is leaning into digital and addressable advertising, which now accounts for about 40% of the company's ad revenue.

"We are also focused on the growth opportunity in programmatic advertising, and we are well-positioned to scale if the market improves and audiences continue to grow," Iger said. "We have added more than 1,000 advertisers over the past year and now have 5,000 advertisers across our streaming platforms with over one-third buying advertising programmatically today."

For Disney, second-quarter net income was $1.27 billion, or 69 cents a share, up from $470 million, or 26 cents a share a year ago.

Revenue rose 13%, to $21.8 million

Operating income for Disney Media and Entertainment Distribution fell 42%, to $1.1 billion, as revenues rose 3% to $14 billion.

Operating income for Disney’s linear networks fell 35% to $1.8 billion as revenues dropped 7%. Both cable and broadcast networks saw declines. Cable was hurt by higher sports programming and production costs. Broadcast declines reflected decreases in advertising revenue across the ABC Network and the ABC owned TV stations, McCarthy said.

Second quarter domestic linear advertising revenue declined 10% year-over-year. ESPN ad revenue was up 2%.

"The sports advertising marketplace is currently stable with quarter to date ESPN domestic linear cash ad sales pacing up," McCarthy said. "However, the overall entertainment advertising marketplace has been challenging. While the weakness has moderated somewhat, we anticipate the some softness may continue into the back half of the fiscal year."

Operating income for Disney Parks, Experiences and Products rose 23 to $2.2 billion as revenues rose 17% to $7.8 billion.

There’s no defense, as the Head Ball Coach might put it, like a good offense. Certainly, Steve Spurrier’s University of Florida football teams had oodles of offense, winning multiple conference crowns and the school’s first national championship during a great 1990s run. And being offensive is the irreducible trait and trademark of that other local headline generator, Florida Man.

But even companies headquartered far from Florida are embracing the lesson, especially when their single biggest investment there is facing repeated political punishment from yet another Florida Man, Gov. Ron DeSantis, the state’s foremost culture warrior and presumed 2024 presidential candidate.  

Last week, Disney filed a federal lawsuit accusing the diminutive DeSantis of digging in his high-heeled cowboy boots to illegally retaliate after the company exercised its Supreme Court-validated First Amendment rights to free speech and free spending. Basically, the suit says, DeSantis went after the Mouse House because it questioned an odious bit of political posturing, DeSantis’s 2022 “Don’t Say Gay” bill that limits school discussions of sexuality and gender. 

The suit has big implications for both Disney’s Iger-led transformation, and for DeSantis’s wilting presidential aspirations. That’s the real reason to watch the suit, as its unintended consequences play out for both sides. 

“Don’t Say Gay” is one of a string of DeSantis-backed laws, including one banning abortions after six weeks. They’re all designed to burnish his bona fides with hard-right conservative voters who presumably need compelling reasons to ditch beloved avatar Donald Trump, already campaigning hard for 2024.

The suit is straightforward enough: then-Disney CEO Bob Chapek, after prodding from outraged employees (and a high-profile Iger tweet), said something mildly critical about the Don’t Say Gay law. 

DeSantis and his legislative supermajority responded by trying to hit Disney where it hurt, abolishing the special district the state created decades ago to give Disney greater control over development of a vast swathe of Central Florida swampland. 

Billions of dollars later, that swampland is now better known as the Magic Kingdom. Disney investments in the Orlando area now employ around 75,000 people, and bring tens of billions of dollars in tourism annually to the region.

The back-and-forths since the initial bill have been amusing to watch from afar, but the important thing here is that they’ve continued, even escalated. Given continued DeSantis threats — like promising to raise taxes, increase ride inspections and even build a prison next to Walt Disney World —  the retaliation lawsuit may be the last, best option for the Happiest Place on Earth to stay that way. 

The reality is that Disney needed to find a way to stop what looks like pretty clear-cut political retaliation that could get worse if DeSantis continues to double down. Both state-level regulators and the replacement special district have lots of ways to make the Magic Kingdom much less so. The tools for mayhem against a political enemy are manifold for a motivated pol and his pals, as DeSantis is demonstrating. 

Except, in a ham-handed deviation from standard political practice, DeSantis has bragged publicly and repeatedly about the targeted paybacks. Normally, as you stick the knife in, you don’t talk about it to everyone who’ll listen. 

See also, Lyndon Johnson, a grandmaster of no-fingerprints retribution. As just one epic instance, a couple of years after Amarillo became the only Texas city to vote against native son Johnson in 1964, its huge Air Force base was shut down as surplus … in the middle of the Vietnam War. The city took two decades to recover. 

DeSantis had other motivations for announcing his plans, mostly to signal that he can corral and cudgel a giant “woke” corporation espousing views antithetical to family values. You know, like Disney. 

But DeSantis’ lack of discretion, many First Amendment poobahs have opined, should make Disney’s case fairly straightforward and expensive for the state. Whether it ends up being expensive for DeSantis specifically, or for what Iger is trying to do at Disney, is what will play out in the next several months and beyond.

DeSantis, for one, is already checking off all the pre-campaign prerequisites to run for president: write a book, build foreign-policy cred by visiting U.S. allies such as Israel and Japan, push a bunch of high-profile bills through a pliable legislature. Also, line up prominent politicians and, especially, donors to finance your actual campaign. 

While Trump has relentlessly cultivated members of Congress and deep-pocketed donors, DeSantis has been beating up on Disney and not cultivating those backers. Going forward, his tardy cultivation process now gets to split time with depositions, discovery and distractions over divulging lots of previously secret communications with cronies. 

It’s impossible to know what might be tucked away in DeSantis’s text messages, emails and other communications, but private messages have proved problematic in other situations in the past. Just look at the brand murder that Fox News inflicted on itself in the just-settled Dominion libel case. The summarily dispatched Tucker Carlson was just one victim of the fallout, though hardly a blameless one. 

But this escalating fight has implications for Disney, too. 

Remember that Iger has a two-year clock ticking since his Thanksgiving eve return. As I’ve written previously, he has a lot to get done, not least finding some more politically adept executive than Chapek to succeed him as CEO at the end of 2024. 

He, too, will have a new set of distractions, depositions and discovery to deal with, while managing everything else. Is this really the highest and best use of Iger’s dwindling time back on top? How does the suit and related political strategizing impact the choice of Iger’s successor? Do they need to know not just movie and TV production, streaming video, sports rights, cruise lines, parks, consumer merchandise and video games, but politics, too?   

SuperBob is still probably more than up for the task, even at age 72, but he might actually break a sweat juggling it all.

Another Iger checklist item also played out this past week, as 4,000 employees were laid off from ESPN, parks and other operations, part of Iger’s larger streamlining plan to cut Disney’s workforce about 3%, get finances back in the black and resume paying a dividend to shareholders. 

The company has said it plans to spend another $17 billion developing attractions in the Orlando area. Disney also has been moving many parks and resorts employees to offices there. Now, all that’s potentially on hold too, given the DeSantis-driven regulatory uncertainty.  

DeSantis may have pushed through Don’t Say Gay for near-term political advantage. Chapek may have responded poorly while similarly expecting everything would quickly blow over. 

But the effects of repeated tit-for-tat, the stakes for a presidential wanna-be and now a massive lawsuit, will continue to play out in Florida for years to come, long after DeSantis and Iger are gone. As even the Head Ball Coach would acknowledge, even a great offense doesn’t guarantee the kind of win either side would want. 

The Walt Disney Co. this week is starting to implement the layoff of 7,000 employees planned by CEO Bob Iger as part of his effort to bolster profitability at the company.

Employees impacted in the first of three waves of layoffs are being contacted over the next four days, Iger said in a memo to staff.

The next round of layoffs will happen in April. That will be the largest round of staff reductions.

The company expects to complete the layoffs before the beginning of summer, Iger said, adding that the company aims to make to process “supportive and smooth.”

Iger announced plans to restructure the company and cut costs during the company’s fourth-quarter earnings call in February. At the time, Disney was under pressure from an activist investor who wanted it to take steps to boost profits and raise the prices of Disney shares.

“As I shared with you in February, we have made the difficult decision to reduce our overall workforce by approximately 7,000 jobs as part of a strategic realignment of the company, including important cost-saving measures necessary for creating a more effective, coordinated and streamlined approach to our business,“ Iger said in the memo. “Over the past few months, senior leaders have been working closely with HR to assess their operational needs, and I want to give you an update on those efforts.

“The difficult reality of many colleagues and friends leaving Disney is not something we take lightly,” he continued. “This company is home to the most talented and dedicated employees in the world, and so many of you bring a lifelong passion for Disney to your work here. That’s part of what makes working at Disney so special. It also makes it all the more difficult to say goodbye to wonderful people we care about.”

Iger asked staffers who aren’t impacted by the layoffs to continue delivering exceptional entertainment to audiences and guests around the world. 

“I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward,” he said. “I ask for your continued understanding and collaboration during this time.”  

Disney shares were trading at $94.93, up nearly 1%,  in midday trading Monday. ■

It’s a mark of just how treacherous the shoals are in the streaming-video business these days that even the original smooth operator, The Walt Disney Co.’s once and current CEO Bob Iger, told investors last week that it’s anything but smooth sailing right now even for the biggest media company in the world. 

“The environment is very, very tricky right now,” Iger said at the Morgan Stanley Technology, Media and Telecom Conference. “And before we make any big decisions about our level of investment, our commitment to that business, we want to know where it could go. The whole streaming business, other than Netflix, which is relatively mature, is a nascent business for most of us.”

Nascent, and increasingly nasty in terms of expectations from those investors, who now want everyone to start making money by — gulp! — next year. Iger has said Disney will get there, and maybe they will because … you know, Bob Iger, the name that soothes and smooths every media investor’s fevered brow. 

But for everyone else, I keep thinking of Gollum hissing about the “tricksy” hobbits in The Lord of the Rings (the films, not the hugely expensive Amazon spinoff series). 

First, those fur-footed investor hobbits wanted growth at all costs, spending be damned! Get lots of shows on the air, despite a globe-girdling pandemic, and drive millions of subscription signups and market share! 

Then Netflix, almost exactly 11 months ago, had a hiccup, and everyone else in the industry contracted long COVID. Tricky! Or tricksy, because the investor hobbits suddenly wanted assurances that all those investments at sky-high valuations would lead to a reliable return on investment. 

Except Hollywood hasn’t been good about a consistent return on investment for, hmmm, 110 years. Streaming promised to reduce costs, extend reach and create direct relationships with consumers that could be exploited in lots of ways. 

For now, though, Iger had another useful observation to deeply discomfit the hobbit investors in their well-appointed hidey-holes. Every company wants to turn substantial profits, increase subscriber counts by tens of millions of viewers and create new business opportunities. 

“It can’t possibly happen,” Iger said. “There are six or seven well-funded, aggressive streaming businesses out there, all seeking the same subscribers, in many cases competing for the same content. Not everyone’s going to win.”

That’s Iger-speak for the great consolidation heading our way. Disney’s next contribution to that consolidation — what to do with friggin’ Hulu — is on hold, Iger said.

“We’re really studying the business very, very carefully,” he said. “We have a good platform in Hulu. We have very strong original programming, highly awarded original programming, some delivered by FX, which is great.”

But whether to spend more than $9 billion to buy out Comcast’s minority share by next year, or sell the whole thing to Comcast or to some other (increasingly unlikely) buyer, remains a tricky question indeed. 

Doin’ the Collapse

And talk about tricky. Look at the studio where those Lord of the Rings movies were filmed, now called Warner Bros. Discovery. 

Rather than further hike prices when it merges thousands of hours of Discovery Plus reality shows into the estimable (and already expensive) HBO Max, customers will finally get more for nothing more. Tricky!

Presumably, this will lead to the further deaccessioning of some of the high-end cool stuff on HBO Max that only appeals to snobs like me, and even more cheap and disposable “companion” TV like Discovery’s entire oeuvre. It also likely will lead to the eventual death of Discovery Plus, which never had a big reason to exist anyway. 

Further adding to the background noise is the shockingly fast shutdown Friday of Silicon Valley Bank by regulators, a shutdown with outsized impacts across the tech heartland for which it is named. 

Will the regulator takeover impact entertainment, too? Probably, though indirectly in most cases. 

After all, who still had billions of dollars to spend on oodles of streaming shows, regardless of return on invested capital? Tech companies such as Netflix, Apple and Amazon, that’s who. No one’s worried about those companies covering payroll amid a prolonged SVB shakeout. 

The same can’t be said for hundreds of smaller tech companies, many of which have been helping entertainment companies figure out the brave new world of streaming video. Their products and services provide better ad targeting, enhanced customer support and retention, and AI tools for everything from script development to video editing to show recommendations. 

That’s not even including the whack to Roku. The company had close to half a billion dollars on deposit at Silicon Valley Bank. Now it’s stuck in transition, part of whatever happens to the $209 billion in assets the bank held just a few days ago (For comparison, Disney's market capitalization is just $171 billion). Ouch! Talk about tricky times. 

Roku said it has sufficient cash and cash flow to hobble through, but that’s a whack, regardless. Worse, regulators said Friday that they’re not pursuing a bailout of SVB’s many, many large depositors like Roku. 

Welcome to the new job, newly announced Roku chief financial officer Dan Jedda! He already was charged with repairing Roku’s frosty Wall Street relations over its non-apparent global expansion plans and OTT ad-sales strategies. That was going to be a challenge even without SVB limbo. 

(On Sunday night, federal regulators announced a plan that would cover all the assets on deposit for Roku and other Silicon Valley Bank customers, as well as those of just-closed Signature Bank in New York.) 

I’ll tell you what’s not getting tricky, though. 

What, Pro Wrestling and Fox News Are Fake?

That would be Fox News Channnel’s apparently immutable audience. That’s despite the festering cancer of repeated revelations detailing the contempt many in the organization have for said audience and their risible adherence to the Big Lie stolen-election meme. 

The $1.6 billion defamation lawsuit against Fox and some of its key personalities by Dominion Voting Systems may not, eventually, overcome U.S. libel-law protections. Fox likely will stagger away with most of its wallet still intact.

But in the meantime, the lawsuit’s discovery process has fed a steady, deeply acidic drip line of revelations that would make a journalism school dean weep. Internal text messages, memos and emails detail how even Rupert Murdoch cared far less about, you know, what happened in the 2020 election than keeping the rubes happy by repeatedly perpetuating and amplifying Big Lie narratives. 

That elevation of lucre over journalism almost certainly contributed mightily to the Jan. 6 Capitol Hill riots, for which hundreds of aggrieved Trump fans/seditious rioters have now been successfully prosecuted. The prosecutions keep mounting no matter what director’s cut of Capitol Hill tourism videos may have been laughably screened this week by Fox News chief fabulist Tucker Carlson. 

It’s possible that the knowing Big Lies offered by Carlson and others also injured Dominion’s ability to sell voting machines, though legal experts doubt the impact is $1.6 billion worth of defamation. We’ll leave that to the courts to sort out. 

What’s not being affected by the drip line of deception? The sturdy adulation and repeated tune-in of its 4 million or so regular viewers. Despite the even more unhinged “stories” beckoning from its underfunded competitors populating the wingnut fringe, Fox News keeps powering on with the biggest, most lucrative and most reliable audience in cable TV. 

Say what you will (and Fox News stars apparently do say whatever they will), Fox News and its audience are the Rolling Rock of cable TV: Same As It Ever Was. And there’s something weirdly comforting about that in this tricky time. ■

Disney CEO Bob Iger said streaming is a business in which not everybody’s going to win.

Speaking at the Morgan Stanley media investment conference Thursday, Iger noted that other companies at the conference had all predicted that their streaming business would be highly profitable in a couple of years and that they will increase their sub counts by tens of millions.

“It can’t possibly happen,” Iger said. “There are six or seven well-funded, aggressive streaming businesses out there, all seeking the same subscribers, in many cases competing for the same content. Not everyone’s going to win.”

Iger wanted investors to know that they can count on Disney emerging as a winner.

“I am extremely bullish on some of our streaming prospects, notably Disney Plus, which grew at such a meteoric rate,” Iger said. 

He said that in order to make the direct to business profitable Disney had to rationalize costs  and attract more subscribers. “I think one of the key things that we have to figure out is a pricing strategy that makes sense,” he added. “In our zeal to grow global subs I think we were off in terms of that pricing strategy and we’re now starting to learn more about it and adjust accordingly.”

Also Read: Wall Street Welcomes Bob Iger’s Plan To Slash Costs at Disney (UPDATED)

Disney also controls Hulu and will have to make a decision by next year about whether or not to buy out Comcast’s 35% stake in the business for upwards of $9 billion.

“We’re really studying the business very, very carefully,” Iger said. “We have a good platform in Hulu. We have very strong original programming, highly awarded original programming, some delivered by FX, which is great.”

Also Read: Buy? Sell? Analyst Suggests Disney, Comcast Go 50-50 On Hulu

Hulu is also very attractive to advertisers, he added. 

Iger previously said that either buying Comcast’s stake or selling all of Hulu was on the table. Comcast president Michael Cavanagh similarly said he’d be happy selling Comcast stake to Disney under their existing agreement, but he’d be open to other arrangements.

“The environment is very, very tricky right now and before we make any big decisions about our level of investment, our commitment to that business, we want to know where it could go,” Iger said. “The whole streaming business, other than Netflix, which is relatively mature, is a nascent business for most of us.”

The maturing of the streaming business is coming at the same time as a lot of people are still consuming media on traditional platforms. 

“I’ve said publicly that the future of linear, I don’t believe is very bright and eventually everything will migrate to streaming. We’re not quite there yet. And so you have an erosion of a traditional platform and its economics and some growth in the new platform but not the kind of compelling growth it will all need to be profitable. It’s just a tricky period of time,” he said. 

Iger noted that it was possible that Hulu was a good fit with Disney’s other assets as it shifts its strategy from funneling all of its content to its streaming properties to a more balanced approach.

“It’s already clear to us that the exclusivity that we thought would be so valuable in growing subs, well, it wasn’t as valuable as we thought,” he said. Content can actually exist on on a traditional platform and the streaming platform quite well without doing damage to either one.”

He pointed out that the comedy Abbott Elementary has a very different audience when it airs on ABC compared to when it streams on Hulu. 

“The media age on ABC is substantially higher than the median age of the Abbott Elementary viewer on Hulu by about 30 years,” he remarked.

He said having show like that on both platforms would help amortize the cost of content better and there would also be a positive marketing impact. The Fox animation shows including The Simpsons remain among the most popular shows streaming  on Disney Plus, even though they’ve all been seen on the Fox network, he added. 

Iger also talked up the future of ESPN. “One of the reasons we’re optimistic is we know theI power and popularity of live sports, not just to consumers but to advertisers,” he said.”ESPN’s ratings have actually held up nicely particularly when you consider the erosion of the platform that they’re on.”

ESPN Plus at this point is a flanker to the ESPN brand, but “down the road, at some point, I think it’s inevitable, because of what’s happening with the media world and technology, ESPN will become a direct-to-consumer business. 

At a time when the business model for the regional sports networks appear to be crumbling, Iger was upbeat about ESPN.

“When you combine the strengths of live sports and the brand and the value of advertising, you can create a business tha’s not subscriber dependent but dependent on advertising and subscriber revenue. I think there’s reason to be bullish.

One of Iger’s most important job returning to Disney for a second terms as CEO is to take another shot at picking a successor. 

“I’m confident that we’ll identify the right successor at the right time,” he said. ■

National Basketball Association commissioner Adam Silver is on the list of possible successors to The Walt Disney Co. CEO Bob Iger, according to a Fox Business report.

In addition to Silver, the hist included Dana Walden, co-chair of Disney Entertainment, and former Disney executive Kevin Mayer.

Iger stepped down as CEO of Disney in 2020, naming Bob Chapek, the head of the company’s parks division as his replacement. Chapek faced the pandemic and has a number of missteps, leading Disney’s board to bring Iger back 

The board said one of Iger’s mandates was to identify a successor within two years.

Disney and the NBA are in business together, with ESPN televising regular season games and ABC broadcasting the NBA Finals. Iger is a big sports fan and was reportedly putting together a group to buy an NBA team.

Silver became commissioner of the NBA in 2014, succeeding David Stern. He spent eight years as president of NBA Entertainment. His contract with the NBA runs through 2024, according to Front Office Sports.

Walden was named one of Disney’s top executives in Iger’s reorganization of the company, which was designed to give creative executives more control. She recently named her own senior executive team. She joined Disney when it acquired 21st Century Fox.

Before leaving Disney, Mayer was a key executive in the launch of Disney Plus. Since leaving, he has been CEO of TikTok and now runs Candle Media, which has been buying up production companies.

Other Disney execs that Fox Business listed as possible internal contenders include Alan Bergman, the other co-chair of entertainment, Josh D’Amaro, chairman of parks and resorts, and Jimmy Pitaro, president of ESPN. ■

Bob Iger brought the Mighty Thor’s ax, Stormbreaker, to his first earnings call since returning as CEO of The Walt Disney Co., and Wall Street loved it.

Moving quickly and taking big swings, Iger announced a restructuring of the company into three core business units and plans to cut $5.5 billion in costs at the company, a move that will eliminate 7,000 jobs.

All those cost reductions and cuts might just literally pay dividends for Disney shareholders, who stopped getting dividend checks during the pandemic.

The carnage thrilled analysts. It even appeared to satisfy Nelson Peltz, the activist investor who started a proxy war to get a seat on Disney's board. Peltz went on CNBC Thursday to say the proxy war was over. "Disney plans to do everything we wanted them to do," Peltz said. 

Disney's board greeted Peltz's decision with a statement: “We respect and value the input of all our shareholders and we appreciate the decision by Trian Fund announced by Nelson Peltz this morning," the board said. "We are pleased that our Board and management can remain focused without the distraction of a proxy contest, and we have tremendous faith in Bob Iger’s leadership and the transformative vision for Disney’s future he set forth yesterday." 

Disney shares were up more than 2% in midday trading Thursday.

“Everything the bulls wanted” was the takeaway from Wells Fargo media analyst Steven Cahall.

“Bob Iger returns by delivering the goods: cost cuts … pulling the Disney Plus sub guidance, curating the content strategy, ring-fencing ESPN, promising to have a dividend this year and reaffirming high-single-digit growth in fiscal year 2023 operating income,” Cahall said. “While the future isn’t 100% certain, the strategy is: profit.”

Cahall raised his target price for Disney stock to $141 a share from $125 a share. (Disney closed Wednesday at $11.78 before the earnings were announced.)

“Restoring the Magic” was the headline on a report by Evercore ISI media analyst Vijay Jayant. He raised his target for Disney stock to $130 from $115.

Jayant noted that the cost savings Iger announced were “meaningfully higher than expectations.”  He added that the $3 billion in nonsports content cost reductions “are protracted and the incremental savings will not impact the business until 2024/25.”

The analysts noted the change in the way Disney will be approaching its direct-to-consumer business during Iger’s second term

“As expected Disney is no longer providing sub guidance on DTC,” Jayant noted. Analysts did not think that the targets Disney had set for having 240 million Disney Plus subscribers by 2024 was attainable. Disney solved that problem by saying it was out of the prediction business when it came to subscriber growth.

“Management is targeting long-term margins higher than previously expected,” Jayant noted. “The company aims to hit this target by pulling back on general entertainment content, focusing on franchise content spend and monetizing brands across all opportunities compared to pure DTC subscriber growth.”

On the earnings call. Iger defended his purchase of 21st Century Fox and criticized his successor, Bob Chapek, for taking financial control out of the hands of Disney’s creative executives. 

“I have always believed that the best way to spur great creativity is to make sure that people who are managing the creative processes feel empowered. Therefore, our new structure is aimed at returning greater authority to our creative leaders and making them accountable for how their content performs financially,” Iger said. 

“Our former structure severed that link and it must be restored,“ he said. ”Moving forward, our creative teams will determine what content we are making, how it is distributed and monetized and how it gets marketed. Managing costs, maximizing revenue and driving growth from the content being produced will be their responsibility.” 

Details of how that will be managed will be forthcoming.

Iger also responded to questions about the future of ESPN, whose linear business is under the same cord-cutting pressure as Disney’s other broadcast and cable properties.  

In the new corporate structure, ESPN stands alone as one of the company’s core business units, along with entertainment and parks.

“The brand of ESPN is very healthy, and the programming of ESPN is very healthy,“ Iger said. “We just have to figure out how to monetize it in disrupting and a continuing or disrupting world. That’s it.”   

“But we are not engaged in any conversations right now or considering a spinoff of ESPN,” he added. “That had been done, by the way, in my absence. And I am told the company concluded after exploring it very carefully that it wasn’t something the company wanted to do.”

Iger was also asked when ESPN would be available as an a la carte streaming product.

“Regarding ESPN and when we might make the shift, if you are asking me, is the shift inevitable, the answer is yes,” he said. “But I am not going to give you any sense of when that could be because we have to do it obviously at a time that really makes sense for the bottom line. And we are just not there yet. And that’s not just about how many subscribers we could get. It’s also about what is the pricing power of ESPN, which obviously ties to the menu of sports that they have licensed.” ■

The Walt Disney Co. CEO Bob Iger promised a “transformation” of the company following a fiscal first quarter in which the company lost more than $1 billion on its direct-to-consumer business and the number of subscribers to Disney Plus fell for the first time.

A new structure has the company divided into three core business segments, one for
entertainment, headed by Alan Bergman and Dana Walden; one for ESPN, headed by Jimmy Pitaro; and one for the theme parks, helmed by Josh D'Amaro. Despite a structure that might invite questions, Iger said the company was not considering a sale or spinoff of ESPN.

Iger also said the company will be making big cost cuts totaling $5.5 billion and 7,000 jobs. The cuts include $3 billion in content costs, not including sports. 

The aggressive changes come with activist investor Nelson Peltz breathing down Disney's neck. Disney stock price rose more than 5% in after-hours trading.

“After a solid first quarter, we are embarking on a significant transformation, one that will maximize the potential of our world-class creative teams and our unparalleled brands and franchises,” Iger said. “We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders.”

Disney’s direct-to-consumer streaming business lost $1.05 billion in the quarter, nearly double the year-ago loss of $593 million. Direct-to-consumer revenue rose 13% to $5.3 billion.

“Since my return, I have drilled down into every facet of the streaming business to determine how to achieve profitability and growth,” Iger said. “So with that goal in mind we will focus even more on our core brands and franchises which have consistently delivered high returns aggressively. Our general entertainment content, will reassess all markets we have launched in and also determine the right balance between global and local content. We will adjust our pricing strategy including a full examination of our promotional strategies. We will fine-tune our advertising initiatives on all streaming platforms.”

Iger added that the company could increase the use of legacy distribution opportunities to increase revenue and more effectively market content.

The cost-cutting plan will result in a reduction of annualized non-content related expenses of $2.5 billion, chief financial officer Christine McCarthy said. She said 50% of the cuts will come in marketing, 30% in labor and 20% in technology procurement.

At the end of the first quarter, Disney Plus had 161.8 million subscribers, down from 164.2 million at the end of the last quarter and 164.2 million a year ago

Domestic Disney Plus subscribers edged up to 46.6 million from 44.5 million at the end of the previous quarter and 46.4 from a year ago.

ESPN Plus had 24.9 million subscribers, up from 24.3 million in the previous quarter and 24.3 million a year ago

Hulu had 48 million subscribers, up from 47.2 million subscribers last quarter and up 2  from a year ago. It had 43.5 million SVOD-only subscribers, up from 42.8 million last quarter and up 2% from a year ago. Hulu Plus Live TV had 4.5 million subscribers, adding 100,000 subscribers from the previous quarter and up from 4.4 million subscribers a year ago.

Net income for the quarter rose to $1.279 billion, or 70 cents a share, compared to $1.1 billion, or 63 cents a share a year ago.

Revenues rose 8%, to $23.5 billion.

Disney’s Media and Entertainment Distribution division posted an operating loss of $10 million, compared to income of $808 million. Revenue rose 1% to $14.8 billion.

Operating income at Disney’s linear networks fell by 16% to $1.255 billion. Revenues fell 5% to $7.293 billion.

Domestic channel revenue fell 1% to 6.1 billion. ABC has lower advertising revenues, but showed an increase in affiliate revenue. ■

As The Walt Disney Co. gets closer to announcing earnings on Wednesday and holding Bob Iger’s first call with analysts since his return to the company, predictions about what will transpire are heating up.

Evercore ISI media analyst Vijay Jayant is expecting Disney to beat consensus expectations with its first-quarter numbers. More importantly, Jayant is predicting Iger will come through on the cost cuts Wall Street and investors are looking for.

“There is an opportunity for Disney to use the current advertising downturn to take cost out of the linear business,” Jayant said. 

He estimates that if Disney cuts costs to the same degree as NBCUniversal has planned for 2023, that could translate into $1.3 billion in savings over the next several years.

“Additionally, there is opportunity for Disney to improve studio results through a combination of rerouting some direct-to-streaming movies to theaters, better execution and potential windowing changes,” Jayant said. “We see an opportunity to improve studio result by about $500 million by returning the studio to 2020/2021 levels of profitability over the next five years.”

A report by Bloomberg suggested that Disney is also considering licensing some of its films and movies to third parties in an effort to generate additional revenues.

Jayant has raised his fiscal first-quarter estimate for Disney revenue to $23.7 billion, which would be up 17.7% from last year. He lowered his estimate for operating income to $2.2 billion.

The numbers might not be the most important thing Wall Street is looking for.

“We expect 1Q fiscal year 2023 results will take a backseat to management’s updated strategic and operational visions following the recent leadership change and ongoing proxy battle with an activist,” RBC Capital Markets analyst Kutgun Maral said. “Given Bob Iger’s return as CEO was less than just three months ago, we assume the full contours of the new plan are still being shaped and could take more time to be fully articulated to investors.”

In broad strokes, Maral also is looking for a path to direct-to-consumer profitability, a company-wide cost transformation initiative, particularly at the linear networks, and upping operating income growth.

Maral is also looking to see how Iger restructures the company’s media and entertainment division. Iger has said his goal was to give creative executives more control. “From the outside, it’s sometimes difficult to appreciate what implications a profound shift like this might have on a company,” Maral said. “What does management expect?”

On another big-picture issue, Maral does not think this is the right time to spin off ESPN. 

Across linear, we think it would be a highly difficult and complicated process to separate ESPN from the rest of the company’s portfolio,” he said. “Perhaps more importantly, we think Disney is still in the early days of tapping into the opportunity with streaming sports and the benefits of being able to drive the broader Disney DTC bundle with Disney Plus and Hulu.”

Maral continues to think Disney will report revenue of $23.3 billion for the quarter — a bit lower than the Wall Street consensus — and operating income of $2.51 billion, 2.8% below consensus.

He predicts net added subscribers to core Disney Plus will come in at 1.5 million, also lower than the consensus of 2.2 million. 

Despite the pessimism about Disney’s first-quarter numbers, he considers himself bullish on the stock. Maral set a target price of $130, up from Friday’s close of $110.71.

Last week, in a letter to shareholders urging them to support the company’s slate of directors and reject a bid by Nelson Peltz for a seat on the board, Disney said the board is currently “overseeing important strategic changes that our CEO Bob Iger is executing, such as putting more decision-making into the creative teams, implementing a cost reduction plan, prioritizing streaming profitability and improving the guest experience in our parks.”

On the other hand, Peltz “has demonstrated that he does not understand Disney’s businesses and he lacks the perspective and experience to contribute to the objective of delivering shareholder value in a rapidly shifting media ecosystem,” the letter said. “We are skeptical of his motives and believe he would be disruptive at a crucial period for Disney.” ■

Making his most expansive (semi-) public comments yet since reclaiming the chief executive role from Bob Chapek last week, Bob Iger assured a gathering of Disney employees Monday morning that a rumored buyout of the media conglomerate by Apple is "pure speculation." 

“We never comment about acquisitions or divestitures," Iger said. "You can quickly get into a lot of trouble there, and I don’t want to leave this job and end up in jail, actually."

Iger also stressed that Disney must now focus on improving the monetization of its streaming portfolio and less on building scale. 

Meanwhile, disabusing anyone from the notion that Disney will embark on a retreat to traditional media formats similar to the path taken by David Zaslav and Warner Bros. Discovery, Iger conveyed that he's doubtful about the remaining future of linear television. 

And a recently imposed hiring freeze will not be lifted in the near-term future, he added. 

Also read: Now That Bob Iger Has Taken Over, Is This the End of Disney’s Streaming-First Strategy? (Bloom)

The comments were leaked during a 9 a.m. Burbank-time "town hall" meeting at Disney headquarters, with leaks gathered via Twitter and CNBC, among other media platforms. 

Trying to establish a bit of levity, Iger joked that his wife, USC Annenberg dean Willow Bay, asked him to return to the Disney CEO role in order to distract him from a U.S. Presidential run. 

Disney made a shocking announcement eight days ago that the popular Iger, now 71, would return as CEO, while ousting the man who replaced him in the top role nearly three years ago, Bob Chapek. 

The Disney board's decision came just days after Chapek reported industry-leading scale for Disney streaming services, with Disney Plus, Hulu and ESPN Plus combining for 235 million subscriptions worldwide. 

But that reach has come with a price -- Disney also announced losses of nearly $1.5 billion in the third quarter on building its direct-to-consumer platforms. 

Iger's first move as restored CEO was to fire Kareem Daniel, who headed a centralized reporting structure for Disney's creative efforts. Iger said on Monday that it will take time to develop a new blue print. He said he's working on that with Disney's chairman of general entertainment content, Dana Walden; Disney Studios head Alan Bergman; ESPN president Jimmy Pitaro and CFO Christine McCarthy. ■

In the camel back’s final straw that was Bob Chapek’s disastrous Disney earnings call earlier this month, one number stuck out: the $1.5 billion the company lost on streaming last quarter. Ouch. 

Now Hollywood’s favorite CEO, Bob Iger, is back in charge, promising to fix all that ails the Mouse House, first by reversing Chapek’s company reorganization that enraged Disney creative executives. But giving all those creatives the power to say “yes" again doesn’t fix the bigger issue. 

Also read: Iger Calls Apple M&A 'Pure Speculation,' Says Disney Must Now Focus on Streaming Profits, Not Scale

Basically, Disney is spending way more money than it’s bringing in from the streaming services that both Bobs said were the company’s future. At the same time, its many legacy businesses are making less than expected.

Does Iger pull back on the promises to Wall Street both he and Chapek made of reaching break-even on streaming spending by 2024? Does he repeal Chapek’s projection of up to 260 million subscribers by then? Should the company sell more projects to other outlets, or make fewer shows for its streaming services? For that matter, is streaming still the future of the company? How much should the company be investing in streaming while it’s still milking ESPN, ABC, Freeform and theatrical movie releases, never mind its prodigious parks & resorts, consumer products and other divisions? 

It’s a crucial set of questions for Iger to solve, right after that big one at the top of his list: Find a permanent successor.

But it won’t be a simple solve. As former HBO executive Charles Schreger, now an NYU marketing professor, put it to NPR’s Marketplace, “Streaming is a terrible business.”

Or is it? That’s what Iger has to figure out as the entire industry goes through a fundamental reconsideration, and investors demand profits sooner than once promised. 

After Netflix’s equally disastrous earnings call back in April, it went through a wrenching bunch of changes to clean up its messy balance sheet. 

Now, Netflix is adding subscribers again, and more importantly, making money again, with nearly $500 million in free cash flow last quarter on $7.9 billion in revenue.  For everyone else, this Streaming Transition Thing has been a lot more challenging. 

As Netflix put it in its third-quarter earnings investor letter, “… it's hard to build a large and profitable streaming business — our best estimate is that all of these competitors are losing money on streaming, with aggregate annual direct operating losses this year alone that could be well in excess of $10 billion, compared with our +$5-$6 billion of annual operating profit.”

Netflix remains focused, mostly, on its pure-play streaming approach, though with some new wrinkles like that ad-supported tier. 

It’s even forgoing easy money like a potential box-office bonanza from the Knives Out sequel, Glass Onion. Rather than a long run in thousands of theaters, Netflix is giving it a one week in a few hundred screens before bringing it to its 223 million subscribers. For Co-CEO Ted Sarandos, the real win is delivering a hugely appealing movie to those paying customers his company already has, giving them another reason to stick around. ■

Compare that to Warner Bros. Discovery, which is leaning into its past as it struggles with $48 billion in debt,. CEO David Zaslav has been dumping direct-to-streaming originals and day-and-date simultaneous movie releases and other such experiments, and focused on milking the old stuff as long as he can. 

Given the modest scale of HBO Max (roughly a third of Disney Plus in subscribers), and WBD’s many financial limitations, maybe he’s right. 

So what does Bob Iger supposed to do with streaming? He helped inaugurate streaming’s modern era when Disney Plus launched three years ago and quickly rocketed past100  million customers. 

Perhaps rather than swinging a mouse-eared version of Zaslav’s meat cleaver, Iger will gently shift Disney’s various streaming services to a more modulated approach. Whatever Iger’s reorganization becomes, it will still need to figure out what goes to streaming, and what goes somewhere else first. This month’s movie debuts will certainly give him much to consider. 

Marvel’s Black Panther sequel, Wakanda Forever, topped the long holiday weekend again, pushing its theatrical gross to $675 million worldwide, after just three weeks in theaters.

BoxOfficeMojo.com says,the Black Panther sequel is already 16th in domestic grosses among the 30 Marvel Cinematic Universe releases (not counting Black Widow, which went straight to streaming deep in the pandemic last year).

Contrast that with another Disney film’s disastrous debut this weekend, the animated Strange World. It limped out of theaters with a barely-there $18.6 million domestically, and could lose $100 million on its theatrical release. Should Strange World have just bypassed theaters for Disney Plus, and saved those tens of millions of dollars spent on a traditional marketing push? 

Zaslav may not want to hear it, but Iger may conclude some projects make more sense with traditional (expensive) theatrical releases, but others do better on streaming. While Iger wants to empower his creatives, he’ll also need a nuanced approach to all the $33 billion the company spends on content. 

Marvel and Star Wars films do great in theaters, family programming not so much lately. Also, maybe there’s reason to pull back on some of the incessant cadence of Marvel and Star Wars streaming-only series. Or perhaps some of those series would do better if they were sold to competitors (much as Sony is doing with some Spider-Man shows), expanding the franchise reach and overall profitability. 

No doubt the Disney strategy on movies, TV shows, and streaming projects needs further evolution. More nuanced thought about what goes where, and yes, more attention to the bottom line of revenues and not the top line of new subscribers, will be on tap. Good thing Iger’s supposed to be the king of nuance. He’ll need it.  

So Bob Iger’s evil plan actually worked. Rather than ruin his golden-boy image as America’s favorite CEO when the pandemic and its planet-changing impact loomed over everything The Walt Disney Co. does, Iger suddenly handed control of the most respected media company on said planet to his stolid No. 2 and headed off to something like retirement. 

Except Iger never really let go of control. Think of his time on the sidelines as more a secret sabbatical while successor Bob Chapek grappled with closed parks and resorts, infected cruise ships, empty movie theaters and no sports on ESPN, all while managing (not always effectively) the complex and expensive transition to streaming. 

Read our complete Disney executive transition coverage:

* Bob Iger Wastes No Time With Reorganization at Disney

* Disney Stock Price Jumps Following Return of Bob Iger

* Bob Iger Takes Pay Cut in Return as Disney CEO

* Disney Stock Price Jumps Following Return of Bob Iger

* Bob Iger Replaces Successor Bob Chapek As Disney CEO

Iger remained as executive chairman for most of the next two years, then meddled from afar in various ways, holding forth at investor conferences, tweeting at inopportune times, allowing supposedly private and definitely tart criticisms to resurface in public media. 

Now, just as suddenly, Iger’s back, Chapek’s gone, and Disney is … where? 

Still in a complex mess amid an economic slowdown, with a bunch of problems that Iger probably won’t be able to fix in his supposed two-year comeback. No matter. Shares jumped as much as 9% Monday morning before settling back, as the investors, creatives and others rushed to embrace the familiar comforts of one of their favorite CEOs. 

Iger indeed is the GOAT among media executives. He’s the Tom Brady of CEOs. And like Tom Brady, he can’t stop playing the game. (Somewhere, Gisele Bundchen is contorting her perfect face in a grimace of condolence for Iger’s equally overachieving spouse, Willow Bay.) 

As big tech investor Alex Kantrowitz put it this morning, “Disney and Bob Iger have a co-dependence problem.” 

To repurpose a movie’s particularly apt phrase, they can’t quit each other. 

To be sure, Chapek’s bull-in-a-china-shop handling of various controversies — stumbling into Florida Gov. Ron DeSantis’s own-the-libs woke trap after that Iger tweet, publicly calling out Scarlett Johansson in a bonus flap after Black Widow skipped went day-and-date on Disney Plus — understandably enraged crucial constituencies. 

And Chapek absolutely mishandled this month’s disastrous earnings call, when the company disclosed a whopping $1.5 billion in quarterly losses on its streaming operations as cord-cutting walloped legacy operations. Chapek then compounded the problem by announcing a plan to, basically, make a plan to fix the spending problems with cuts, layoffs and reorganizations. 

Bouncing Bob 2 for Bob 1 buys Disney’s board some grace. But here’s the hard truth. For all of Chapek’s missteps, would Disney have been that much better off with Iger running things the past two years and nine months? 

The list of challenges for the Old New Guy are long. Many of those challenges were actually set in motion by Iger during his 15 years running the company. Worst of all, he won’t have much time to fix all of this, especially if he wants to preserve his remarkable legacy:

What to do with the company’s structure and finances: Disney’s many creative executives hated a Chapek reorganization that took away their green-light power and reposed it in a centralized distribution operation under Kareem Daniel, Chapek’s longtime lieutenant. Daniel, of course, is already updating his LinkedIn profile for his next gig. But reorganizing the reorganization, as Iger has signaled he’ll do, won’t fix an essential challenge of the age: cost-effectively and efficiently deciding what projects should go where. Somebody has to decide what becomes a straight-to-streaming series on Disney Plus, versus a theatrical release, versus a series on ABC or Freeform. Creatives may have been unhappy, but given the era’s tight media economics, the company needs some rational approach to its $33 billion in content spending. And it has to do that while losing less money, protecting market share in the hugely competitive streaming sector, in the middle of an economic slowdown. Piece of cake. 

What to do with who’s next: The board’s news release about Iger’s return made it clear: One key job in the next two years is finding a permanent successor. We already know how that worked out last time. Chapek was an Iger decision, and only after Iger bumped off at least two previous would-be successors in Tom Staggs and Kevin Mayer while speaking publicly about retirement at least four different times. It’s not clear why Iger will do any better picking the New No. 1 this time than last. The most-discussed successors include Disney entertainment chair Dana Walden, Marvel guru Kevin Feige and ousted movie co-chief Peter Rice. None of those people, it’s worth noting, has any useful experience running parks and resorts, merchandise, home entertainment, and other operations that generate around half of Disney’s revenue. Said experience might be useful.

What to do with debt and acquisitions: Iger’s $71 billion acquisition of Fox brought Disney a controlling chunk of Hulu and the pungent programming of FX, which continues to give Hulu subscribers reason to watch. But it also saddled Disney with a big pile of debt that burdens the company going forward. Some have speculated that Iger will seek another acquisition to drive growth because it’s possible Disney is still not large enough to compete with Netflix, Amazon, and Apple. Ridiculous suggested targets include Netflix, which ignores not only the mammoth cost (and debt) involved but the even larger regulatory pushback it would set off. More importantly, it’s not clear any acquisition would ease what ails Disney, other than providing some distraction for pundits. 

What to do with Hulu: Speaking of Hulu, that put/call agreement with Comcast has to be resolved by 2024, and continues to complicate the streaming strategies of both companies. Whenever that agreement is triggered, Disney will buy out Comcast’s one-third share of Hulu at an enterprise value of at least $27 billion. Comcast executives believe it’s worth a lot more, which means still more debt for Disney. The buyout won’t resolve where U.S.-bound Hulu fits into Disney’s global streaming strategy, however. Should Disney Plus be a more general service? Should Hulu or Hotstar remain a separate thing? As marketing and operations costs grow, this issue is becoming more pressing. 

What to do with ESPN. Disney also needs to figure out what to do with one of its most valuable, if cable-bound assets, ESPN. “I think if I had remained, I would have pushed that harder,” Iger told CNBC a year ago, meaning he should have pushed ESPN into streaming more aggressively, rather than clinging to its fabulously profitable cable past. “Do you accelerate that or do you hold back as long as you can?” Iger went on. Well, now he gets to revisit that strategy with a great deal more urgency. Nowhere is the tension between a lucrative legacy and an uncertain streaming future more pressing than at ESPN and its under-fed streaming service, ESPN Plus.

What to do with China: It’s been years since any of Disney’s big movies has been released in the world’s No. 2 theatrical market. China’s government tightly controls how many U.S. films appear in its theaters, and when they’ll run. In recent years, they’ve largely turned off the spigot for Disney films. Perhaps Iger can again pry open that market through the force of his winning personality. But also perhaps, he can’t. Xi Jin Ping, fresh off consolidating power amid his third term as premier, cares far more about building his local movie industry, which now churns out home-grown nationalistic blockbusters that also support Xi’s larger messaging goals. A lack of access to China’s bountiful box office has big implications for Disney’s entire theatrical strategy, including the budgets and marketing plans for Marvel, Star Wars, Avatar, and Pixar projects.

What to do with Marvel, Star Wars fatigue: How much of a good thing is too much? Under Iger, the company drew up a long-term plan for lots of Marvel movies and streaming series and lots of Star Wars movies and streaming series. That worked for a while, but now, even the hard-core have begun grousing about the onslaught. Numerous Marvel and Star Wars shows have underperformed, eroding a crucial component of the entire Disney flywheel. If putting more and more shows isn’t the answer, what is? A slower tempo of releases may increase returns on a given project, but does nothing for streaming’s most important metric: engagement. Fewer shows mean less time on site, and higher churn. 

What to do with Parks: To help cover the streaming losses, Chapek mercilessly bumped up prices at Disney’s resorts. Spending there is still strong as people exorcise their lockdown demons, but if the economy continues to pinch, do those excruciatingly high fees bite into long-term revenue? 

It’s a long list of challenges, and while Iger is certainly the planet’s best qualified human to take them on, he may rue the day he decided to come back. It’s not going to be a fun two years, and his reputation as a manager will face some of its biggest challenges. 

“I hope he enjoys what he’s doing, because he has a lot to do,” Morris Mark, founder of Mark Asset Management, told CNBC interviewers this morning. 

Truer words were never spoken. ▪️

Compared to how much he was making when he last held the job, Bob Iger might be a bargain in his second tour as CEO of Walt Disney Co.

According to a filing with the SEC, Iger will have a $1 million annual salary and an annual bonus that could earn him up to another $1 million. 

As part of the company’s long-term equity-based incentive plans, Iger is also eligible for a yearly award with a target value of $25 million. The award would be composed 60% of restricted stock units and 40% in the form of stock options.

“Depending on performance, the actual amount payable as an annual bonus to Mr. Iger may be less than, greater than or equal to the stated target bonus (and could be zero),” the filing notes.

In 2019, his last full year as CEO of Disney, Iger received total compensation of $47.5 million, including a $3 million salary, $10.1 million in stock awards, $9.6 million in option awards and $21 million in non-equity incentive plan compensation.

Iger did even better in fiscal 2018, when his total compensation was $165.6 million.

The filing notes that former CEO Bob Chapek was terminated without cause. The filing did not specify how much he received, except to say the separation benefits would be made in accordance with the terms of his employment agreement.

In fiscal 2021, the last year Disney reported, Chapek received $32.5 million as CEO, including a $2.4 million salary, $10.2 million in stock awards, $3.8 million in option awards and $14.3 million in no-equity incentive plan compensation. ■

On his first day back on the job as CEO of The Walt Disney Co., Bob Iger announced he will be making “organizational and operating” changes at the company.

The first shoe to drop is the departure of Kareem Daniel, who was installed as chairman of the Disney Media & Entertainment Distribution unit by Iger’s now-deposed successor Bob Chapek. 

Daniel was in charge of deciding which Disney projects went to which of its outlets — a move that upset the creative people working at Disney, who lost a certain amount of autonomy.

Also: Disney Stock Price Jumps Following Return of Bob Iger

In a note to staffers, Iger said the division will be managed in a way that “honors and respects creativity as the heart and soul of who we are.”

Iger said that he would be calling on Dana Walden, the head of Disney’s TV business; Alan Bergman, the head of its movie business; Jimmy Pitaro, who runs ESPN; and chief financial officer Christine McCarthy to help design the new structure, which will put “more decision-making back in the hands of our creative teams and rationalizes costs.”

Under Chapek’s watch, several key creative people left Disney, most notably Peter Rice. who had been head of Disney General Entertainment. 

*

Here is the text of Iger’s note to Disney Media & Entertainment Distribution staffers:

Dear Fellow Employees and Cast Members,

I want to share this note with you that I sent to DMED employees a short time ago.

Best,

Bob

Dear DMED Employees,

As we embark on the transformative work that I mentioned to you in my email last night, I want to begin by offering my sincere appreciation and gratitude to each and every one of you.

Over the coming weeks, we will begin implementing organizational and operating changes within the company. It is my intention to restructure things in a way that honors and respects creativity as the heart and soul of who we are. As you know, this is a time of enormous change and challenges in our industry, and our work will also focus on creating a more efficient and cost-effective structure.

I’ve asked Dana Walden, Alan Bergman, Jimmy Pitaro, and Christine McCarthy to work together on the design of a new structure that puts more decision-making back in the hands of our creative teams and rationalizes costs, and this will necessitate a reorganization of Disney Media & Entertainment Distribution. As a result, Kareem Daniel will be leaving the company, and I hope you will all join me in thanking him for his many years of service to Disney. 

Our goal is to have the new structure in place in the coming months. Without question, elements of DMED will remain, but I fundamentally believe that storytelling is what fuels this company, and it belongs at the center of how we organize our businesses. 

This is a moment of great change and opportunity for our company as we begin our second century, and I am so proud to be leading this team again. I can’t say it enough: I’m incredibly grateful for the tremendous work you do each day, and for your commitment to maintaining the level of excellence Disney has always been known for.

I know change can be unsettling, but it is also necessary and even energizing, and so I ask for your patience as we develop a roadmap for this restructuring. More information will be shared over the coming weeks. Until a new structure is put in place, we will continue to operate under our existing structure. In the meantime, I hope you all have a wonderful Thanksgiving holiday, and thank you again for all you do.

Bob 

The Walt Disney Co., straining in the transition to streaming, announced that it has replaced CEO Bob Chapek with his predecessor Bob Iger in a bit of Return of the Jedi-type drama.

Iger had a legendary 15-year term as CEO of Disney. Near the end of his run he led Disney’s strategic shift to jump headlong into streaming by successfully launching Disney Plus in 2019. 

Disney is now the leader in streaming subscribers, surpassing Netflix,  but the company is losing about $1 billion a year on its direct-to-consumer video business.

The company said Iger has agreed to serve as Disney’s CEO for two years with a mandate from the board to set the strategic direction for renewed growth and to work closely with the board in developing another successor to lead the company.

“Mr. Iger has the deep respect of Disney’s senior leadership team, most of whom he worked closely with until his departure as executive chairman 11 months ago, and he is greatly admired by Disney employees worldwide — all of which will allow for a seamless transition of leadership,” said Susan Arnold, who remains chair.

“I am extremely optimistic for the future of this great company and thrilled to be asked by the Board to return as its CEO,” Iger said. “Disney and its incomparable brands and franchises hold a special place in the hearts of so many people around the globe — most especially in the hearts of our employees, whose dedication to this company and its mission is an inspiration. I am deeply honored to be asked to again lead this remarkable team, with a clear mission focused on creative excellence to inspire generations through unrivaled, bold storytelling.”

Analyst Steven Cahall liked the move.

"While Chapek's departure is not a surprise due to recent turmoil and the stock's decline, Iger's resurgence is a positive surprise. Iger will be viewed as a catalyst to improve the content aspects of Disney, and we expect bigger potential strategic changes around the long-term shape of DTC," Cahall said in a note Sunday night. "While the announcement doesn't solve all of Disney's problems, we think investors will embrace it as it puts perhaps the best leader in Media at the helm with a mandate to shake things up."

Iger rose from a weatherman at an ABC station to become head of Disney in 2005. He made important acquisitions in Pixar, Marvel and Lucasfilm, the maker of Star Wars.

He agreed to stay on for a few more years as CEO in order to satisfy Rupert Murdoch, who agreed to sell 21st Century Fox to Disney.

Toward the end of his tenure, Iger went through a series of potential successors before anointing Bob Chapek, who ran the company’s parks business, in 2020.

Iger left a big shadow and Chapek inherited the company as the pandemic set in and also had to helm the company during the expansive middle rounds of the streaming wars as Wall Street shifted its focus from adding subscribers to cutting losses and becoming profitable.

Also Read: Bob Iger Sells Off Half of His Disney Stock Holdings

The company said Chapek stepped down from his position. Chapek got a new three-year contract in June.  At the time he was under fire for how he handled Disney's reaction to Florida’s “don't say gay” law.

Disney's stock price closed at 128.19 on February 25, 2020, Chapek's first day as CEO. It rose to a high of $197.18 on March 12, 2021 and close Friday at $91.80.

“We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic,” said Arnold. “The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period.” ■

It’s been bumpy few weeks of bad press for the traditional broadcast, cable and satellite TV business that’s made Hollywood rich over the past quarter century or so.

Ex-The Walt Disney Co. honcho Bob Iger told a conference last month that “linear and satellite TV is marching toward a great precipice, and it will be pushed off. … I can’t tell you when, but it goes away.”

Analyst Michael Nathanson laid into the equine corpse even more, issuing an apocalyptic update that said traditional broadcast and cable are “hanging by a thread,” even if the Traddies still generate four times the revenue of the suddenly blah streaming sector ($86.3 billion versus $22.6 billion).

Even the champions of the form are forced to damn with faint celebrations. NBC crowed about its ratings victory during  “premiere week.” Only problem: NBC won that first week of fall with — and this is not a typo — a 1.1 rating in the demo that advertisers actually want to reach. 

As LightShed Partners put it while talking about TikTok’s depredations on time spent with other entertainment options, “When we saw the list of top 20 premiere-week broadcast TV series, we were not sure whether to laugh or cry at how small the overall viewership was with 18-49 ratings getting closer and closer to zero.”

In the Before Times, when Traddies’ decline was more looming threat than lumbering reality, we called cable networks that got less than 1 rating point “zombies,” dead businesses that didn’t yet know it, shambling on thanks to channel bundles forced on hapless cable providers to harvest ever-rising carriage fees. 

So what do we call NBC and the other broadcast networks now that a network-wide average of just over 1 rating point is considered “good?” Gumbies? 

More importantly, perhaps, what do the Traddies look like five or 10 years from now? Once they fall off that Iger-ian precipice, where do they go splat? 

First, some rebalancing of hyperbole. Moffett suggests that post-apocalypse, Traddies will be left with “news, some sports, reality shows and ‘scripted leftovers.’ ” That’s a seriously not-awesome future. And it’s probably not wildly wrong. 

After all, the broadcast institutions are already leaking off broadcast to streaming, like Dancing with the Stars and Days of our Lives. 

In that $100 billion NFL deal the networks signed last year, the league remains on broadcast for the rest of the decade. That’s unless viewership gets really crummy. Then, media companies can shift it all to streaming, where Amazon and probably Apple already will have games. Already, these network NFL deals have more wiggle room than Lamar Jackson on a scramble. 

And there’ll be far less of that expensive scripted stuff. NBC is reportedly considering — once again — dumping its 10 p.m. weeknight window. Dick Wolf must have been too exhausted from endlessly self-iterating his zillion shows to figure out who to cast for a new FBI Chicago Law & Order International Special Victims Unit Also With Doctors And Firefighters series. 

More importantly than Wolf’s developmental shortcomings, the fact the NBC already is considering such a drastic move suggests someone at 30 Rock is thinking way beyond what’s happening right now. 

And it’s not just primetime losing the hits these days. Trevor Noah’s announcement this week that he’s departing Comedy Central’s The Daily Show — on the heels of previous late-night exits by Conan O’Brien, Desus & Mero, Samantha Bee and (next year) James Corden — suggests that formerly lucrative segment is facing its own Darwinian cull. 

For fans of the form, the departure of Noah — a young, biracial comic who appeals strongly to the young, diverse audiences abandoning traditional TV in droves — is a particularly notable loss. If Noah won’t stick around, who’s going to be left when the Jimmys and Steven head to retirement and their own Netflix interview shows? 

That doesn’t mean Future Traddies won’t include late-night entertainment. But what exists then almost certainly won’t feature big-name hosts with big-money contracts. Maybe it’ll be more like The Daily Show before Jon Stewart turned it into a zeitgeist-shaper. Remember, however dimly, Craig Kilborn? 

But broadcast doesn’t magically go away, either. Hundreds of stations in 300 markets don’t just evaporate like some Marvel plot line, and neither does their political influence. I know people who still get DVDs from Netflix (I’m visiting one as I write), or have an AOL email address, or listen to terrestrial radio. Hugely popular mass media platforms may fade, but they never seem to quite go away. 

My colleague Alan Wolk pointed out that carriage and retrans fees, long the golden goose for broadcast and basic cable networks, are dropping alongside the viewership. That’s a big problem, especially for smaller cable networks, which must decide whether to shift fully to streaming. Advertising is unlikely to fill the hole in their budgets left by those lower carriage fees, however. 

What to do then? Close? Or just be more like Canada or Europe, where legislators never mandated those fees/subsidies in the first place, so smaller networks had to figure out other ways to make a living. 

I think we’ll see significant adaptation by the Traddies in coming years, as many figure out how to survive with smaller footprints. 

Big sports rights deals, if nothing else, mean there’ll be at least some continued tune-in for what games remain there, though that’s only good until those deals expire.

ATSC 3.0 is one area of hope, though arriving far later than would have been ideal. The new digital broadcasting standard brings interactivity, multicasting on a single chunk of bandwidth, potential new data services like sports betting and targeted advertising, among other benefits. 

I also like the possibilities contained in Evoca’s hybrid over-the-air and internet-connected approach. It gives local broadcasters and regional sports networks a real path to all the audiences in their home markets, better-quality audio and sound than streaming consistently delivers and more data and targeted advertising opportunities. Something like it could help many Traddies in the post-apocalyptic world beyond cable distribution.

Tie that in with the OpenAP format, which enables programmatic advertising that combines audiences on traditional and connected TV, and you start to see an opportunity to build a new broadcast business model. 

That does nothing to fix the loss of Must Watch TV. 

One possibility for new sources of broadcast programming? All the older but often great shows commissioned by Netflix and the other streaming companies that are now moldering in the back corners of the algorithm. Where better than broadcasters’ hours of available linear streaming windows to build new syndication and monetization opportunities? 

Maybe those older shows come from big streaming services trying to monetize long-buried library content. Or maybe, they’re shows that have reverted back to creators, much as will happen with that new funding structure Netflix is using with some of its standup comedy specials, licensing the project for two years at about one-fifth the cost. That may become a template for far more than just standup comedy specials as streaming services cut upfront production expenses. 

Combine the new funding sources, more capable delivery mechanisms, and a new source of (old) programming, and broadcast starts to look a little like Tubi and Pluto TV with an over-the-air delivery and some local originals. Maybe station groups commission a few scripted originals for their outlets. Throw in the continued political oomph that broadcasters will have, and it’s not hard to see them finding a way forward for an extended period to come. 

For cable MVPDs though, it’s more complicated. 

The big providers such as Comcast and Charter have long made far more money, with far fewer headaches, by selling broadband instead of TV bundles. 

Sooner or later, the long-time cable operators may ditch the MVPD business entirely, leaving programming headaches and tight margins to virtualized competitors such as YouTube TV and Hulu Plus Live TV. Why bother with MVPD headaches if viewership keeps plummeting at 10% a year? Just give everyone’s app room on your delivery pipe, integrate with customers’ smart home devices and virtual assistants, and call it a day. 

For everyone else in cable, though, Nathanson and Iger are right. You’re pretty much screwed. ▪️

Disney Plus' first 15 months on the streaming market featured a fairy-tale narrative, with the streaming service surpassing 100 million subscribers globally by March 2021.

Disney CEO Bob Chapek said the "enormous success" of the streaming service "has inspired us to be even more ambitious, and to significantly increase our investment in the development of high-quality content."

Disney reported in August that the streaming service added 14.4 million subscribers in its fiscal third quarter. Total DTC subscriber gains for the company in the quarter reached 16.5 million, tying it with streaming behemoth Netflix at 221 million global subscribers. 

The company is looking to add even more subscribers with the launch of a Disney Plus ad-supported tier December 8.

"With our new ad-supported Disney Plus offering and an expanded lineup of plans across our entire streaming portfolio, we will be providing greater consumer choice at a variety of price points to cater to the diverse needs of our viewers and appeal to an even broader audience," said Kareem Daniel, chairman of Disney Media & Entertainment Distribution.

Also: Is Disney Plus Done with Premier Access?

Part of the Plan All Along

The initial big subscriber numbers are thanks in part to years of planning.

The Disney Plus slate is the result of a well-executed acquisition strategy that began in 2004 with the purchase of the Muppets, then Pixar in 2006, before picking up more speed with the addition of Lucasfilm, National Geographic Marvel and Fox. It all came to fruition with the advent of Disney Plus. 

Former Disney CEO Bob Iger credited Disney Plus’ strong debut to the parent company’s big investments in IP. “We feel that validates that collection of brands and a blend of product,” he said.

And content-wise, Disney Plus seems to offer something for everyone: kids, teens, adults, men and women. “We are seeing the four-quadrant appeal of our brands reflected in our subscriber numbers,” Iger noted. 

Combine that with a sleek Disney Plus app and the marketing power of its parent company, and Disney Plus is already achieving Disney’s broader goal—that is, compete with Netflix globally for next-generation video consumers. 

Can the growth be sustained? There are skeptics. Equity research firm Needham & Company, for example, has expressed doubt about Disney’s growth projections for Disney Plus. And there’s new streaming competition for Disney Plus, with the launches of AT&T’s HBO Max, Comcast/NBCUniversal’s Peacock, ViacomCBS's Paramount Plus and Discovery Inc.'s Discovery Plus, not to mention the merger of WarnerMedia and Discovery.

Like its media conglomerate peers, Disney--now under the leadership of Bob Chapek--has already doubled down on its streaming bet, unleashing a brutal restructuring in the months before the pandemic set in, prioritizing subscription OTT. The company also said that it will increase its spending on programming in 2022 from $25 billion to $33 billion.

As we watch what happens next with the most exciting new OTT platform to emerge in years, here are four things to keep an eye on:

How Much Does Disney Plus Cost?

Disney Plus upped its price for the first time in March. Bumping the monthly cost from $6.99 to $7.99 and the yearly commitment from $69.99 to $79.99, after a seven-day free trial. The price for Disney Plus's bundle with the ad-supported version Hulu and ESPN Plus also went up $1 to $13.99 a month. 

A solo subscription to Hulu goes for $6.99 a month. ESPN Plus is $6.99. The individual prices of those services added together comes to $21.97. Thus, bundling saves subscribers $8 a month, a 36% discount. 

Consumers can also get a free year of Disney Plus by signing up with Verizon. Netflix, the SVOD service Disney Plus is seeking to catch up to—or merely slow down— recently hiked its prices and now charges $15.49 per month for its standard tier, the HD version that allows two concurrent streams in the home. 

That means Disney Plus is nearly half the price of Netflix. In an era of ever-escalating programming costs, how long can Disney Plus afford to keep its price point so low?

Also: Iger: Disney Plus Needs to Move Beyond Spandex … and Pump Up the Volume

Disney Plus' Broad Appeal

A big part of Disney Plus’s early success has been its “four-quadrant” appeal—its ability to bring in all major audience demographics. Most major streamers depend on kids’ fare to keep parents paying up. 

And Disney Plus has the most robust kids offering in the streaming biz, from Disney shows like Hannah Montana to Disney Animation classics including Frozen to Pixar movies like Moana, while also factoring in The Muppets and Nat Geo nature show. 

And as the kids age into that all important tween/18-35 demographic, Disney Plus offers even more punch with some of the best of Marvel’s superhero blockbusters and the entire nine-film “Star Wars” saga. For the more musically-inclined, there’s also High School Musical: The Series. 

For more mature audiences who are less interested in things that go “bang,” Disney Plus offers classics from the Fox archives and the entire suite if National Geographic programming. Perhaps most importantly, there are hits like “Star Wars”-based series The Mandalorian, which span audience age demo, race and economic brackets. 

Sustaining growth will come down to making hits. 

The success of The Mandalorian, built on through Season 2, has been parlayed into an aggressive slate of new "Star Wars" shows, virtually all of them still pending amid a slow pandemic-era production schedule.

During Disney’s four-hour-long “Investor Day” presentation on Dec. 10, 2020, the conglomerate announced a slew of new Star Wars shows and films that span timelines, genres and even live-action and animation formats, with producers Jon Favreau and Dave Filoni now serving as guardians of Star Wars canon an architects of its ongoing fate. 

Marvel-inspired hits have also driven Disney Plus--not only in the form of theatrical movies like Black Widow, but also the surprise breakout original series WandaVision. 

There's also been a Pixar hit--Soul debuted on Christmas Day, outside of the studio's $30 "Premiere Access" window, to boffo viewership numbers and an unrevealed--but no doubt robust--flurry of Disney Plus signups. 

Technology

Sure there were those famous early technical glitches for Disney Plus, which the company attributed to growing faster out of the gate than it was initially prepared for. But outage reports have been few and far between since those early days.

There was also concern that the Disney Plus North American launch would be undermined by an impasse with Amazon, and that Disney Plus would debut in November with no app support for the No. 2 OTT ecosystem in the U.S., Amazon Fire TV. But that got taken care of, as well. 

These days, everyone seems pretty happy with the performance of the Disney Plus app, and it seems to effectively play across the device ecosystem—from Roku to Amazon Fire TV to Apple TV to Android TV; from iOS to Android mobile; and from Xbox to PlayStation. With device ecosystem purveyors like Roku and Amazon gaining more market share and power, while developing their own content agendas, will Disney Plus be able to avoid licensing disputes and sustain a smooth distribution path to its customers?

Global Expansion

Iger called international expansion “the next big priority.” Disney Plus launched first in the U.K., Ireland, France, Germany, Spain, Italy, Switzerland and Austria, starting in March. 

Shortly thereafter, Disney Plus expanded into another massive market, India. In that country, Disney rebranded its existing Hotstar VIP and Premium subscription tiers to Disney Plus Hotstar. 

Last year, Disney launched the service in South Korea, Hong Kong and Taiwan and also inked a deal for the streamer's support on Hisense and Toshiba smart TVs powered by the VIDAA OS. ■

There. He said it. “He” being Bob Iger, departing Disney after a celebrated career heading Hollywood’s biggest media company as CEO and chairman. And he just said Disney Plus, whose creation Iger presided over as part of one of the most consequential media company pivots ever, needs to change. 

"I think [Disney Plus] needs more volume," Iger said in a valedictory CNBC interview/career retrospective filmed at Disneyland that aired in segments all day Tuesday. "And there probably needs to be more dimensionality, meaning, basically, more programming or more content for more people, different demographics. But, [CEO Bob Chapek] is aware of that and is addressing those issues.”

Taking Disney Plus to a much wider group of people is not quite the populist comment you’d expect from one of Hollywood’s ultimate Masters of the Universe and the staunchest defender of the Disney brand. 

And doing more of what you’re already doing should be relatively easy; Just open the spigots a bit wider. It’s amazing what another billion dollars can buy. But adding “dimensionality” to the Disney Plus recipe, that could be a major challenge for Iger’s successor if he still wants to preserve the Disney brand. 

Chapek faces a conundrum. Disney Plus vaulted to success over the past two years with a much-loved collection of family-friendly blockbusters from Marvel, Star Wars, Pixar, National Geographic and Disney’s vast animation library.

But durable as the audience for that content is, it’s something of a “spandex ghetto,” attracting a highly defined set of superhero fans and parents urgently seeking safe shows for the kidlets to binge during lockdown. How does Disney move beyond that narrowcast to a broader array of programming that still protects its prized name? 

One option is music. Much as Apple has profitably done, Disney is now mining music-related documentaries and performances for popular programming. 

Apple TV Plus and Disney Plus even have dueling Billie Eilish projects, though Disney’s more recent Happier Than Ever is billed as a “concert experience” rather than documentary. Disney Plus also offers the filmed version of Hamilton, High School Musical spinoffs, and Beyonce’ and Taylor Swift projects. 

Most unexpectedly, the three-part, 7 1/2-hour documentary The Beatles: Get Back turned out to be a hit far beyond the Fab Four’s many obsessive fans. But the massive documentary, with its million small moments captured 51 years ago during the creation of the Let It Be album, proved absorbing to many others who weren’t even born then. 

Not every musical venture seems right for Disney Plus. It’s hard, for example, to imagine Disney Plus carrying Todd Haynes’ wonderful exploration of the Velvet Underground, given its subject’s still shocking explorations of drug culture, S&M and other taboo topics amid Andy Warhol’s mass-media hacking. 

And even expanding on what Disney already does isn’t actually “simple” amid huge competition for the best projects and intellectual properties. Ampere Analysis estimated worldwide content spending jumped 14% this year, to more than $220 billion. That was led by the SVOD services, whose nearly $50 billion in content spending was up 50%.

Of the SVOD total, Netflix spent around 30%, making one wonder what it will take for everyone else to catch up. 

By Ampere’s analysis, Comcast and Disney units each collectively exceed Netflix’s investment in “professional video content” but a third of their content spending went to sports rights. Other spending went to legacy broadcast, satellite and cable operations at both companies.  

Ampere is predicting only a modest increase by everybody from 2021 levels, to $230 billion worldwide, driven once again by the SVOD services.

The real opportunity remains overseas, where most of the potential audiences live, and where dozens of production centers are creating shows for local audiences. Occasionally, as Netflix Co-CEO Reed Hastings likes to say, those local shows become worldwide hits. For Netflix, the list of international breakouts this year includes Squid Game, Lupin and Money Heist. It’s difficult seeing any of those projects on Disney Plus. 

No doubt there are other kinds of shows where Disney Plus can expand. So far, the obvious opportunity, though, seems to be further integration between Disney Plus and label mates ESPN Plus, Hulu, and Hulu’s overseas doppelgänger, Star. 

Creating tabs to access sister services, as Star does, and Hulu Plus Live TV is now doing, seems a step in that direction. 

Whether even more integration is possible while preserving the pristine Disney Plus brand is no doubt the subject of ongoing conversations. But Iger’s comments suggest Disney executives understand they need to restart the sputtering growth rocket they keep promising.

During the company’s most recent earnings call, Disney execs aggressively reiterated projections that Disney Plus would have 230 million to 260 million subscribers by 2024. 

That’s despite the flattening growth rate for subscriber adds in the second half of 2021, which sent Disney shares down precipitously. Since a September high of about $185 a share (and a 52-week high of $203), share prices have plummeted nearly a quarter, to around $150.  

Share prices and quarterly market gyrations aren’t always the best way to evaluate a company. But they do starkly illustrate what a large group of invested observers think of the job a company is doing. Iger’s comments suggest what Disney insiders are thinking. Now comes the hard part. Fixing it all. ■

Bob Iger, who began his career as a TV meteorologist before moving up the ranks at Disney, turned up at KABC Los Angeles Dec. 9 to do the morning weather. Iger retires from Disney Dec. 31. He was the CEO until February 2020 and is currently chairman of the board.

Iger got his start in television doing weather for a cable network in Ithaca, New York. He joined ABC in 1974. 

KABC is part of ABC Owned Television Stations, which is part of Disney. Iger was interviewed on the KABC morning show, then was asked to handle the weather.

Iger shared with viewers about “light rain falling across the Southland,” with heavier stuff to follow. He forecasted a “very nippy” start to the weekend (62 degrees), and cooler still around “the beaches, near where I live.”

KABC meteorologist Leslie Lopez and morning anchor Leslie Sykes congratulated Iger when he finished the weather. 

“By the way, I started as a weatherman when I was 23 years old,” he told Lopez. “So the possibility exists that you could become the CEO of the Walt Disney Company.” ■

Bob Iger, executive chairman of the Walt Disney Co., sold about $100 million worth of the company’s stock on June 1.

The sale represented about half of Iger’s holdings in the company he headed as CEO until last year.

According to documents filed with the Securities and Exchange Commission, Iger sold 550,570 shares at prices averaging just over $179 a share. The shares were sold in 173 separate transactions resulting from two sell orders.

After the sales, Iger had 500,000 shares of Disney stock worth $88.6 million based on the closing price of $177.18 on Friday, and another 20,551 shares in his Individual Retirement Account worth $3.6 million.

Also Read: Disney Exec Pay Drops as Incentive Payouts Vanish

“The sale is part of the diversification of Mr. Iger’s portfolio, and the value of these shares reflects the significant shareholder value generated under his leadership, with Disney’s stock price rising from just $24 a share when he became CEO in 2005, far outpacing the S&P 500," a Disney spokesperson told Barron’s. “Mr. Iger continues to hold over 500,000 Disney shares in addition to options and other securities.”

After acquiring 21st Century Fox and radically changing the company’s strategy from dominating pay TV to becoming a leader in streaming, Iger stepped down after 15 years as CEO last February. He was replaced by Bob Chapek, who ran Disney’s parks division.

Iger succeeded Michael Eisner as CEO in 2005 and built Disney into a leading content company by buying Pixar in 2006, Marvel Entertainment in 2009 and Lucasfilm in 2012.

Iger was inducted into the B+C Hall of Fame in 2015. 

The Walt Disney Co. said pay for its top executives dropped in 2020 as incentive plan compensation dropped to zero in a year when its theme parks closed, its films couldn’t play in theaters and thousands of employees lost their jobs.

Bob Iger, who gave up the CEO title in February and remains executive chairman, received total compensation of $21.03 million in 2020, compared to $47.52 million in 2019. Iger’s salary fell to $1.569 million from $3 million. Last year he got $21.75 million in non-equity incentive plan compensation.

In its SEC filing, the company said that while executives performed admirably amid the challenges presented by the COVID-19 pandemic, “management and the Compensation Committee believe that in light of circumstances this year, that no bonus should be made” to its named executive officers.

Bob Capek, who followed Iger as CEO, got total compensation of $14.163 million, including a salary of $1.81 million.

CFO Christine McCarthy’s total compensation dropped to $10.997 million from $14.974 million in 2019.

Zenia Mucha, senior executive VP and chief communications officer, received $4.946 million, down from $7.562 million.

Chief Human Resources Officer and senior executive VP M. Jayne Parker’s compensation was 7.292 million, down from $9.021 million.

The Walt Disney Co. chairman and CEO Bob Iger tried to calm investor fears surrounding the continued spread of the coronavirus COVID-19 at the company’s annual meeting Wednesday, telling investors that despite challenges, the entertainment has successfully navigated crises, including wars, economic downturns and natural disasters, before.

There are more than 122,000 confirmed cases of COVID-19 worldwide and nearly 4,400 people have died from the illness. In the U.S., more than 1,000 confirmed cases of the virus have been diagnosed, with about 32 deaths reported.

In addition to its film and TV divisions, Disney has considerable interests in theme parks and cruise lines, sectors that have been particularly hard hit as consumers are reluctant to travel as the virus spreads. Disney also has a major theme park in China, which has been identified as the epicenter of COVID-19.

“We’re all sobered by the concern that we feel for everyone affected by this global crisis,” Iger said at Disney’s annual meeting of shareholders in Raleigh, N.C., Wednesday, adding that the company has been “incredibly resilient” throughout its nearly 100-year history.

“Our future has always been bright and remains so for good reason,’ he continued. “What we create at the Walt Disney Company has never been more necessary or more important.”

Iger’s words didn’t seem to have much of an impact on Disney stock, which fell along with the rest of the market as coronavirus fears continued to decimate shares. Disney stock was down about 6% ($6.74 each) to $104.72 per share in early trading Wednesday. Disney’s fall coincided with an overall decline in the Dow Jones Industrial Average, which was down more than 1,000 points before midday. The index has lost about 18% of its value since Feb. 13.

“These are obviously really challenging times, stay healthy please,” Iger said to close out the annual meeting. “While all companies like Disney are affected by what’s going on, we are confident long-term in our prospects. The resiliency of the company has been demonstrated time and time again over the almost 100 years we’ve been in business and I know we will do that as well.”

The Walt Disney Co. said it has named Disney Parks chairman Bob Chapek as chief executive officer, effective immediately. The 27-year company veteran replaces Bob Iger, who will become executive chairman of the company.

The appointment of Chapek to the CEO spot solves what has been a corporate dilemma for the company for years, finding a successor to the well-respected chairman and CEO. Iger is a tough act to follow — Disney has added iconic brands like Pixar, Lucasfilm, Marvel and most recently 21st Century Fox, since he was named CEO in 2005. Iger will continue to direct Disney creative projects and will finish out the remainder of his contract, which expires on Dec. 31, 2021. As executive chairman he will also lead Disney’s board of directors.

In Chapek, Disney gets a company veteran that has served on the distribution and consumer products sides of the business. He joined the company in 1993 and has served as president of Walt Disney Studios Home Entertainment, president of distribution for The Walt Disney Studios and 2011 to 2015, he was president of the former Disney Consumer Products segment. In 2018, he was named chairman of Disney Parks, Experiences and Products.

“With the successful launch of Disney’s direct-to-consumer businesses and the integration of 21st Century Fox well underway, I believe this is the optimal time to transition to a new CEO,” Iger said in a press release. “I have the utmost confidence in Bob and look forward to working closely with him over the next 22 months as he assumes this new role and delves deeper into Disney’s multifaceted global businesses and operations, while I continue to focus on the Company’s creative endeavors.”

Chapek will be the seventh CEO in Disney’s nearly 100-year history.

“Throughout his career, Bob has led with integrity and conviction, always respecting Disney’s rich legacy while at the same time taking smart, innovative risks for the future,”Iger continued. His success over the past 27 years reflects his visionary leadership and the strong business growth and stellar results he has consistently achieved in his roles at Parks, Consumer Products and the Studio.”

In his new role as CEO, Chapek will directly oversee all of the Disney’s business segments and corporate functions. He will report to Iger and the board of directors. He will be appointed to the board at a later date. A new head of Disney Parks, Experiences and Products will be named at a future time.

“I am incredibly honored and humbled to assume the role of CEO of what I truly believe is the greatest company in the world, and to lead our exceptionally talented and dedicated cast members and employees,” Chapek said in a press release. “Bob Iger has built Disney into the most admired and successful media and entertainment company, and I have been lucky to enjoy a front-row seat as a member of his leadership team. I share his commitment to creative excellence, technological innovation and international expansion, and I will continue to embrace these same strategic pillars going forward. Everything we have achieved thus far serves as a solid foundation for further creative storytelling, bold innovation and thoughtful risk-taking.”

The Walt Disney Co. named Bob Chapek as CEO, succeeding Bob Iger, who becomes executive chairman.

The company said Iger will direct the company’s creative work and guide the company through an executive leadership transition through when his contract ends Dec. 31, 2021.

Chapek had been head of Disney’s parks unit. Disney has had a history of difficult successions and Iger has extended his contract several times before now naming a successor.

Disney Plus: Everything You Need to Know

Iger has overseen an overhaul of Disney’s TV business, shifting priorities to streaming from traditional TV. Last year’s launch of Disney+ drew 10 million subscribers on its first day and the service has continued to grow.

“With the successful launch of Disney’s direct-to-consumer businesses and the integration of 21st Century Fox well underway, I believe this is the optimal time to transition to a new CEO,” Iger said in a statement. “I have the utmost confidence in Bob and look forward to working closely with him over the next 22 months as he assumes this new role and delves deeper into Disney’s multifaceted global businesses and operations, while I continue to focus on the Company’s creative endeavors.”

Chapek was named chairman of the parks division in 2018. 

The Walt Disney Co. announced that its new Disney Plus Streaming services has 28.6 million subscribers, surpassing the low end of analysts' expectations.

The day Disney Plus launched on Nov. 12, Disney announced that it had exceeded 10 million subscribers.  

At the end of the fourth quarter, Disney Plus had 26.5 million subscribers. But on Disney's earnings call, CEO Bob Iger updated the figure to reflect paid signups through Monday. 

Iger called the launch "an enormous success," adding that it is exceeding the company's expectations. 

He said that conversions of free to pay subscribers and churn were better than the company predicted.

Iger also said season two of The Mandalorian will launch on Disney Plus in October.

Disney has pivoted into the streaming business. In its fourth-quarter earnings report released Tuesday, it said that Hulu had 30.4 million subscribers -- with 27.2 million subscribing to the SVOD service only and 3.2 million to the Hulu Plus Live TV  service -- and that ESPN+ has 6.6 million subscribers.

On the earnings call Iger said that as of Monday, ESPN+ had 7.6 million subscribers, helped by the recent Conor McGregor UFC fight, which brought in about a million pay-per-view purchases and a half-million new subscribers.

Hulu was up to 30.7 million subscribers as of Monday.

The average revenue per Disney Plus subscriber was $5.56, the average ESPN+ subscriber generated $4.44, the average Hulu SVOD subscriber generated $13.15 dollars (including ad revenues) and Hulu Plus Live TV subscribers generated $59.47.

Total revenue for Disney’s Direct-to-Consumer & International unit rose to $4 billion from $900 million a year ago. But the unit’s operating loss jumped to $693 million from $136 million a year ago.

“We had a strong first quarter, highlighted by the launch of Disney Plus, which has exceeded even our greatest expectations,” said Iger. “Thanks to our incredible collection of brands, outstanding content from our creative engines and state-of-the-art technology, we believe our direct-to-consumer services, including Disney+, ESPN+ and Hulu, position us well for continued growth in today’s dynamic media environment.”

There are more than 10 million reasons why The Walt Disney Co. chairman and CEO Bob Iger is Multichannel News’s executive of the year for 2019.

The first 10 million are the larger-than-expected number of people who signed up for the Disney+ streaming service on Nov. 12, the first day it was available.

Disney+ is the result of Iger, who started his career as a weatherman in Ithaca, New York, forecasting that technology was splintering the pay TV environment. The cord-cutting that resulted from viewers getting more choice about how they consume video was eating into Disney’s most profitable unit, ESPN.

“I think he’s done an incredible job of getting Disney+ off the ground,” said analyst Rich Greenfield of LightShed Partners, who is outspoken about the impending demise of the traditional TV business. “Technically, the quality of service is great and the breadth of content, especially old library content, is incredible.”

When Iger admitted on Disney’s fiscal third-quarter earnings call in 2015 that ESPN’s subscriber count was falling, the company’s stock dropped 7%. The same forces would impact the other TV businesses owned by Disney and those of its competitors.

After 13 years as CEO, Iger decided to be the disruptor instead of the disrupted. He bet the company on the idea that Disney could build a direct-to-consumer business on its trove of iconic content. His strategy was to turn Disney inside out. It stopped selling movies and shows to streaming competitors like Netflix, bought BAMTech to get a platform to launch ESPN+ and acquired 21st Century Fox to control even more content and streaming service Hulu.

Disrupting the Disruptors

With all those elements in place, Iger laid out the plans for Disney+ at an investor day held April 11 on the Burbank, California, movie lot where films like Mary Poppins were made.

“My grandparents took me to see Cinderella when I was a young boy, and just this last Christmas, I watched it with my grandchildren,” Iger told his audience. “That’s five generations of my family all entertained by the same film. And a perfect illustration of what evergreen means to us and just how much value it generates.”

While its films are timeless, Iger said it was time for Disney to find a new way to do business.

“A core tenet of ours since Walt founded the company is to create change and not just to sit back and watch it happen,” he said. “Now that’s not easy. It takes commitment, it takes perseverance, it takes patience and a lot of talent. And borrowing from one of Walt’s greatest strengths, it takes courage.”

Investors and analysts were shown the product, which would become the home for content from the company’s extraordinary brands: Disney, Pixar, Marvel, Star Wars, National Geographic, The Simpsons. It would have hit films like Avengers: Endgame, classics like Cinderella and original content like the Star Wars series The Mandalorian. They were told it would cost consumers just $6.99 a month and that the company expected it to have between 60 million and 90 million subs and turn profitable by 2024.

The next day, Disney stock jumped 12% to a then-record $130.06 per share.

By the time Disney reported its fiscal fourth-quarter earnings on Nov. 7, just days before the launch, Iger said that Disney+ was “the most important product that the company has launched” since he was in charge. Disney was “all in” and determined to “launch big and scale fast.”

Launch big and fast it did. Signing up 10 million subscribers in one day was “astounding,” said analyst Todd Juenger of Sanford C. Bernstein. “Before investor day, we were debating with investors whether Disney would get 10 million subs in the first year,” he said. “In recent months, the debate was whether Disney would be at 10 million subs when they reported fiscal first-quarter earnings in February. Nobody — not even the biggest bulls in their wildest dreams — expected 10 million signups in one day.”

According to Juenger, the launch added $18 billion to Disney’s market valuation in the four hours of trading after the company disclosed how many subscribers it had. (The company said it would not update the subscriber count until its next earnings report.)

Disney+ was not the first big bet Iger has made since becoming CEO in 2005. Iger was with ABC when it was acquired by Capital Cities and joined Disney when it purchased Capital Cities/ABC in 1995.

Picking a successor to then-Disney chairman and CEO Michael Eisner in 2005 was a difficult process, with the company going through a number of heirs apparent. Eventually Iger emerged as the only internal candidate for the top job. In a MasterClass presentation about business strategy released in November, Iger said a key part of convincing Disney’s board was outlining his priorities for the company, which he boiled down to three points: investing in creativity, using technology in ways to bring content to consumers in innovative ways and expanding internationally. “I got the job and the next step was to articulate them to the company and then ultimately to implement them,” Iger said.

A proponent of the value of brands, Iger convinced the board that Disney should buy Pixar for $7.4 billion in 2006, Marvel for $4 billion in 2009 and Lucasfilm, creator of Star Wars, for $4 billion in 2012. In 2019, those powerhouses would help Disney smash records by taking more than $10 billion at the box office, with Star Wars: The Rise of Skywalker set to open on Dec. 20.

Disney this year outbid Comcast for 21st Century Fox, paying $71 billion. After the acquisition, Iger continued to reorganize the company to emphasize streaming.

The new direction means big changes for many longtime Disney TV executives, some of whom had to leave the company following the Fox deal.

A former Disney executive who worked with Iger said that Iger is well-liked and good at getting the company to follow his lead.

“It’s one thing to go along with the company plan [and] another thing to believe it,” the executive said. “Bob’s good at that. They believe him. Everything he’s done, whether it’s Pixar, whether it’s Lucas, it’s worked out. He’s got more than the benefit of the doubt.”

That kind of communication is important to Iger. “Strategy is only as good as your ability to articulate it,” Iger said in his MasterClass presentation. “Clarity becomes incredibly important. Clarity actually is an essential ingredient to good leadership as well.

“When you lead people you need to be very, very clear about what you expect of them,” Iger added. “It’s very, very important that you communicate quite effectively with a set of people that ultimately are going to go out and implement your vision or your strategy across the company and I believe that that’s something that needs to happen. Not just once but on a constant basis.”

While Disney+ is off to a fast start, its future is not determined. IMA Research said that after five days Disney+ was up to 15 million subscribers. That compares favorably to 1.1 million subs for Apple TV+, which launched Nov. 1. On the other hand, a poll conducted by Express VPN found that 23% of Disney+ subscribers were likely to cancel within six months. If forced to choose, 35% said they’d pick Netflix over Disney+.

The streaming push also impacted Disney’s profits. Disney’s fiscal fourth-quarter earnings from continuing operations were down 72%.

“I think the unanswered question is: is Disney+ and Hulu just accelerating the collapse of the legacy ecosystem?” said analyst Greenfield. “Bob deserves credit for pivoting and finally realizing that the company had to make a meaningful shift and really lean in hard. But he still has a lot of assets tied to that legacy ecosystem. What happens to those? I don’t even know why he wants to own ESPN.”

Eyeing the End of the Ride

As for Iger’s future, the executive has already delayed his retirement to oversee the acquisition of 21st Century Fox and launch Disney+. He received $65.5 million in compensation for 2018. He was asked about how long he’d stay at the company during the Investor Day presentation in April.

“I have been CEO since October of 2005 and as I’ve said many times, there’s a time for everything and 2021 will be the time for me to finally step down,” said Iger, 68, who titled his recent memoir The Ride of a Lifetime. “I have been engaged with the board for quite some time in discussion about succession. And they’ve been engaged in a succession process, and we continue to feel that they will be able to identify my successor on a timely enough basis so that this company has a smooth transition.”

Bob Iger, the CEO of The Walt Disney Co., resigned as a director of Apple's board as competition between the two giants on the streaming video front made staying on the board impossible.

Apple CEO Tim Cook this week announced that Apple TV+ will have its debut on Nov. 10 and cost $4.99 a month.

Disney is coming out with Disney+ on Nov. 12. That will cost $6.99 a month. Disney is pushing hard into the streaming business. It also has Hulu and ESPN+.

Related: Disney Warns AT&T Subs About ABC, ESPN Blackout

Iger’s resignation was disclosed in an SEC filing Friday.

Iger joined the Apple board in 2011. He has said that he recuses himself from meetings when streaming issues come up. 

In 2005, Iger shook up the TV business when he made a deal with Apple found Steve Jobs to make Disney TV shows available on the first video iPods buy selling them for $1.99 on Apple’s iTunes store.

The move provoked howl among affiliates and advertisers concerned that hits like ABC’s Desperate Housewives and Disney Channel’s That’s So Raven would be downloadable.

“This initiative is a perfect example of us applying our strategic priorities, namely, marrying great content with cutting edge technology to more effectively distribute our content while enhancing the experience for our customers,” Iger said at the time. “For the first time ever, hit primetime shows can be purchased online the day after they air on TV.”

Walt Disney Company CEO Bob Iger has stepped away from his seat on the Apple board of directors.

The move was disclosed in an Apple SEC filing Friday and reported on by Variety.

According to the filing, Iger’s move came earlier this week as Apple announced the $4.99 price point and Nov. 1 launch date for its new streaming service, Apple TV+.

Apple’s original program play will compete head-on in the marketplace with Disney’s upcoming Disney+ streaming launch.

Iger joined Apple’s board in 2011, shortly after Disney purchased Pixar from former Apple CEO Steve Jobs. 

Walt Disney Co., chairman and CEO Bob Iger told an audience of investors and analysts Tuesday that its deal to assume operational control of streaming service Hulu the “third prong” in its direct-to-consumer strategy, linking its ESPN + and Disney + DTC products in ways that will unlock what the company believes is their enormous potential.

Disney said Tuesday morning that it had hammered out a deal with Comcast -- which holds a 33% interest in Hulu -- that will give the content giant immediate control of the streaming service. As part of the deal, Comcast has the right to put/call its interest to Disney in 2024 for $27.5 billion or market value of the stake at that time, whichever is higher. Disney also can force Comcast to sell it the stake at the same price.

Disney, which increased its ownership in Hulu to 60% after its purchase of certain 21st Century Fox assets closed in March, agreed to a deal that would bring AT&T’s 9.5% interest in the streaming service back in-house in April.

At the MoffettNathanson Media & Communications Summit Tuesday, Iger told the audience that getting the full Hulu stake offers several benefits to Disney.

“We get full operational control from day one, which enables us to run it in ways that obviously gives action to a number of things both strategically and otherwise,” Iger said. “There are a lot of synergies involved with it, I think first and foremost it’s the third prong in our direct-to-consumer strategy with ESPN + and Disney+. We’ll be able to manage customers across all platforms -- customer data, password, user name, billing -- it gives us the ability to bundle, [and] share data. Ad sales is another benefit because we’ll integrate it with our ad sales across our other our platforms.”

Iger added getting full control of Hulu also will help Disney leverage its content -- including FX, ABC, ABC News and others which could develop and produce content for the Hulu platform -- and its technology. He said eventually the BAMTech platform that powers Disney’s other streaming operations will be the tech platform for Hulu.

When asked about the price, Iger said that operational control has “real value” as does the condition that if Comcast does not pump capital into the service, its stake could be diluted to as low as 21%.

“Ultimately it’s a price we felt was justifiable,” Iger said.

The benefits from operational control include the opportunity to integrate Hulu seamlessly with its other services, giving consumers the ability to buy one, two or three services in a bundle that will allow them to use the same password.

“Bundling is certainly attractive,” Iger said. “Managing a customer seamlessly across platforms has real value.”

The Walt Disney Co.’s new entertainment streaming service Disney+ will officially launch on Nov. 12 and be priced at $6.99 per month, making the ad-free service a formidable competitor to SVOD juggernaut Netflix.

“What we are putting forward is an aggressive strategy,” Iger told the audience at the Investor Day Thursday. “We feel that if we’re going to implement it, we’ve got to be very, very serious and be all in on it.”

Disney made the announcements to analysts and the press at a nearly three-hour long Investors Day presentation in Burbank. The price point — investors can also pay $69.99 for a full year of service — was a clear indication that Disney plans to be aggressive with the service in the increasingly crowded OTT space.

Disney first announced its plans to launch the service last year. In April it launched a streaming sports service, ESPN+, which now has about 2 million customers. The entertainment service, which some analysts had jokingly dubbed “DisneyFlix” — a nod to Netflix, the global SVOD powerhouse with 150 million customers worldwide — was expected to be more attractive to consumers. Now that edge is expected to be even sharper with the low price point — Netflix raised prices for new customers in January from $10.99 per to $12.99 per month — making the Disney service a considerably cheaper alternative.

Related: Disney Investor Day: Feast or Famine? 

Disney+ will have a mix of movies, TV shows from its various networks and original content from its Pixar, Disney and Marvel units. The service also will be home to shows from National Geographic and 30 years of library content from its iconic animated series, The Simpsons, from its purchase of certain 21st Century Fox assets. 

Disney said it expects the service to have between 60 million and 90 million global users by 2024, with about one-third of those customers in the U.S. Disney expects to spend about $1 billion on content for the service in 2020, rising to about $2.5 billion by 2024, the year that the company anticipates the service will turn its first profit.

Most analysts were encouraged by the presentation -- the subscriber guidance numbers were aggressive, as was the pricing of the service -- and Disney’s obvious enthusiasm in going deeper into the direct-to-consumer space.

“We came away encouraged by the sheer scale of the business model transformation that Disney has begun with the aim of becoming a leader in global Internet TV,” Evercore ISI media analyst Vijay Jayant wrote in a research note. “Clearly, the company has the brands, content and vision to make the strategy work – and we think the new ambitious long-term financial targets issued at the event, both on the revenue and cost sides of the equation, reflect the scope of the project now underway.”

RELATED: At NAB Show, Panel Sees SVODs in Full Tilt Competition

At credit rating service Fitch, director Patrice Cucinello said in a statement that Disney+ proves the content giant is “approaching streaming offerings with guns blazing.”

"Disney+ will be loaded on ‘Day One’ with attractive IP and franchises, and has set the price very affordably at $6.99 per month, well below other premium SVOD offerings,” Cucinello added. “Along with ESPN+, Hulu and Hotstar, an eventual bundling of Disney’s service offerings could come at a discounted price making 'cutting the cord' an attractive alternative."

But some also noted that going up against a content juggernaut like Netflix won’t be easy, especially if Disney plans to spend a fraction of the $14 billion Netflix spends annually on content.

“There are dozens of websites on the Internet dedicated to ‘what's new to watch on Netflix this week,’" Sanford Bernstein media analyst Todd Juenger wrote in a note to clients. “We don’t think there will be any websites similarly dedicated to ‘what's new to watch on Disney+ this week.’ Most weeks, there won't be anything new to mention.”

Disney+ does plan to air more than 50 original series and over 10 original movies, but even when you add in the theatrical output, that works out to one new piece of content per week, Netflix, in contrast, releases about a dozen new shows, movies and documentaries on average each week. And while Disney is an iconic brand with nearly a 100-year history of presenting quality content, Juenger wondered how much of the appeal of Disney+ will be driven by parental nostalgia and not young consumer demand.

“Of course, parents are the decision-makers so maybe that's what matters most,” Juenger wrote. “But that won't last long if they can't get their kids interested in watching (relative to YouTube, and Netflix, and Fortnite, and Instagram).” 

The Walt Disney Co. said it has amended chairman and CEO Bob Iger’s compensation agreement, shaving about $13.5 million from potential awards he was eligible to receive after the company’s $71.3 billion purchase of certain 21st Century Fox assets is completed.

Disney agreed to purchase the Fox assets — including cable channels FX, FXX and National Geographic; its movie studios and other assets — last year after a month-long battle with Comcast for the properties. That deal is expected to close in the first half of the year. 

Related: Iger's 2018 Comp Soars

Disney didn’t say why it amended Iger’s agreement in the filing, but its action comes on the heels of a decision made in November to change some stock awards the executive was due to receive after the Fox closing. Those changes were made after Disney shareholders voiced some concern with the size of the award Iger was to receive — $100 million. Under those changes, Iger, who had already been granted $25 million of that award, would get the rest only if Disney’s total shareholder return outperformed 65% of the companies in the S&P 500 index. The earlier deal required that Disney outperform 50% of those companies. 

According to an 8-K document filed with the Securities and Exchange Commission on March 4, Disney eliminated an annual base salary increase for Iger of $500,000 on the transaction closing date, instead maintaining his current base salary at $3 million. In addition, the new deal eliminates an $8 million increase in Iger’s target bonus opportunity, instead keeping the old target of $12 million; and reduced by $5 million an annual long-term incentive target award that would have been available after the close to $20 million.

Disney is scheduled to hold its annual meeting of shareholders on March 7. 

Hulu’s original series chief believes the Walt Disney Company will continue to back his joint-venture subscription streaming platform, despite its plans to launch its own SVOD service later this year.

“Hulu is a very important strategic asset for our owners,” said Craig Erwich, senior VP of original programming, told reporters at the Television Critics Association press tour in Pasadena, Calif. Monday.

Erwich noted Hulu’s 48% year-over-year subscriber growth in 2018 to 25 million users. “You don’t get that kind of growth without the support of our ownership,” he said.

Related: TCA 2019: Hulu To Premiere 'Catch 22' in May; Releases Video Trailer

Disney is in the process of absorbing 21st Century Fox, another co-owner in Hulu, and will have a 60% ownership stake in the platform when that acquisition is completed.

The conglomerate is also in the process of launching Disney+, a subscription streaming home for movies and TV shows, which Disney CEO Bob Iger recently labeled “the biggest priority” of 2019 for the company.

Speaking during Hulu’s fourth-quarter earnings call last week, Iger said he’d be better able to lay out long term plans for Hulu once the Fox deal closes. For now, he continues to speak in broad strokes, noting Hulu’s place in Disney’s audience grand segmentation plans that not only involve Disney+, but ESPN+, as well.

“What we said when we decided to launch ESPN+ and Disney+ is that rather than creating one gigantic fat bundle of sports, general entertainment programming and family programming, we thought we'd serve the consumer better by segregating all three,” Iger said.

“Ultimately, our goal would be to use the same tech platform to make it easier for people to sign up for all three should they want to, same credit card, same username, same password, et cetera, but give the consumer the kind of choice that we think consumers are going to demand more and more in today's world,” he added. 

The Walt Disney Co. chairman and CEO Bob Iger received total compensation of $65.6 million in 2018, an 80% increase over the prior year, according to documents filed with the Securities and Exchange Commission.

The bulk of that gain came in the form of stock awards — $35.4 million in 2018 compared to about $9 million in 2017. Iger’s base salary rose 16% to $2.9 million from $2.5 million in the prior year. In addition, he received $18 million in non-equity incentive plan compensation, up from $15.2 million in the prior year.

Related: Iger: Disney Will Run Hulu With Partners in Mind

Other executives also received healthy pay boosts in 2018, including chef financial officer Christine McCarthy (32.6%) to $11.8 million; SVP general counsel and secretary Alan Braverman (24%) to $10.4 million; and chairman, direct to consumer and international Kevin Mayer (38%) to $11.6 million.

Disney agreed to purchase certain Fox assets in December 2017 for about $52.4 billion,  but was trumped by a Comcast counter offer for the properties in June. After a one month battle, Disney emerged the victor with an offer for $71.3 billion for the Fox assets, nearly $20 billion more than it had originally bid. That deal is expected to close in the first quarter.

Walt Disney Co. chairman and CEO squashed any speculation that the entertainment powerhouse would run roughshod over its partners in Hulu once it gains control of the online video pioneer next year, telling analysts that the Mouse House will make any decisions with “an eye toward being fiscally responsible to the other shareholders.”

Disney will control 60% of Hulu once it closes its purchase of certain Fox assets by the end of the first half next year, but it will still have partners in Comcast-NBCUniversal (with 30%) and AT&T (with 10%). While speculation has been that Disney will try to buy the others out -- although some analysts hope Comcast will hold on to its stake just to tweak Disney’s nose -- Iger said the plan is to pump Hulu up with as much original programming as possible.

Iger said the intention is to increase investment in Hulu, particularly on the programming side.

“We aim to use the television production capabilities of the combined company to fuel Hulu with a lot more original programming,” Iger said on a conference call with analysts to discuss fiscal fourth quarter results.

Iger added that will also include ad-supported programming on the service. He noted that Hulu subscribers are generally 20 years younger than traditional network viewers, which he said is underappreciated but should be incredibly attractive to advertisers. He also added that with its high-quality content, there is an opportunity to increase pricing at some point.

Hulu will stick to general entertainment programming, Iger said, leaving more family oriented fare to its other direct-to-consumer offering, Disney +, which is expected to launch later in 2019. Iger gave some more details on the service besides its official name -- some analysts had taken to calling it Disneyflix, in deference to Netflix, the SVOD service many believe it is emulating -- adding that the service will be loaded with content from Disney, Pixar, National Geographic and the Marvel and Star Wars universes.

Disney reported one of its strongest quarters ever -- revenue was up 12%, operating income grew 17%, spurred mainly by huge gains in its Studio Entertainment division -- where revenue rose 50% and operating income nearly tripled. At its Media Networks, which includes cable and broadcasting networks, revenue increased 9% and operating income rose 4%. Broadcasting drove most of those gains with 21% revenue growth and a 6% hike in operating income. At the cable networks, revenue rose 5% and operating income declined 6%.

While Disney has focused intently on its direct-to-consumer offerings, Iger stressed that it is not abandoning its more traditional lines of distribution. But it also sees the handwriting on the wall.

Iger said Disney wont "de-prioritize" or "sacrifice" traditional distributors, but added, "We’re also realists. We see what’s going on in the marketplace. We see the growth of new platforms and program consumption versus channels consumption.”

Iger said it's too early to tell when that shift will happen, adding that if the company sees opportunities to move programming to DTC, it will do that.

“We can’t right now estimate in any way if that will happen,” Iger said.