DirecTV Chief Marketing Officer Vince Torres told investors Thursday that the pay TV company is indeed losing "not an immaterial amount of customers" amid a program licensing dispute with Disney, which has seen ABC, ESPN and other Disney networks blacked out on DirecTV platforms since Sept. 1. 

Torres did, however, express confidence that DirecTV can "claw back" these subscriber losses over time. 

“The way we look at it is a short-term and long-term perspective," Torres said at a Goldman Sachs investor event. "In the short term, we were offering a very rich credit to customers that are impacted, and that may never be enough for someone who is annoyed that that they can’t watch their college football game over the weekend." 

The credit Torres referred to was the $30 DirecTV is offering customers to sign up for other MVPDs, virtual and otherwise, while it sorts out its beef with Disney. 

Will these customers really come back?

Back in July 2021, just before it spun DirecTV off in a deal with private equity, AT&T said that its pay TV company had 15.412 million remaining subscribers. The was the last time that subscriber numbers were publicly reported for DirecTV. 

A source close to the company told me Thursday that the company has around 11 million subscribers dispersed across DirecTV satellite TV, DirecTV Stream and U-verse. 

So a pay TV company that has averaged around 1.5 million lost customers a year can expect to re-acquire what it loses in this carriage war? 

Tough to imagine. 

Capping a busy first week of public messaging since its pay TV carriage battle started with Disney, DirecTV took the fight to the FCC, filing a "good faith negotiating complaint" against the media conglomerate. 

DirecTV claims that at the 11th hour of negotiations, Disney threw a curveball, demanding it to drop any litigation related to the launch of the Disney/Fox/Warner joint venture Venu Sports.

Also read: Disney and ESPN Treat Us All Terribly, and It's a Problem

“Along with these anticompetitive demands, Disney has also insisted that DirecTV agree to a ‘clean slate’ provision and a covenant not to sue, both of which are intended to prevent DirecTV from taking legal action regarding Disney’s anticompetitive demands, which would include filing good faith complaints at the Commission. Not three months ago, however, the Media Bureau made clear that such a demand itself constitutes bad faith," DirecTV said in its FCC filing. 

Disney responded with this statement: “We continue to negotiate with DirecTV to restore access to our content as quickly as possible. We urge DirecTV to stop creating diversions and instead prioritize their customers by finalizing a deal that would allow their subscribers to watch our strong upcoming lineup of sports, news and entertainment programming, starting with the return of Monday Night Football.”

Disney channels including ESPN and ABC went dark on the nation's third largest pay TV distributor on Sept. 1. DirecTV has cast the negotiations as a referendum on pay TV's future, demanding that Disney move away from forced network bundling and capitulate to letting skinny bundles of genre-based networks happen.

For their part, it was exactly this kind of bundle that Disney, Fox and Warner Bros. Discovery were planning with Venu Sports, before an antitrust suit filed by Fubo -- and backed by DirecTV -- resulted in Venu receiving a preliminary injunction. 

Speaking to equity analysts on the first business day back after ABC, ESPN and other Disney channels suddenly went dark on his platform over the Labor Day holiday weekend, DirecTV CFO Ray Carpenter said the pay TV company will battle the media conglomerate "as long as it needs to" to secure fundamental changes in the way networks are licensed and distributed. 

“This dispute is not a run-of-the-mill dispute," Carpenter said. "This is not the kind of dispute where we’re haggling over percentage points on a rate. This is really about changing the model in a way that gives everyone confidence that this industry can survive."

Also read: Disney and ESPN Treat Us All Terribly, and It's a Problem

Just as Charter Communications a year ago drew a line in the sand, demanding that Disney give its pay TV customers access to the SVOD platforms to which the media company was diverting much of its best content, DirecTV wants to distribute what Carpenter calls "skinny, genre-based" bundles of channels. 

DirecTV has released data suggesting that the pay TV audience is somewhat segmented and niche, with less than 40% of users regularly tuning into live sports, and less than 40% of the audience regularly watching pure entertainment channels. "News" and "kids" represent other niche segments. 

Also read: DirecTV Programming Chief: The Venu Sports Guys 'Got Caught With Their Hands in The Cookie Jar in a Big Way'

Disney, along with other media conglomerates, has long resisted this distribution scheme. But the company opened Pandora's Box when it formed a joint venture with Fox and Warner Bros. Discovery to distribute just its linear sports channels ... in a $43-a-month package, branded Venu Sports, that could best be described as a skinny, genre-based bundle. 

The launch of that product has been delayed, with a DirecTV-backed antitrust suit filed by rival pay TV company Fubo successfully obtaining a preliminary injunction against the JV. 

Now that Disney is negotiating in a dystopian pay TV world it created, Carpenter stressed that the blackout -- which started less than half an hour before the kickoff of the USC-vs.-LSU game on ABC Sunday -- could drag on for a while.

Oh, and he said that it was Disney's decision to pull its channels. 

"We were asking to keep the signal up, and that’s usually the case when we run into these situations," Carpenter said. "And unfortunately, Disney was not willing to entertain that. In fact, the timing of when they decided to pull the content was absolutely orchestrated to put the most pain and disruption on our customers."

Bango, the subscription technology provider that facilitates bundling for streaming companies, announced Monday a strategic agreement with Disney.

The company plans to expand its Digital Vending Machine (DVM) by adding Disney Plus to its host of partners.

Through the agreement, Disney Plus will be available in select markets to sell directly attached to mobile phone and broadband plans, as well as with other DVM partners including Netflix and Amazon Prime.

Also Read: Groundhog Day: Just Like Last Year, Disney Pay TV Blackout Imperils Football's Opening Weekend for Millions of Viewers

“After just two years, Bango's DVM now has almost 100 connected partners, including Netflix, Amazon Prime and Xbox Game Pass,” said a Bango rep via email. “The Bango DVM enables mobile operators to offer Disney Plus to their customers through promotional and a la carte offers in subscription hubs where multiple subscriptions can be paid for and managed all in one place.”

According to a press release, Bango “takes care of all technical aspects” when creating and managing subscription offers for its clients.

It’s not the first time Disney has engaged in bundling, with its Hulu and Max package that launched earlier this summer. But until now the company hasn’t tried expanding its reach through this method of indirect bundling.

A representative for Bango pointed out that this “marks a significant strategic shift [for Disney], unlocking previously untapped channels, and facilitating direct relationships with telcos and other reseller partners with ease.”

“Disney Plus is already a top entertainment choice for consumers worldwide and making the service available through Bango will provide more opportunities to reach new customers and further expand its already impressive membership base,” wrote Bango’s CMO, Anil Malhotra in a press release. “As indirect subscriptions continue to grow, Bango ensures a seamless and quick solution for market-leading products and services.”

Bango currently has agreements with several large providers including Amazon, Google, Netflix, Optus, T-Mobile and Microsoft.

On the evening of August 31, 2023, millions of viewers sat down to watch a competitive nationally televised opener to the college football season on ESPN, featuring defending Pac-12 champion Utah upsetting Florida. 

To the surprise of many of Charter Communications' 14.7 million pay TV customers, a blackout of ESPN, along with ABC O&Os and 24 other Disney cable networks, would begin that evening, depriving them of access to the game ... and ultimately changing the way pay TV program licensing negotiations are handled. 

It's definitely no coincidence, given the way these things are intentionally timed, but Disney is on a very similar football-disrupting path with DirecTV that very well could deprive around 11 million DirecTV viewers access to football-laden ESPN and ABC, as well as other Disney channels starting Sept. 1. 

A source close the negotiation told me the primetime ESPN matchup on Saturday between No. 7 Notre Dame and 20th-ranked Texas A&M will finish before the negotiating deadline and will be unaffected. 

But if hot blackout action does break out, Sunday's game between No. 13 LSU and 23rd-ranked USC, set to be simulcast on ESPN and ABC, wouldn't be available on DirecTV satellite, DirecTV Stream or U-Verse TV. (ESPN has a full rundown of the nearly 30 college games being presented on ESPN this weekend.)

And just like last year, when Charter customers were deprived of seeing Aaron Rodgers' ultimately short-lived debut as a New York Jet on Monday Night Football, DirecTV users could miss out on Rodgers return to the NFL field Monday night when the Jets take on the Super Bowl runner-up San Francisco 49ers. 

The negotiations between DirecTV and Disney come after the latter's joint venture with Fox and Warner Bros. Discovery, Venu Sports, was hit with a preliminary injunction. Virtual pay TV operator Fubo, with affidavit assistance from DirecTV, successfully argued that the JV is anti-competitive, because it gave itself flexible program distribution terms -- such as the ability to create genre-based bundles -- that pay TV operators have long sought and been rebuffed over. 

Also read: DirecTV Programming Chief: The Venu Sports Guys 'Got Caught With Their Hands in The Cookie Jar in a Big Way'

In a declaration made last week, DirecTV programming chief Rob Thun said he'll be looking for those kind of flexible network licensing terms when he negotiates with each of the Venu partners over the next 12 months. 

Disney’s president of platform distribution, Justin Connolly, told the Penske showbiz trades, “I think, or I know, that they are trying to spin and push this narrative that they want to explore more flexible, skinnier bundles, and that we refuse to engage on that, and bottom line: That is blatantly false, and we’ve been negotiating with them for weeks, and we proposed a variety of flexible options … but yet they haven’t engaged with us on the options." 

The Walt Disney Co. has made a significant executive addition for its subscription streaming business, hiring away 13-year YouTube veteran Adam Smith and naming him chief product and technology officer.

Smith, who oversaw subscription products YouTube Music and YouTube Premium as VP of product management at Google, will report to Disney Entertainment co-chairs Alan Bergman and Dana Walden, as well as ESPN chairman Jimmy Pitaro. 

Starting September 3, Smith will oversee a global Product and Technology group spanning Disney’s entertainment and sports media businesses. He will be responsible “for driving technology strategy, development, deployment and continued innovation across the company’s streaming platforms and networks, portfolio of consumer digital touchpoints, proprietary advertising technology, emerging technologies and more,“ according to the conglomerate.

 “We’ve been aggressive in advancing our technological capabilities to better support our world-class media, streaming and advertising businesses, and Adam brings a bold, consumer-focused vision for the future and a proven ability to effectively lead global teams in implementing ambitious, scalable and flexible products and technology that will continue to elevate storytelling as the center of the Disney experience,” Bergman, Walden and Pitaro said in a joint statement. 

At YouTube, Smith helped build some of the company’s biggest consumer-facing products, driving its Music and Premium offering to more than 100 million subscribers. 

Added Smith: “Disney has built and nurtured an unparalleled portfolio of brands bringing joy and delight to fans of all ages, thanks to a culture of creativity that embraces innovation. I believe Disney is uniquely positioned to thrive in the next evolution of media and has made significant progress in a very short time while keeping storytelling front and center.”

Should a third-party appraisal of Hulu match NBCUniversal's valuation for the streaming platform, Disney will have to come up with an additional payment of as much as $5 billion to finally close its purchase of NBCU's 33% stake in the former joint venture, a Disney's 10-Q filing on Tuesday revealed.

Last November, Disney made what was an initial payment of $8.61 billion to NBCU to acquire the last remaining share of Hulu it didn't already own. That amount covered one-third of a $27.5 billion "floor valuation" of Hulu. The two sides agreed to more precisely appraise Hulu's value to determine if Disney owed more than that. 

Also read: Disney Reports $2.6 Billion Net Income as Streaming Turns Profitable in Q3

Unable to agree on a valuation, Disney and NBCU in May decided to abide by a third-party appraisal of Hulu. 

"During the initial phase of the appraisal process, [Disney's] appraiser arrived at a valuation that falls below the guaranteed floor value, while NBCU’s appraiser arrived at a valuation substantially in excess of the guaranteed floor value," Disney said in its SEC filing. 

"Once the arbitration is completed, determination of the final equity fair value will take into account the valuation of a third appraiser pursuant to the appraisal process as resolved by the arbitration. As such, if the third appraiser’s equity fair value determination were equal to or below the guaranteed floor value, the Company would not be required to pay NBCU any additional amount. Conversely, if NBCU’s appraisal were deemed to be valid and the third appraiser’s equity fair value determination were consistent with the NBCU’s appraiser’s valuation, [Disney] would be required to pay NBCU an additional amount of approximately $5 billion as its share of the difference between the equity fair value and the guaranteed floor value. If the third appraiser’s equity fair value determination were between the valuations of the [Disney's] and NBCU’s appraisers, the incremental amount would likewise be between zero and approximately $5 billion."

Hulu had 51.1 million subscribers as of the end of June, up 2% year over year. 

Disney’s Marvel Studios, after a series of box-office disappointments, paired up two of its biggest stars to deliver the most popular film release of 2024, as well as any R-rated film in history.

Deadpool & Wolverine tallied $211 million in domestic ticket sales in its first three days of release, ranking as the eighth-best box-office debut of all time.

Internationally, the Ryan Reynolds-Hugh Jackman feature captured $233.3 million for a global tally of $444 million.

It’s the biggest global opening since James Cameron’s epic sci-fi fantasy Avatar: The Way of Water generated $439 million in 2022, and the biggest domestic opening for Marvel since the release of Spider-Man: No Way Home garnered $260.1 million in 2021.

Deadpool &. Wolverine is the 34th film released based on characters from the so-called "Marvel Cinematic Universe. It's also the 34th consecutive MCU release to debut at No. 1 at the domestic box office. But it's the first installment to receive an R-rating since Disney assumed control of Marvel.

While the numbers would be impressive no matter when they arrived in Marvel’s timeline, Deadpool & Wolverine’s performance is especially notable in the midst of a post-pandemic box office slump for the superhero genre, which some have even dubbed “superhero fatigue.”

Last year, The Marvels generated just $84 million through its entire global theatrical run, while Ant-Man and the Wasp: Quantumania only gathered $214 million.

Madame Web, which was released by Sony and based on Marvel IP, generated just $100.298 million for its entire worldwide theatrical tour. 

Also Read: Poor Tracking for 'Madame Web' Forecasts What Will Likely Be Marvel's Biggest Bomb Ever

Deadpool & Wolverine surpassed that total on its first day..

The film marks Reynold’s third time playing this version of comic character Deadpool (after a far less funny, cameo iteration in 2009’s X-Men: Origins). It's Jackman’s 10th time in the role of Wolverine, starting with 2000’s X-Men.

Directed by Shawn Levy, Deadpool & Wolverine cost a reported $320 million to make and market worldwide.

While it’s likely a welcome victory for Disney, it remains to be seen whether the franchise’s success will translate to the entirety of the MCU.

Deadpool & Wolverine is largely a tonal departure for Marvel’s films, and lacks connections to the universe’s current narratives, but Disney may look to its performance when shaping future projects.

Ticket buyers gave Deadpool & Wolverine a 97% fan approval rating on RottenTomatoes, behind only Spider-Man: No Way Home, which sports a 98% audience score.

As of Deadpool & Wolverine’s release, Disney is responsible for 16 of the top 20 highest-earning domestic opening weekends of all time, with the MCU owning 11 of the top 20.

After sending a letter to top executives at Disney, Fox and Warner Bros. Discovery in April, questioning them about their Venu Sports joint venture, congressional Democrats Jerry Nadler and Joaquin Castro said they found the responses "insufficient." 

So they sent a follow-up missive. 

The most recent memo, dated June 7, claims the JV will unite the owners of 80% of all U.S. sports media content under one umbrella. And it could reduce competition, risk the privacy of users and lead to collusion.

Venu came under fire shortly after it was introduced in February. Virtual pay TV provider Fubo filed an antitrust lawsuit, claiming that the deal would hurt competition and inflate prices for viewers.

Other critics soon, including Nadler, Castro and U.S. Justice Department, which is also investigating the JV, soon joined in.

Also Read: Nearly 60% of Sports Fans Age 18-49 Say They'll 'Likely' Subscribe to Venu Sports

“We still have not received answers about the firewalls your companies may implement to prevent collusion,” they wrote. “The precautions you may take to ensure consumer privacy; or the methods you may use to determine pricing of the new service.”

The two congressmen added that the “vague assurances” Venu partners have provided thus far seem “contradictory. They said the lack of key details (like price and launch date) “hard to believe.”

“Your companies exert unmatched control over the entire sports media ecosystem,” they wrote. “Without care, your joint venture has the potential to reshape this already-concentrated space to the detriment of consumers, sports leagues, and third-party distributors.”

The new letter asks for answers to seven questions by June 21. Nadler and Castro also requested that the Department of Justice be copied on the response, as it reportedly plans to inspect the joint venture.

Representatives for Venu replied to the initial letter in late April, calling the service “pro-consumer, additive viewing option for sports viewers” that will address the increasingly “fragmented and complicated” sports-streaming landscape.

“Nothing will be exclusive to the new streaming service -- every linear network available on this new streaming service will continue to be available to consumers across all existing methods, including traditional cable, satellite TV, and streaming video platforms like Hulu+Live and YouTubeTV,” company executives wrote.

According to Venu partners, the service is set to launch this fall, with an expected engagement of 1 million subscribers by the end of the year, and 5 million within five years.

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.

The Walt Disney Co.’s upfront presentation went on with a connections theme, and Bob Iger himself appeared onstage moments after it began. Emma Stone introduced Iger, Disney CEO, who said it was his first upfront show appearance since 1994. 

Iger said he turned up “to express gratitude to the talented creative people” at Disney, and “to share my tremendous optimism” for the company. 

“To say a lot has changed since 1994 would be an understatement,” he said, and noted that he was not talking about hair color or clothing. 

 Also Read: Continuing Coverage of the 2024 Upfronts

What hasn’t changed, he added, is that success in the industry is predicated on one thing: “Telling great stories.”

Next up was Rita Ferro, Disney president of global advertising, who first appeared as an animated character next to Peter Griffin on Family Guy then strolled onstage. She mentioned that “half of the world’s population connects with Disney every day” and outlined the company’s three priorities: relationships with talent, understanding the audience and “relentless focus on our guests.”

Then Ryan Reynolds came out, talking up Deadpool & Wolverine, out July 26, and his Nat Geo show Underdogs, about the “troublemakers of the animal kingdom.”

When his Wrexham FC co-owner Rob McElhenney came out, the two shared that Welcome to Wrexham will advance to season four. “It is a true Cinderella story,” said Reynolds. 

He pointed out that McElhenney’s It’s Always Sunny in Philadelphia will do season 17. “We love doing it and I get to work with an incredible cast,” he said, including Kaitlin Olson, who strolled out to speak about new ABC drama High Potential. “It’s such a special story” about a single mother with a knack for solving crimes, she said. 

Then it was Jim Gaffigan, sharing his own Disney thoughts, including his favorite ride — the tram back to the hotel. 

“You may be wondering why I am here — am I just eye candy?” he said, then shared about a new Hulu comedy special franchise, which begins November 22 with … Jim Gaffigan. 

It’s called Laughing Now. 

Then it was Jalen Hurts and Quinta Brunson, talking Abbott Elementary and the Philadelphia Eagles, then Jason Kelce, new member of ESPN’s Monday Night Countdown team. “I know what it takes to be great — it takes a great team,” he said. 

Scott Van Pelt, Ryan Clark and Marcus Spears joined him, and said the full Monday Night Football schedule would be released May 15. The opener? Niners-Jets. 

Ryan Seacrest was next, sharing how “the greatest of all time,” Serena Williams, would host the ESPYs. 

He also spoke about a Bruce Springsteen docuseries called Road Diary on Hulu. On video, Springsteen shared a memory of him and Little Steven getting booted out of Disneyland 40 years ago for a dress code violation. 

“The good news is, we’re back!” he said. 

The series will be about how the E Street band puts together a tour, and “everything that makes our concerts a personal experience,” said Springsteen. 

Then David Muir, World News Tonight anchor, came out, saluting Robin Roberts’ 20 years on Good Morning America. She came out and noted the job he’s done on the evening newscast. 

“David, It’s because of your connection with the audience,” she said. 

Stephen A. Smith was next, talking about the NBA and the “incredible team at ESPN”, with Chris Paul joining him. Paul will be a guest analyst for the NBA finals. 

Nathan Fillion and Chewbacca then came out, speaking (mostly Fillion) about Star Wars show The Acolyte and The Rookie. Chewie missed a cue, which Fillion chalked up as “a Wookie mistake.”

The Acolyte cast, including Carrie-Ann Moss, came onstage. The show starts June 4 on Disney Plus. 

Ellen Pompeo shared about her “compelling family drama” Natalia, about an adoption that does not go as planned. 

Selena Gomez spoke about the Wizards of Waverly Place reboot, called Wizards Beyond Waverly Place, on Disney Plus and Disney Channel this year. 

Her Only Murders in the Building castmate Steve Martin came out, wondering, “are we just tossed aside?” as Gomez starts the new show. Next out was Martin Short, also of Only Murders, who said, “how dare you do a show without us!”

An Only Murders trailer followed, before Sterling K. Brown and James Marsden came out to discuss Hulu drama Paradise. Marsden plays the former president and Brown the head of security. “It’s got mystery, it’s got heart and drama,” said Marsden. 

A trailer of season three of The Bear showed, featuring some “non-negotiable” rules from Carmy about the new restaurant. 

Then it was college football, as Vince Young and Adrian Peterson discussed college rivalries. College GameDay will happen overseas for the first time, in Dublin. 

The presentation moved on to Marvel, where Katherine Hahn, Joe Locke and Patti Lupone

discussed the WandaVision spinoff Agatha All Along, due out around Halloween. 

Dominique Thorne talked up Ironheart, and Charley Fox and Vincent Donofrio discussed Daredevil: Born Again. 

“It is unique and dark and intense,” said Donofrio. 

Then it was women’s basketball, with South Carolina coach Dawn Staley coming out to share how to construct an undefeated season, before Angela Bassett strolled out. 

“Women both in front of and behind the camera are extraordinary forces,”  said the star of 9-1-1 and narrator of Nat Geo’s wildlife program Queens. 

Kim Kardashian announced three Ryan Murphy series, Doctor Odyssey, Grotesquerie and American Sports Story: Aaron Hernandez, and Michelle Williams detailed Dying For Sex. 

Kerry Washington said she is “always on the hunt for projects that break convention and have a specific point of view,” and shared that Unprisoned and Reasonable Doubt will both be back for season two. 

Finally Jimmy Kimmel came out to skewer the industry. “I heard Amazon left you guys on the porch,” he said, a nod to the streamer’s late-starting presentation earlier that day. 

He said he missed the event two years ago because of COVID-19, then last year because of the writer’s strike. He lamented not coming up with a good excuse this year.

He then introduced “AI-ger,” a Disney CEO that will be around for a bit. “Bob isn't going anywhere ever again,” said Kimmel. “We uploaded him into the cloud.”

He introduced a new take on The Bachelor, and The Golden Bachelor, and The Golden Bachelorette, called The Golden Retriever, then signed off. 

“Unless something terrible happens, I’ll see you next year,” said Kimmel. 

Back on November 1, The Walt Disney Co. seemed to culminate one of the most active discussions in media entertainment, agreeing to purchase Comcast's remaining 33% share in Hulu. 

But it turns out the drama isn’t over. 

Reuters reported Tuesday that the two companies are looking to hire a third outside financial adviser to determine the value of Comcast's share in the streaming company. 

Also read: Disney Entertainment DTC Business Gets Out of the Red in Q2

This comes after Disney's adviser, JPMorgan Chase, and Comcast’s consigliere, Morgan Stanley, came in with valuations that were more than 10% apart from one another. 

As per the purchase agreement carved out last year, if the valuations had been within 10% of one another, the two sides would have met in the middle, agreeing to the average of the two sums. 

As it happened, JPMorgan Chase valued Hulu at $27.5 billion, while Morgan Stanley put the number at above $40 billion.

The valuation will now be determined based on the average of the third-party valuation and whichever of the two existing appraisals is closest to the new one. 

And Comcast and its NBCUniversal division will receive 33% of whatever that works out to be. 

The valuation can be no lower than $27.5 billion, which is the floor value assigned to Hulu in the 2019 “put call” agreement between the two media giants, the deal that paved the way for Comcast to sell its share in the former joint venture. 

Hulu ended Disney's fiscal second quarter at the end of March with 50.2 million subscribers, up about 500,000 sequentially and 2 million customers year over year. 

Disney has already integrated Hulu into its flagship Disney Plus streaming app. 

Veteran technology leader Aaron LaBerge will step down from his role as chief technology officer of Disney Entertainment and ESPN on July 1 and will transition into a new role as CTO for sports betting company Penn Entertainment. 

The move is being spun amicably. In a memo to Disney staff, LaBerge said he's departing to assume a new role that will allow him to be “home for my family.” He also said that he’ll continue training direct report Chris Lawson, currently executive VP of content operations for Disney Entertainment and ESPN, to assume Disney's CTO role on an interim basis. 

Also read: LaBerge Named CTO For Disney DTC Unit

LaBerge has spent more than 20 years at Disney across two terms, rejoining ESPN in 2013 after a five-year stint as co-founder and CEO of startup Fanzter. He assumed the CTO role at ESPN in 2015, adding oversight to Disney Entertainment in 2018. 

LaBerge leads all Disney technology initiatives, including Disney Plus, Hulu and ESPN Plus. 

“Having overseen a global organization of thousands of engineers, product developers, designers, technologists, and data scientists that created some of the largest scale and most successful media properties in the world, there is no better candidate to lead our Technology and Interactive division into its future,” Penn Entertainment president and CEO Jay Snowden said in a statement.  

Florida Governor Ron DeSantis' handpicked special district board that oversees The Walt Disney Co.’s Florida theme park properties reached a settlement agreement Wednesday in a court battle over control of the Disney World's future development.

In a meeting, board members of Florida’s Central Tourism Oversight District approved the settlement agreement, ending nearly two years of litigation sparked by Disney’s public opposition to Florida’s “Don’t Say Gay” law.

In the months following Disney’s opposition to the bill, DeSantis orchestrated a takeover of the governing district with the help of Republican-controlled Florida Legislature, appointing a new board of supervisors and ending Disney’s long-held ability to govern itself like a sovereign territory.

The Governor's lawsuit claimed that Disney conducted a “series of eleventh-hour deals,” in order to green light nearly a decade of developments in the time before the DeSantis-backed board would assume control, stripping it of its regulatory power in the process.

Disney asserted that those deals were perfectly fair and legal, while the board said they were done covertly and illegally.

“We are pleased to put an end to all litigation pending in state court in Florida between Disney and the Central Florida Tourism Oversight District,” said Jeff Vahle, president of Walt Disney World Resort, in a statement. “This agreement opens a new chapter of constructive engagement with the new leadership of the district and serves the interests of all parties by enabling significant continued investment and the creation of thousands of direct and indirect jobs and economic opportunity in the State.”

DeSantis said at a news conference on Wednesday that “we have been vindicated on all fronts,” according to AP News. “I’m glad that they were able to do that settlement. Those 11th hour covenants and restrictions were never going to be valid. We knew that.”

As part of the settlement, Disney has agreed to pause its appeal in a separate lawsuit it filed against DeSantis last year, alleging he used his position to retaliate against it for opposing the controversial 2022 bill.

This deal in the long battle between Disney and DeSantis comes amidst a critical shareholder dispute between Trian Fund Management’s Nelson Peltz, as he attempts to infiltrate Disney’s board.

Former Apple and Hulu media and technology executive Pete Distad has been named CEO of the new sports-themed joint streaming venture being launched by Disney, Fox and Warner Bros. Discovery. 

Distad worked at Apple from 2013 - 2023, last serving as head of the tech titan's sports video operations. Prior to that, he served on the launch team at Hulu. Distad will assume oversight of all aspects of the joint venture, including overall strategy, distribution, marketing and sales.

He was reported several weeks ago to be a favorite for the top job at the so-called "Spulu," the still officially unnamed venture that will see Disney, Fox and WBD bundle their linear sports channels in a vMVPD-like bundle. 

Also read: Former Apple and Hulu Exec Pete Distad Reportedly Tops the Short List to Lead the Big Disney-Fox-WBD Sports Streaming Venture

“This is an incredible opportunity to build and grow a differentiated product that will serve passionate sports fans in the U.S. outside of the traditional pay TV bundle,” Distad said, in a statement. “I’m excited to be able to pull together the industry-leading sports content portfolios from these three companies to deliver a new best-in-class service.”

Disney/ESPN, Fox and WBD added the following joint statement: “Pete is an accomplished innovator and leader who has extensive experience with launching and growing new video services. We are confident he and his team will build an extremely compelling, fan-focused product for our target market.”

Distad worked at Apple from 2013-2023, where he was responsible for the business, operations and global distribution for video, sports and Apple TV Plus. While there, he launched the new Apple TV in 2015, and later led teams that launched the Apple TV app, Apple TV Plus, and MLS Season Pass. He originally joined the company to lead product marketing for the Apple TV hardware product.

Working at Hulu from 2007 - 2013, Distad was part of the original Hulu launch team, overseeing customer acquisition and retention, distribution and marketing as senior VP of marketing and distribution.

He'll face a range of challenges at Spulu. Among them: pay TV operators who are upset that they've been thwarted for years by the JV's principals in their own efforts to carve out consumer-friendly, genre-themed skinny programming bundles; and antitrust concerns from the U.S. Justice Dept. 

Taking a step back helped Kavita Vazirani take a giant leap forward to advocate for others.

Since 2022, Vazirani has led The Walt Disney Co.’s integrated research and insights team, supporting all media and entertainment distribution businesses and functions across the Disney Entertainment Group. Where she started, though, was as a research manager for Comcast Cable. Early on, Vazirani said, Comcast lacked infrastructure, and it was exciting to help build a Media Sciences Group that fueled a data-driven approach to media spend and predictive modeling to forecast outcomes. 

She was responsible for strategy development, planning and placement of more than $1.5 billion in paid or owned media across Comcast’s portfolio and rose to senior VP of media strategy and sciences.

“I loved the company and the culture,” Vazirani said of Comcast. “It was a big company, but still had that entrepreneurial feel.” 

In 2013, Comcast completed its acquisition of NBCUniversal and Vazirani became NBCU’s executive VP of insights and measurement. 

Vazirani focused on aligning NBCUniversal’s research, insights and measurement capabilities across all of the media company’s platforms and partnerships. She oversaw measurement and research initiatives across marketing and agency partners beyond traditional viewing patterns.

COVID-19’s Silver Lining

Then the COVID-19 lockdown changed everything. 

“I have three children. One has Down syndrome, and it was especially challenging to do virtual school with her,” Vazirani said.

Though her husband is a stay-at-home dad, the lockdown took a toll on the whole family. At the same time, the industry she worked in for decades was in a state of disruption.

“I was spending a ton of time at work, even though it was from home,” she said. “And I’m watching my husband try to do seventh grade with our daughter while our two other children are in their bedrooms in virtual classrooms.”

She said she felt overwhelmed with everything. 

Over the years while mentoring others, there’s talk of work/life balance. Now it applied to her and Vazirani shared great advice she received from a friend: “There’s a lot of balls you juggle,” she said. “The one that’s your family is made of glass and when you drop it, it will break. The other balls will bounce back. That advice stood out in my head.” 

Vazirani made the difficult decision to take a break from work and focus on her family’s needs. 

After six months at home, she took on consulting projects and connected with former colleague Debra OConnell, who is now president, News Group and Networks at Disney Entertainment. So, when a role at Disney opened up, Vazirani was ready and OConnell became her boss. 

“Kavita is one of the most strategic thinkers in the research and insights area,” OConnell said. “Her ability is not limited to simply viewing and analyzing this field as it is, but also discerning how this data may evolve in a changing industry and recognizing opportunities to work holistically across teams to achieve results.”

In addition to her role leading a modern integrated research and insights team, Vazirani runs the Disney Entertainment Group’s DE&I Council.

“Kavita is the type of person who is always thinking about other people, and how we can all work together to make the world a better place,” OConnell said. “It’s that kindness and thoughtfulness that makes her an incredible leader and the natural choice to lead our DE&I team.”

Advocating for Others

Vazirani was born in India, lived in Hong Kong and came to the U.S. to attend college. Her life’s journey and her family’s path make her a strong advocate for inclusion.

She supported women through mentor programs. She’s passionately dedicated to her local Down syndrome parenting groups, working tirelessly to help parents who are expecting a child, engage school districts and create a strong community for families.

“I always think about, how do we create opportunities for new thinking?” she said.

The brief career break was a move that would have scared many, but not Vazirani. It allowed her to focus on her family while positioning her to jump into a challenging new role stronger than ever. 

With the Walt Disney Co. facing a proxy fight on two fronts against activist hedge funds trying to seed the company’s board of directors with their own candidates, Business Insider reported that an unknown investor is offering to buy votes at the company’s April shareholder meeting at a rate of $100,000 per 500,000 votes under a controversial “Shareholder Vote Exchange.”

Five hundred thousand votes works out to roughly $55 million in shareholder equity, and, yes it is perfectly legal.

Morning Brew pointed out that the buyer could be Blackwells Capital or Nelson Peltz’s Trian Fund Management, both of which are fighting for more control of the Magical Kingdom, or it could be a group backing CEO Bob Iger’s vision to restore Disney to its former glory.

The publication also noted that as of Wednesday there over 20,000 Disney shareholder votes had been offered for sale and that the company has a large percentage of smaller shareholders who may be less involved or even aware of the high-end drama going on.

The company was battered by a disastrous series of missteps from Iger’s predecessor (and one-time successor) Bob Chapek, who was unceremoniously ousted from the CEO’s office after just 18 months on job.

Earlier this week, Nelson Peltz’s Trian Fund Management released a 130-page manifesto trashing Bob Iger’s current strategy and outlining what they would do differently if their candidates are elected.

Iger responded that he and his senior managers were trying to stay focused on making the complex company more profitable amid such distractions.

In October, Best Buy decided that physical media just wasn’t worth the lucrative shelf space it was taking up and announced that it would stop selling DVDs and Blu-rays altogether. “To state the obvious, the way we watch movies and TV shows is much different today than it was decades ago,” a Best Buy spokesperson told Variety at the time. “Making this change gives us more space and opportunity to bring customers new and innovative tech for them to explore, discover and enjoy.”

Earlier this week, Barstool Sports reported that Best Buy had carried through on that pledge.

Meanwhile, The Walt Disney Co. reached a deal yesterday to license manufacturing and distribution of its physical media in the U.S. and Canada, including DVDs, Blu-ray Discs and 4K Ultra HD Blu-rays, to Sony Pictures Home Entertainment.

The deal includes the company’s vast catalog of titles, along with any new releases.

As part of the deal, Disney is shuttering its subscription service and online store, the Disney Movie Club, which sold Blu-rays and DVDs of Disney films.

Disney informed a reported 10 million Movie Club members by email as well as on its website yesterday that the service will stop taking orders in late May and shutter entirely on July 20.

Sony will take over marketing and distributing the discs to retailers.

The move comes after Netflix mailed out its last rental DVDs in September, sending out random bundles of DVDs to all remaining customers and telling them to just keep them, on the house. It was one way to get rid of excess inventory. They probably would have just ended up in landfills otherwise.

That leaves Redbox as one of the last left standing in physical media with its DVD rental kiosks. But it’s now a big fish in a rapidly evaporating pond. Chicken Soup for the Soul purchased the struggling rental business in 2022 for $50 million, assuming Redbox’s $325 million in debt in the process.

But in its recent SEC filings Chicken Soup raised “substantial doubt” as to whether it can “continue as a going concern” largely due to that debt.

Last summer, Next TV reported that a tally from the Digital Entertainment Group, which gets sales data directly from studio suppliers, estimated the entire physical rental market in the U.S. at just $502 million for the previous year, with Netflix reporting $146 million in rental business in its final year in business.

Former Apple and Hulu executive Pete Distad is the "top candidate" to lead the new joint streaming venture announced last week by Disney, Fox and Warner Bros. Discovery, according to digital newsletter platform Puck.

The Wall Street Journal, meanwhile reported that Distad, who ran video and sports businesses at Apple before departing last May, is "among the top candidates" for the job. 

In addition to serving on the launch team for Apple TV Plus, while also overseeing relationships for Apple with Major League Soccer and Major League Baseball, Distad was around at as a marketing and distribution executive at Hulu when NBC, Fox and Disney hoisted Hulu in 2007. 

Also read: Why ‘Re-Bundling Has To Happen’: Breaking Down the New ESPN, TNT Sports and Fox Sports Streaming JV

Last week, Disney, Fox and WBD announced that they are going sell a joint live-streamed bundled of their pay TV sports channels. Leadership or the project is still unannounced, as is a price, launch date and name. 

None of the media companies involved in the joint venture are confirming Distad's status at this point. A consultant close to the companies only told us that Distad is only "director level" in terms of stature. 

Listing his own Apple title as "Sr. Director, Video/Sports/TV+ Business, Operations, and Distribution," Distad does, however, seem to have the diversity on his resume that the JV partners are looking for: marketing, engineering, relationship-building, etc, etc.

And as the masked consultant we spoke to suggested, none of the three CEOs who made this joint venture "want a super independent person in that role."

The Walt Disney Co., under pressure from investors, reported higher fiscal first-quarter earnings as losses from its direct-to-consumer business fell substantially.

CEO Bob Iger opened the company's earnings call by saying the long-awaited direct-to-consumer version of ESPN would be arriving in fall 2025. He added that former Alabama head football coach Nick Saban will be joining the networks as a commentator. The new streaming joint venture announced by ESPN, Fox and Warner Bros. Discovery launches this fall.

He also said Disney Plus would be the exclusive home of Taylor Swift's concert film, starting March 15. Disney Plus will show the entire concert, including the song Cardigan, Iger said. It will also have four acoustic songs not in the theatrical or digital version of the film

Disney has also taken a $1.5 billion stake in Epic Games, with Disney storytelling integrated into Epic’s Fortnite video game.

Disney Plus “core” subscribers fell 1.3 million from the end of September, a drop expected after prices were increased in the quarter.  The company said it expects to add between 5.5 and 6 million subscribers in the second quarter.

Also Read: New Sports Venture Not Open to Addtional Partners: Lachlan Murdoch

Hulu subscribers rose 1.2 million.

Disney’s direct-to-consumer business had a loss of $138 million in the quarter, down 86% from a year ago. DTC revenues rose 15% to $5.5 billion.

The DTC business had a $420 million operating loss in the fourth quarter. 

Including ESPN Plus, Disney’s streaming businesses lost $387 million.

Disney now says it expects its streaming business to reach profitability in the fourth quarter of fiscal 2024 and ultimately to have double-digit operating margins, according to CFO Hugh Johnston.

The company said that it cut more than $500 million in selling, general and administrative and other operations expenses in the quarter. Disney is on track to exceed the $7.5 billion in cost cuts promised by Iger a year ago, it said.

Disney and Iger are facing proxy challenges from Nelson Peltz’s Trian Fund and Blackwells Capital, which are seeking seats on Disney’s board.

Trian has nominated Peltz and former Disney executive Isaac Perlmutter to be directors. (Disney contends Perlmutter, who was fired, has a vendetta against Iger.)

Trian argues that Disney should work to achieve Netflix-like margins for its streaming services, restore its creative leadership and box-office performance and commit to a reasonable payback period and return before launching a direct-to-consumer version of ESPN.

Blackwells is seeking three seats and said Disney should explore splitting into three companies. “Disney may simply be too complex for any one successor to Mr Iger to manage holistically,” Blackwells said.

In the first quarter, Disney had net income of $1.91 billion, or 1.04 a share, up from $1.28 billion, or 70 cents a share, a year ago.

The company said it expects full-year earnings per share to be up 20%.

Revenues were flat at $23.5 billion.

Earnings exceeded Wall Street expectations, but revenue was below forecasts.

To make shareholders happy, Disney said its board declared a cash dividend of 45 cents a share, a 50% increase. Disney will also be buying back share for the first time since 2018, Iger announced.  The company plans to buy $3 billion worth of shares in fiscal 2024.

Disney also said that ESPN’s domestic business grew both revenue and operating income compared to a year ago, which might allay concerns that ESPN’s business is being hurt by cord-cutting and rising sports-rights costs.

In the fourth quarter, Disney added 7 million “core” Disney Plus subscribers.

At the end of the fiscal first quarter, Disney Plus had 111.3 million “core” subscribers, down from 112.6 million in the third quarter.

Disney Plus Hotstar subscribers rose to 38.3 million subscribers from 37.6 million subscribers in the fourth quarter. 

Domestic Disney Plus subscribers fell to 46.1 million from 46.5 million at the end of Q3.  

SVOD platform Hulu had 49.7 million subscribers, up from 48.5 million subscribers in the fourth quarter. Hulu’s SVOD-only subscribers rose to 45.1 million from 43.9 million. Hulu Plus Live TV had 4.6 million subscribers, unchanged from last quarter. 

At Disney’s linear networks, operating income fell 7%to $1.2 billion. Revenues dropped 12% to $2.8 billion.

Operating income for domestic networks was down 5% to $838 million, with revenue of $2.2 billion, down 14%.

The company said advertising revenue were down because of fewer impressions at ABC and less political advertising at its local stations. 

Affiliate revenue was down 5% because of a 10% decrease in subscribers, offset by a 5% increase in rates. Some of that subscriber loss was the result of Disney’s new carriage deal with Charter, which is no longer carrying some networks.

Costs were down because there was less scripted programming on the networks because of the writers and actors strike. That programming was replace by lower cost non-scripted programming and sports programming, whose costs are accounted for in the company’s sports segment.

The sports segment had an operating loss of $103 million, compared to a $164 million loss a year ago. Star in India was responsible for $315 million in losses.

ESPN had operating income of $199 million, compared to a loss of $38 million a year ago. Revenues were up 1% to $4.4 billion.

Domestically, ESPN had operating income of $255 million, compared to a $41 million loss a year ago. Domestic revenue was up 1% to $4.1 billion.

In the quarter ESPN’s advertising revenue were down 2% because of lower rates and fewer impressions, reflecting the timing of College Football Playoff games. For the second quarter ESPN cash ad sale are pacing up by double digita in a strong sports marketplace, Johnston said.

 Affiliate revenue was flat.

ESPN Plus subscribers fell 3% to 25.2 million. Average monthly revenue per subscriber rose 14% to $6.09.

Experiences (including theme parks) operating income rose 8% to $3.1 billion as revenue rose 7% to $9.1 billion.

 “Just one year ago, we outlined an ambitious plan to return The Walt Disney Company to a period of sustained growth and shareholder value creation,” Iger said in a statement.

“Our strong performance this past quarter demonstrates we have turned the corner and entered a new era for our company, focused on fortifying ESPN for the future, building streaming into a profitable growth business, reinvigorating our film studios and turbocharging growth in our parks and experiences,” Iger said.

“As we build for the future, the steps we are taking today lend themselves to solidifying Disney’s place as the preeminent creator of global content,” he said. ”Looking at the renewed strength of all of our businesses this quarter–from sports to entertainment to experiences–we believe the stage is now set for significant growth and success, including ample opportunity to increase shareholder returns as our earnings and free cash flow continue to grow.”

Activist investor Nelson Peltz has made good on his latest proxy-war threat against Disney. 

On Thursday, the 81-year-old former frozen-food company magnate, who controls around $3 billion worth of Disney shares through his Trian Fund Management, along with his alliance with ousted Marvel Entertainment chair Ike Perlmutter, asked Disney shareholders for his nomination to the company's board of directors. 

Peltz also asked for the nomination of former Disney CFO Jay Rasulo.

In a proxy filing headlined "Restore the Magic," Trian seeks to "align management pay with performance," specifically noting CEO Bob Iger's $31.6 million annual compensation package. 

Trian also promises to help Disney "finally complete a successful CEO succession" ... again noting Iger. Additionally, Peltz' firm asked Disney shareholders to reject three nomination bids made by another activist firm, Blackwell.

Peltz made a similar nomination request a year ago, but he dropped it after newly reinstalled CEO Iger announced his intentions to dismantle displaced chief executive Bob Chapek's reorganization plan, as well as conduct layoffs and streamline operations. 

With Disney stock down over 17% since that time, Peltz told CNBC's Squawk Box Thursday he was intent on making another "run" at the company. 

"I made a run at them last year," he said. "They promised they were going to improve things. I took them at their word. Things got worse. The stock went down."

Asked why he's targeting Disney amid streaming disruption to the broader media-entertainment sector, Peltz noted the company's 6% margins vs. 20% margins for competitors Netflix and Warner Bros. Discovery. 

"Bob [Iger] said in ’15 and ’16 that streaming was a big issue. It was coming. Then what happened? They did nothing," Peltz told Squawk Box. "And look what happened to ESPN, the crown jewel of Disney, it continued to lose subscribers, lose value, and now they’re negotiating deals for ESPN out of total weakness. They could have made deals for ESPN back in ’15, ’16, ’17,, ’18, when they saw this streaming thing coming. They said it directly."

Roku has acquired the exclusive U.S. rights to TV adaptation The Spiderwick Chronicles after Disney Plus dropped the series.

Based on the bestselling book series by Tony DiTerlizzi and Holly Black, the eight-episode TV series, produced by Paramount Television Studios and Disney’s 20th Television, will premiere on the Roku Channel in early 2024.

The adaptation was originally developed and produced for Disney Plus before the subscription streaming service scrapped it in August. The series was then shopped to other buyers earlier this summer before Roku secured the rights.

The Spiderwick Chronicles official description calls it a “coming-of-age story of the Grace Family, as they move from New York to Michigan and into their family’s ancestral home. Upon arrival, the family not only uncovers mysteries hidden inside their great-grandfather’s Spiderwick Estate, but also discovers a secret, fantastical world around them.”

“It is an honor to bring The Spiderwick Chronicles, a spectacular adventure-filled story led by the incredible Christian Slater and Joy Bryant, exclusively to the Roku Channel,” said Brian Tannenbaum, head of originals, Roku Media, in a statement. “We cannot wait to introduce this exquisitely crafted series, imagined by a world-class creative team, to millions of streamers.”

The Spiderwick Chronicles is executive produced by Aron Eli Coleite, who also serves as showrunner alongside Kat Coiro.

The most aggressive broadcaster in regards to M&A, Nexstar Media Group, has stuck its name in the hat for the eight ABC owned-and-operated stations, should The Walt Disney Co. make good on hints made over the summer and put them up for sale. 

Tom Carter, a longtime Nexstar executive now serving as a senior adviser to CEO Perry Sook, said Wednesday that the stations could be purchased by Nexstar with “little friction.” He said this while speaking in New York at the BofA Securities Media, Communications and Entertainment Conference, an event covered by the Penske showbiz trades. 

“We think there could be some opportunities depending on how things fall out,” Carter said. 

Disney CEO Bob Iger spurred the interests of not only Nexstar, but also myriad private equity concerns over the summer when he said the stations "may not be core" to Disney's future. 

Irving, Texas-based Nexstar has swelled its holdings to more than 160 stations by making at least 40 acquisitions over the last decade, including Tribune and Media General. 

Carter conceded that Nexstar has reached the regulatory limit on station acquisitions. 

"That would not preclude us from buying stations because ... ABC's portfolio of stations is modest. It's only 8, largely in the top 10 markets. We're in 8 of the top 10 markets already. So we could -- with a CW station, we could buy a second station in that market and not increase our household footprint. There may be a few stations that would require divestiture or either of a Nexstar station or an ABC station, but we could onboard those with relatively little friction.”

Meanwhile, asked about an impasse with DirecTV that has kept Nexstar stations off the pay TV operator's platforms since early July, Carter said not much talking was done over the summer, but that has changed recently.

“Progress has been made,” he said. “We’re not going to do a bad deal. But our expectation is that we’re going to reach an agreement at some point, hopefully sooner rather than later, because everyone agrees that it’s not in anyone’s best interest to alienate the consumer.”

Charter Spectrum customers have taken to social media to express their irritation after a distribution dispute with The Walt Disney Co. caused them to lose access to ESPN, ABC and other Disney channels right at the moment of college football's kickoff last Thursday.

For starters, we'll submit this tweet from former Glen Falls Post-Star sportswriter Greg Brownell that had nearly 10,000 views as of this posting:

In fact, in just the last hour of writing this story more than 100 tweets with the keywords “ESPN Spectrum” were written, nearly all which expressing frustration at the cable company.

Of course, there's the usual bombardment of memes in place of literate articulation:

Meanwhile, Reddit communities with over 500,000 members like R/cordcutters have lit up with similar threads.

How Ready Is Charter To Let Disney and ESPN Walk? It Plans To Funnel Blacked-Out ‘Monday Night Football’ Fans to Fubo and YouTube TV from r/cordcutters

TikTok profiles including one representing far right outfit OutKick Sports have posted videos about the situation to the tune of 22.7 thousand likes.

Comments on that video tended to disperse blame across both parties: “ESPN isn’t worth it,” read one; “I just dumped Spectrum,” wrote another commenter, and “only time I watch ESPN is if I have no choice,” added another.

One Redditor is so frustrated with the situation they suggested that fans “embrace your inner pirate,” when asked what service to use to watch the pulled game.

The Charter-Disney kerfuffle is even showing up in seemingly unlikely places on the social internet, such as Nextdoor. 

Before he got distracted by his current fight for survival in the retail wireless business, Dish Network chairman Charlie Ergen spent a lot of time chest-thumping in the pay TV carriage wars, telling the programming community that when he blacked out a channel he was prepared to walk away for good.

And in recent years, Dish made good on some of Ergen’s threats, notably tossing regional sports network Bally Sports to the curb in 2019. If you’ve observed the recent wide-ranging collateral damage caused by the subsequent bankruptcy of the Sinclair Broadcast Group subsidiary that manages Bally Sports, then you understand how fateful and impactful Ergen’s decision was. 

Also Read: ESPN, ABC and 24 Other Disney Channels Blacked Out for Charter's 14.7 Million Spectrum Pay TV Customers

Major League Baseball, the National Basketball Association and the National Hockey League are all currently scrambling to figure out ways to make money from local TV sports amid Bally Sports’s floundering.

So how broad-reaching will the impact be if Charter Communications, which has around twice as many pay TV subscribers as Dish (14.7 million vs. 6.9 million), decides not to try to bring back the biggest sports channel of them all, ESPN?

Well … double it. And add 30. 

There is no precedent for what Charter now seems prepared to do. But in the early hours of Friday morning, less than 12 hours after it took down ESPN, ABC and the rest of the Disney cable TV universe in a carriage dispute, Charter held a conference call, during which it made it clear that this isn’t blackout business as usual. 

“Charter seems genuinely willing to walk away from Disney, and even the entire linear video model, if necessary,” MoffettNathanson principal and senior analyst Craig Moffett wrote shortly after the cable company’s virtual meeting.  

Observed Moffett: “They even titled their ‘impromptu’ conference call this morning: The Future of Multichannel Video: Moving Forward, Or Moving On.“

Sure, Charter’s morning presentation included typical rhetorical phrases like “drawing a line in the sand” against skyrocketing program licensing costs. 

But consider Charter’s actions. Beyond the immediate disruption to college football broadcasts — a big Utah-Florida game on ESPN was the first contest to get blacked out — the first NFL action on ESPN to be impacted by the Charter blackout will be the highly anticipated season-opening Monday Night Football contest between the Buffalo Bills and New York Jets on September 11.

Besides being Aaron Rodgers’s first game as a Jet, this is a matchup that features two Charter franchise markets. 

What’s truly interesting: According to Moffett, Charter is setting up a QR code that takes its pay TV customers directly to signup pages for virtual pay TV services Fubo and YouTube TV, which do carry ESPN. 

(Not surprisingly, Disney is trying to drive pay TV refugees to Hulu + Live TV, which it controls.)

Charter’s single-click destination will also help Spectrum video customers who choose these vMVPD options to downgrade their Charter service. 

“Forcing customers to pay for Disney content they opted out of, or don’t view and pay even higher rates, would negatively impact our connectivity relationships,” Charter said in its Friday morning presentation. 

Indeed, Charter no longer sees video as a means of profitability but rather a tool to drive its core internet connectivity business. And at this point, it seems less concerned about preserving its remaining pay TV bathwater than the “baby” of mobile and wireline broadband connectivity. 

As for Disney, which is openly planning its migration of ESPN to direct-to-consumer streaming, it faces a pricey multibillion-dollar renewal negotiation with the National Basketball Association with the possibility that its affiliate budget could suddenly come in about $2.2 billion lighter. 

“Programmers are caught in a self-imposed dilemma as they have moved content to their DTC products for short-term profit maximization and their management teams are not incentivized to drive business for the long term,” Charter’s presentation added.

Moffett has already put a name on the virtuous cycles degrading the pay TV business: “doom loops.” 

For its part, Charter seems to understand the “doom loop” sequence quite well, and it's more concerned about it leaking into connectivity, which is itself challenged by disruptive technologies liked T-Mobile's fixed wireless service. 

Here at Next TV headquarters in mid-city Los Angeles, this weekend exchange on Nextdoor validates Charter's concern. 

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.

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. 

Ryan Murphy bolted Fox for Netflix in 2018, one of several mega-producers, Shonda Rhimes along with him, who signed eye-popping $300 million-plus deals with the subscription streaming giant at the time. 

Now, it looks like Murphy is returning to the former Fox studio. According to numerous published reports (we'll cite Bloomberg), Murphy has no plans to re-up his expiring five-year deal with Netflix and is instead negotiating with The Walt Disney Co., now corporate home to the 21st Century Studios and FX brands, upon which Murphy first built his own powerful brand with hits like Glee and American Horror Story. 

Also Read: We’re Not Just Imagining It, Netflix Viewing Really Is Down From Last Year

At Disney, Ryan would be reunited with Disney Entertainment co-chair Dana Walden, who headed 20th Century Fox Television when the producer was on the lot. 

Disney acquired Fox's entertainment studios and other assets, including the FX cable brand, in 2019. 

Murphy is coming off a prolific year for Netflix, hoisting back to back hits last fall — Dahmer-Portrait of a Serial Killer and The Watcher. Both limited series wound up on Netflix's ranking of all-time best 28-day openings for English language TV shows. Netflix is in the process of expanding Dahmer into a full franchise of limited series based on serial killers.  

As The Walt Disney Co. studies when to create a standalone, direct-to-consumer version of ESPN, MoffettNathanson senior research analyst Michael Nathanson is calling time out.

Nathanson said he thinks Disney would be better off keeping ESPN in the Disney bundle with Disney Plus and Hulu.

The combination “will deliver enough premium content to reduce churn, aggregate engagement and substantial non-programming cost savings,” Nathanson said. 

“We believe that a sports-only streaming app is a tough model and that sports integrated in a general entertainment service a la Peacock or Paramount Plus makes more sense,” he said. “Given the current light penalties for cheating the MVPD system, we would argue that Disney could create more stickiness and audience flow integrating ESPN into Hulu and Disney Plus than trying to build a standalone premium service.” 

Nathanson notes that the current Disney bundle of Hulu, Disney Plus and ESPN Plus has a churn rate lower than Netflix and three times lower than the rest of the streaming industry.

Nathanson also noted that the bulk of Disney’s current 25 million ESPN Plus subscribers are already bundled customers. (The bundle has 20 million three-service subscribers.)

The Walt Disney Co. said in an SEC filing last week that it will incur a $1.5 billion impairment charge in its ongoing fiscal third quarter following the removal of shows and movies from Disney Plus and Hulu.

Looking to reduce taxes and other charges, Disney pulled more than 50 titles from Disney Plus and Hulu, including recent series The World According to Jeff Goldblum, Y: The Last Man, The Mysterious Benedict Society, Dollface, The Mighty Ducks, Turner & Hooch, Willow, Maggie, Dollface and Cheaper by the Dozen.

Disney also said in its filing that it expects to write down another $400 million as more content gets removed. 

It wasn't a surprise. During Disney’s fiscal Q2 earnings call last month, chief financial officer Christine McCarthy told investors an impairment charge of between $1.5 billion-$1.8 billion was coming. 

Disney trimmed EBITDA losses on streaming to $659 during its fiscal second quarter vs. $1.1 billion the previous quarter. 

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.’s plan to eliminate 7,000 staffers is hitting ESPN this week.

Returning chairman and CEO Bob Iger announced the layoffs as part of a cost-cutting effort designed to boost profits and satisfy activist investors. 

The first of three scheduled waves of layoffs took place in March. This second wave was expected to be the largest. A third wave is planned to end by the start of the summer and will also include ESPN staffers who are not in talent roles.

ESPN will be making decisions about retaining talent after the third wave of layoffs is completed.

“We must further identify ways to be efficient and nimble. We will continue to focus our workforce on initiatives that are most closely aligned with our critical priorities and emphasize decision-making and responsibility deeper into the organization,” ESPN chairman Jimmy PItaro said in a memo to staff Monday.

“To those that will be leaving ESPN, I want to thank you for your many contributions and reinforce that the company is here to support you during this challenging transition. Please reach out to your HR Partner if you have any questions,” Pitaro said. “While these decisions were made with considerable thought, I also want to recognize that we understand that this has been a long — but thorough — process with a lot of uncertainty. This type of action impacts everyone. Thank you for your continued patience.”

Layoffs are also taking place at other Disney divisions this week.

It's Comcast's Universal Pictures unit and not Disney that wears the "animation crown" these days.

Universal's Super Mario Bros. Movie opened to $204.6 million domestically over its first five days of release, making it this year's biggest North American theatrical premiere so far. Adding in the $173 million the movie has made internationally, the film -- a collaboration between Universal's Illumination unit and video game maker Nintendo -- now has a global box office revenue total exceeding $377 million. 

The boffo theatrical opening is interesting for several reasons, and not just because it reveals a bit of post-pandemic revitalization for the domestic theatrical exhibition business.

For one, it shows that Comcast/NBCUniversal can cut windows from theatrical premiere to streaming debut on Peacock down to just seven weeks, as it did recently with Knock at the Cabin, and still open its movies big. 

But maybe even more notable is the fact that, according to LightShed Research Partners analyst Richard Greenfield, Universal now "wears the animation crown," which no longer belongs to Disney. 

Universal and Illumination, which the studio co-owns along with Super Mario Bros. Movie producer Chris Meledandri, are coming off last summer's blockbuster success of Minions: The Rise of Gru, which generated nearly $940 million at the global box office.

Disney-Pixar's last hit came in 2019 with Toy Story 4.

Greenfield re-tweeted his January appearance on CNN's Squawkbox, during which he wondered if Disney was too distracted trying to compete on the broad-reaching programming level of Netflix to remain relevant in the more specialize area of family animation. 

"If you think about what Universal Studios has done in animation over the last couple of years, relative to Disney, Disney's been crushed animation-wise, and that's just a big problem."

Isaac "Ike" Perlmutter, the hard-charging chairman of Disney-owned consumer products unit Marvel Entertainment, has been let go amid the conglomerate's broad-reaching layoffs, and his division has been subsumed into Disney's larger consumer products business. 

Marvel Entertainment is -- or was -- a separate, much smaller division relative to Marvel Studios, focused on businesses like tsotski product licensing. Amid the cuts, Marvel Entertainment’s co-president, Rob Steffens, and chief counsel, John Turitzin, were also let go.

Division President Dan Buckley will remain at Disney and report to Marvel Studios head Kevin Feige.  

The New York Times was the first to report on Disney's latest cuts, with myriad other publications stepping in and confirming Wednesday morning's news. 

The 80-year-old Perlmutter, described as "an irascible and unrelenting executive" by NYT's Brooks Barnes, was fresh off a failed boardroom coup attempt, and his departure hasn't come to a surprise to many at Disney's Burbank, Calif. headquarters, Barnes said. 

Last summer, Perlmutter began a push to put activist investor Nelson Peltz on the Disney board. Once rebuffed, Perlmutter tried to put himself on the board, promising to contain Disney's spiraling costs, right-size its streaming expenses and sort out the company's succession planning. 

Peltz withdrew his bid to joint the board in February. And this week, newly installed CEO Bob Iger revealed his own cost-cutting plan ... one that didn't involve Perlmutter, who joined the studio in 2009 amid its $4 billion purchase of his company. 

On Monday, Iger announced a bloodletting of 7,000 Disney jobs, part of a promised $5.5 billion in cost cuts, which is now officially in progress.

These trims have already included Disney's "Next Generation Storytelling and Consumer Expriences" division, the "metaverse" unit started just last year by former CEO Bob Chapek. 

As part of its initial effort to eliminate around 7,000 jobs and reduce cost by $5.5 billion, The Walt Disney Co. has eliminated the division charged with developing business around the nascent “metaverse.” 

About 50 workers from the so-called “Next Generation Storytelling and Consumer Experiences” division were let go. Mike White, the former Yahoo executive who led the venture, will be retained and deployed in another capacity. 

The move was first reported by the Wall Street Journal and subsequently confirmed by numerous other outlets. Disney's current CEO, Bob Iger, sent a note to staff Monday outlining the broader scope of the upcoming layoffs. 

The next-gen storytelling division was built and championed last year by former Disney CEO Bob Chapek. And its demise marks the second major dismantling of a recent Chapek creation by Iger, who replaced Chapek in November amid his abrupt ouster. 

Iger's first move in returning to Disney’s CEO office was to axe the Disney Media and Entertainment Distribution division, led by Chapek lieutenant Kareem Daniel. 

Outlining Disney’s “strategic pillars” in a lengthy staff memo sent 14 months ago, Chapek highlighted what he saw were opportunities in the metaverse for Disney as it reached its 100th birthday. 

“Since Steamboat Willie, we have been the world’s foremost innovative storytellers,” Chapek wrote. “That must continue as technology evolves, giving our creative teams new canvases like the metaverse on which to paint.”

It’s unclear as to what Disney’s nascent metaverse group was working on. Certainly, Disney isn't the only large TMT company to explore metaverse opportunities. Facebook, for example, which recently restructured in a way such that its parent company is now called Meta Platforms, is notably all in on this brave, new world of storytelling few of us understand. 

To date, however, no one has yet proven that there can be a wildly profitable business built on the metaverse in the near term. ■

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. ■

The ABC Owned Television Stations salute their parent company when the 30-minute special Disney100: The Exhibition–Making the Magic debuts March 23 on WPVI Philadelphia and across the station group on linear, digital and streaming platforms. Hosted by Alicia Vitarelli and TaRhonda Thomas of WPVI Philadelphia, the special will also be available on Localish and Hulu. 

Disney was founded in 1923. Disney100: The Exhibition debuted at The Franklin Institute in Philadelphia on February 18, featuring more than 250 artifacts and works of art, costumes, props and memorabilia. The exhibit runs through August before it travels to other destinations across the United States. A second unit of the exhibition opens in Munich in April.

The artifacts include Disneyland Employee Badge No. 1, issued in 1955; costumes from Black Panther and Enchanted; and the lightsaber hilt Daisy Ridley used in Star Wars: The Rise of Skywalker. 

In the TV special, viewers pay a visit to the Walt Disney Archives in Burbank to see how the 15,000-square-foot exhibition was produced and will have an insider’s look into how Disney has created some of its most popular characters, films, shows and attractions. The special will also document how the Walt Disney Archives crafted the 10 themed galleries at The Franklin Institute. 

“Disney100: The Exhibition — Making the Magic will reveal how the philosophies of visionary filmmaker and innovator Walt Disney laid the foundation for The Walt Disney Company,” the ABC Owned Stations said. “From the contract that established the company and the creation of Mickey Mouse to immersive theme parks and blockbuster films such as Frozen and Pirates of the Caribbean: The Curse of the Black Pearl, viewers will experience incredible moments from Disney’s rich legacy.” 

ABC’s owned stations include WABC New York, KABC Los Angeles, WLS Chicago and KTRK Houston. ■

According to Wells Fargo's Steven Cahall, Disney selling Hulu is no longer just an alternative counter-theory, existing on the outer fringes of the broader, rampant forward-looking speculation regarding Hulu's fate. It's evolved into a mainstream thesis. 

"Ask 10 investors if they think Disney will sell Hulu, and we think ~7 will answer, 'yes,'" Cahall wrote in a Wednesday morning investor note. 

Certainly, count Cahall among the other ~3. 

"We think investor expectations for Disney selling Hulu have run too far too fast," he said. 

Also read: Hulu at 15: Founding CEO Jason Kilar Recounts the Early Days of the JV Formerly Known as ‘Clown Co.’

Closing 2022 with 48 million subscribers, $10.7 billion in revenue and profitable EBITDA margins, Cahall concedes that Hulu is "an attractive streaming platform for any buyer looking for scale." 

But so much of what Hulu is roots deeply into Disney, he argues. 

"Let's not forget that most of the content comes from Disney: FX, ABC, 20th Century, Searchlight, etc.," Cahall notes. "Buying Hulu from Disney would likely require a content deal for an interim period (or buying those content engines). Those engines also provide content to Disney Plus internationally via the Star tile, so it's tricky.

Then there's the issue of who would buy Disney's controlling stake in Hulu.

Minority owner Comcast is thought by most investors to be the most likely buyer. But Cahall thinks it's more likely that the Philadelphia cable conglomerate exercises a deal clause with Disney that allows it to sell its 30% share in Hulu for around $9 billion. 

Also read: Disney Might Trade Hulu to Comcast for Hulk, Citi Analyst Says

Then there's the issue of the Disney Bundle -- Cahall thinks Hulu is a pretty good fit, supplying "general entertainment" nutrition to a diet that gets franchises from Disney Plus and sports from ESPN Plus. 

"Exiting domestic streaming general entertainment would mean ceding the market to Netflix, HBO, Apple, Amazon, Comcast, Paramount, etc.," Cahall writes. "If ESPN Plus becomes a bundler of broader sports then ESPN Plus/Hulu becomes an entertainment powerhouse to rival the lucrative pay TV bundle, while Disney Plus could likely stand alone as a global play on DIS's franchise IP."

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

In conclusion, he adds, that selling Hulu is an option, "but unless Disney can get a nice price, it would seem to remove future optionality. Improving company EBITDA via cost reduction and DTC revenue growth is a better way to remove current leverage risks in our view, vs. sale of a successful domestic streaming service. We think investors counting on a Hulu divestiture could be disappointed."

Despite a blackout of Sinclair Broadcast Group- owned ABC affiliates, Hulu Plus Live TV subscribers in Sinclair markets were able to stream Sunday night’s Oscars telecast.

A national feed of the Jimmy Kimmel-hosted coverage of the Academy Awards on ABC, owned by The Walt Disney Co., was made available by the Disney-controlled virtual multichannel video programming distributor (vMVPD), sources confirmed.

The feed was available only during the awards show, one of the most-viewed non-sports telecasts in most years. After the telecast, ABC again went dark in markets where Sinclair owns the ABC affiliates.

Also: Disney Sells Out Oscar Commercials At Prices Between $1.6-$2.1 Million

The feed could breach Sinclair’s affiliation agreement with ABC, although vMVPDs are treated differently from a legal and regulatory point of view than traditional cable and satellite MVPDs.

In its talks with Hulu, Sinclair is seeking carriage of its Tennis Channel, sources said.

Neither ABC nor Sinclair executives would comment on the record.

Negotiations with vMVPDs turned awkward this year, first with CBS affiliates opting out of a deal crafted by CBS owner Paramount Global and FuboTV, and then with Sinclair pulling its signals from Hulu. 

The CBS situation escalated when the network provided Fubo TV with a national feed of CBS programming, with local news and other station programming replaced by material from CBS.

Until Sunday night, ABC had not made network programming available to Hulu Plus Live TV subscribers. ABC shows can be found on Hulu the day after it airs on the network.

Late last week, the CBS Affiliate Board said it endorsed a new offer from Paramount and CBS that puts affiliates’ signals on FuboTV, Hulu Plus Live TV, YouTube TV and Paramount Plus.

“If a crisis between national nets and local stations was emerging, it now appears averted,” Wells Fargo media analyst Steven Cahall noted. “The CBS affiliate board has adopted a new deal for vMVPD carriage. Nexstar has also announced a carriage deal with YouTube TV showing larger broadcasters can go direct. Both deals indicate vMVPDs are not indifferent to local content.”

Cahall noted that Sinclair’s ABC affiliates “remain off of Hulu Live TV, and it looks like ABC offered its national feed to these subs last night during the Oscars.”  ■

The Walt Disney Co. said it named Sonia Coleman as senior executive VP and chief human resources officer, effective April 8.

Coleman had been senior VP, human resources, for Disney Entertainment and ESPN. She succeeds Paul Richardson. Disney said Richardson is leaving the company after more than 15 years.

In her new post, Coleman will report to CEO Bob Iger and be responsible for global talent acquisition, leadership development, diversity and inclusion, cultural development, employee education, compensation and benefits.

Also: Wonder Women of New York 2023: Sonia Coleman

“Sonia is widely respected across the company as a gifted leader and strong advocate for our employees,” Iger said. “Her proven expertise leading the human resources function for our general entertainment businesses and ESPN during a period of unprecedented transformation makes her the perfect choice to lead this function company-wide as we implement our new operating structure and position Disney to capitalize on the opportunities ahead. I also want to extend my thanks to Paul Richardson for his many years of service to the company and his contributions to numerous ongoing initiatives, including our Heroes Work Here veterans hiring program.” 

Coleman joined Disney in 2008 as VP, human resources, for the company's consumer product unit. Before that she worked at The Children’s Place and the Home Depot. She was recently named a Multichannel News Wonder Woman of New York for 2023. 

“It is truly an honor to be named to this role, and I am grateful for the confidence that Bob has placed in me,” Coleman said. “Disney is unrivaled because of the talent, dedication, and enthusiasm of our cast members and employees. They are the key to our success, and I look forward to being their greatest champion, in partnership with our exceptional HR teams around the world, as we move forward through the important company-wide transformation underway that will truly empower the people behind the magic of Disney.” ■

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. ■

Not only does Citi analyst Jason Bazinet believe Disney will sell its stake in Hulu to Comcast, and not the other way around, he also speculates that Disney might use the negotiation to claim the distribution rights to two Marvel characters controlled by Comcast's NBCUniversal division, Hulk and Namor. 

“Following [Disney's] fiscal 1Q23 results, we believe the company is less interested in a mass market DTC offering. This raises the possibility that Disney may sell its Hulu stake,” Bazinet wrote in a note to investors Thursday morning. 

Also read: What's Going to Happen to Hulu, a Major SVOD with 48 Million Customers? Who Knows?

Selling its 67% stake in Hulu would provide a great opportunity for Disney to consolidate the ol' MCU.

“While Disney owns all Marvel IP, Universal has distribution rights to Hulk and Namor,” the analyst added. “As such, if Disney makes a Hulk or Namor film, Comcast can distribute the film on Peacock. If Hulu is sold, Disney may use this as an opportunity to secure these distribution rights.”

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

Disney consolidated Fox and Warner's ownership in the Hulu joint venture in 2019. And as part of that negotiation process, Comcast -- relegating to a non-controlling shareholder with a 33% ownership stake -- gained the right, starting in 2024, to demand that Disney buy it out at a minimum Hulu valuation of $27.5 billion. 

That would mean that Disney, which is trying to reduce the more than $4 billion in direct-to-consumer losses it experienced in 2022, would have to come up with at least $9 billion and change. 

For his part, Bazinet places Hulu's valuation at between $19.8 billion and $27.5 billion. 

Hulu added 800,000 paid users from October through December, ending 2022 with 48 million subscribers, nearly double what it had at the time Comcast forged its forced-sale agreement with Disney in 2019. 

Meanwhile, Hulu revenue reached $10.7 billion last year -- again, more than double what was four years ago. 

Newly re-installed Disney CEO Bob Iger, when asked what his company might do with Hulu during Disney's fiscal Q1 call in early February remarked, "Everything's on the table right now. I'm not going to say we're a buyer or a seller.”

And for his part, Iger's Comcast counterpart, chief executive Brian Roberts, said in September that Comcast would be interested in buying Hulu. 

 The Walt Disney Co., which last week announced big cost cuts and plans to eliminate 7,000 jobs, ran a 90-second spot in Super Bowl LVII, broadcast by Fox.

Fox said most of its 30-second Super Bowl commercials sold for between $6 million and $7 million so a 90-second spot would be worth about $18 million. A source indicated that Disney had ad credits with Fox and decided to use them on the ad in the big game.

Between streaming services and theatrical films — not to mention promos for Fox projects, the entertainment industry is expected to be well-represented during the big game.

Disney’s Super Bowl commercial is designed to market its 100th anniversary, which falls on October 16, 2023. Disney says that throughout the year it will be celebrating its fans and storytellers.

Also: Top Disney Creative Business Execs Spell Out New Responsibilities

The spot shows Disney intellectual property running from Mickey Mouse to Frozen to Star Wars and Marvel.

“As we commemorate our historic 100th anniversary, it is remarkable to look back at Walt Disney’s legacy and his passionate pursuit of excellence that continue to propel the Company forward today. We are incredibly grateful to the generations of people all over the world for being such a special part of our history and for inviting our stories and characters into their lives over the past century,” Disney CEO Bob Iger said. “Disney100 represents a celebration of all of our fans and families, and our storytellers and creative visionaries whose talents and imaginations have created the magical moments that make Disney such an enduring part of the global culture.”

Disney Parks have begun delighting guests with special Disney100 celebrations.

The company is also providing fans with exclusive events, sneak previews, and, in September there will be Disney100-themed “Destination D23” for members of D23, The Official Disney Fan Club. ■

"Let the speculation begin," trumpeted analyst Michael Nathanson in a late-week note in which he suggested that Disney avoid a buyout payment of more than $9 billion to Comcast by having Hulu revert to its original joint-venture status.

"Begin"? Baby, we've been speculating on this transaction for nearly two years now. 

Eighteen months ago, as part of a negotiation to renew Disney networks on Comcast cable TV service, the two companies set about negotiating what appeared to be the straightforward sale of Comcast's remaining 30% stake of Hulu to Disney.

That followed reports from the summer of 2021 that Comcast had stopped funding Hulu as it engaged in arbitration with Disney over the streaming service. 

As most of us are aware by now, starting in 2024, Comcast can demand that Disney buy out the remaining 30% of Hulu it doesn't own at a market value of no less than $27 billion. 

Now, with the January 2024 trigger date for such a sale much closer, we seem to know less about what's going to happen to Hulu than ever. 

During Disney's fiscal Q1 earnings call last week, newly reinstalled CEO Bob Iger was hardly committal, indicating that Disney might even sell Hulu. 

Comcast CEO Brian Roberts, meanwhile, indicated a surprising willingness earlier last year to maybe even buy Hulu back from Disney. But Comcast didn't make any definitive statements about such a move during its Q4 call, either, and seems to have even "walked back" from this position, Nathanson said.

The analyst said such a move would be foolish in that it would strip Hulu from the Disney/FX content pipeline that underpins the service. 

Without that content source, Hulu would be a relatively worthless brand, he contends. 

That we don't get. 

Transitioning from a joint venture between Disney, NBCUniversal Fox and Warner Bros. to a stepchild platform controlled and primarily programmed by Disney, Hulu has been stripped of content pipelines before. 

And it keeps on growing. 

Hulu added 800,000 customers in the final quarter of 2022 and now has 48 million subscribers. Its 2.7 million customer additions far outpaced Netflix, which lost subscribers in the U.S. and Canada last year. 

This has come even as Disney has limited Hulu's international expansion, seemingly to ensure that that market valuation of the service doesn't surpass $27 billion next year. 

Hulu's growth also came as the leader of the Disney Bundle, Disney Plus, grew only by 200,000 paid users from October through December. 

An enduring subscription streaming brand tied to nearly 50 million subscribers is potentially available for acquisition ... at a time when the vast allocation for building such scale from scratch is decidely frowned upon by the finance community?

Yeah, let the speculation begin. 

The leaders of The Walt Disney Co.’s television and movie business today began spelling out how the new organization created by CEO Bob Iger will work.

On Disney’s earnings call Wednesday, Iger created three core groups, one for Entertainment headed by Alan Bergman and Dana Walden; ESPN, headed by Jimmy Pitaro; and Parks, headed by Josh D’Amaro.

In a memo to staff from Bergman, Walden and Pitaro, Disney Entertainment will be responsible for the company’s full portfolio of entertainment media and content businesses globally, including streaming businesses Disney Plus and Hulu.

Walden will have primary oversight over ABC Entertainment, ABC News, ABC Owned Television Stations, Disney Branded Television, Disney Television Studios, Freeform, FX, Hulu Originals, National Geographic Content and Onyx Collective. 

As part of this reorganization, Debra OConnell will report to Walden as president, networks — excluding ESPN. Shannon Ryan will continue to oversee marketing for Walden’s creative groups in addition to Hulu, working closely with the Disney Plus  marketing team, the memo said.

Bergman will also have primary oversight over Disney Live Action, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios, Lucasfilm, 20th Century Studios and Searchlight Pictures, as well as Disney Music Group and Disney Theatrical Group. Asad Ayaz will continue to oversee marketing for Bergman’s creative groups in addition to Disney Plus, working closely with the Hulu marketing team.  

ESPN will include ESPN networks and ESPN Plus.

The leaders of each content group will have full operational control and financial responsibility for creative development, marketing, sales and distribution and will be accountable for driving business efficiencies, as Iger had announced. 

“Several shared-service organizations across the company will support both Disney Entertainment and ESPN, facilitating company-wide efficiencies and creating a more cost-effective, coordinated and streamlined approach to operations,” the memo said. . 

Those organizations include Product and Technology, led by Aaron LaBerge; Advertising Sales, led by Rita Ferro; and Platform Distribution, led by Justin Connolly, excluding Theatrical Distribution and Music, which will be overseen by Bergman. 

Also: Wall Street Welcomes Bob Iger’s Plan To Slash Costs at Disney

“This reorganization of our company will result in reductions to our overall workforce, which will affect every segment and function across the company, and we are very mindful of the personal impact of these changes,” the memo said. “More permanent decisions about individual positions and teams will be made in the coming weeks as we build out our operations in alignment with the company’s overall strategic priorities. Understandably, these changes will take a toll on colleagues who will be impacted, and we do not take that lightly. We will continue to be as transparent as possible throughout this process.  

“In the meantime, we encourage everyone to speak with your individual leaders, who will soon have additional information about assignments, reporting structures, and more,” the memo said. 

Outside of North America, the company’s media, entertainment and sports content and operations will continue to be managed regionally by Luke Kang, president, Asia-Pacific; Jan Koeppen, president, EMEA (Europe, Middle East and Asia); Diego Lerner, president, LATAM (Latin America); and K Madhavan, president, India, the memo said. Those executives will report to each of us as part of their global responsibilities.

As a result of the changes, Rebecca Campbell, chairman, International Content and Operations, has decided to leave the company,  the memo noted. ■

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. ■

Disney Advertising Sales regaled advertisers with tales of the data and technology prowess that, along with the company’s content, creates effective campaigns as the annual upfront market approaches.

“Making significant advancements in all things data, measurement and programmatic remains our highest priority,“ Rita Ferro, president of Disney Advertising Sales, said during the virtual presentation. "Why? Because they all drive performance for you and growth for us. This is our third tech and data showcase, and we continue to move full steam ahead toward an audience-focused, fully automated future driven by data and technology.”

Ferro said that Disney has spent years building an Audience Graph covering 235 million users and 110 households. 

“We’re aggregating insights across all screens and all content types. What’s the result? Even more opportunity and potential for you: Better targeting. Better segmentation. Greater accuracy. More precise measurement,” she said. [Disney provided a transcript of the session.]

Also: Disney Engages EDO to Measure Impact of Streaming Ad Campaigns

The audience graph gives advertisers three times higher match rates and access to all of Disney’s audience signals and increased addressable supply, Disney said in its spiel. Disney Plus, the SVOD streaming service, is seamlessly incorporated into the graph, the company said. 

Ferro noted that last year Disney launched an ad-supported version of Disney Plus. The initial offering was somewhat limited, but the company plans to make all of the ad innovations it offers on its other platforms — including Hulu — on Disney Plus.

Many of those features will be enabled by a new ad server for the entire company.

“We wanted one ad server for the entire company,” Aaron LaBerge, Disney’s chief technology officer, said. “We wanted advertisers to be able to buy an audience once and deliver anywhere across all our endpoints and access points. This gives us control over how we deliver ads, how we insert ads, formats of ads we use, how we integrate with programmatic networks, which really just gives us the complete flexibility to reimagine how we want to sell in the future.”

He said every streaming platform at The Walt Disney Company is going to be using this new ad server without exceptions.

LaBerge also showed off a new virtual reality engine that can be used to render real time in-game graphics that augment the content experience. He said the technology is being used to create both content and integrated advertising messages.

Disney has also been pushing its programmatic capabilities.

“The programmatic future is here! And our investments in DRAX [the Disney Real Time Ad Exchange] are paying off, and advertisers are tapping into its power,“ said Lily Panchasarp, Disney’s national sales director, programmatic. “Disney’s programmatic offering continues to rapidly scale. We’ve seen massive adoption rates and nearly a 150% rise in biddable [sales]. This is double the growth we saw last year.” 

By 2024, Disney will be delivering 50% of its revenue through automation, she said.

“Advertisers are becoming more effective by bidding against high-value audiences — eliminating waste — while delivering maximum value,” Panchasarp said. “The next phase is all about interoperability. We want to be everywhere imaginable in the market. Why? Because it improves discovery of our inventory, and it increases the scalability of our offering.“ ■

Disney Advertising said it plans to hold a big event to close out its upfront process at New York’s Javits Center on the Tuesday of upfront week, May 16. 

Last year, Disney held an upfront event downtown at Basketball City on PIer 36.

Disney says the event will show off its array of entertainment and sports programming. It also said ABC late-night star Jimmy Kimmel is expected to return to New York to roast network executives and media buyers. Kimmel gave his spiel virtually last year because he tested positive for COVID.

With the evolution in the TV industry and the changes in the advertising business, there have been some changes in the way media companies are handling the upfront.

Also: Goodbye Carnegie Hall: Another Sign the Broadcast Era Is Ending

Most notably, CBS parent Paramount Plus gave up its traditional spot at Carnegie Hall in favor of what it called smaller, more intimate dinners. Netflix swooped in and said it would stage an event during CBS’s Wednesday evening time slot at New York’s Paris Theater, which it manages.

NBCUniversal will be returning to Radio City Music Hall for its upfront on Monday, May 15. ■