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.

Former Walt Disney Co. streaming chief Kevin Mayer and former chief operating officer Thomas Staggs have teamed up with basketball legend Shaquille O’Neal on a special purpose acquisition company, set on raising $250 million to buy a company in the telecom, media and technology space. 

Forest Road Acquisition Corp. is led by CEO Keith Horn, a long-time financial executive and chief financial officer Salil Mehta, a former Disney EVP. Joining them are Staggs, who will serve as chairman of the SPAC’s strategic advisory committee, Mayer and O’Neal, who will serve as strategic advisers.

Mayer, who was in charge of Disney’s streaming efforts -- including Disney Plus -- left the company in May to become CEO of internet icon TikTok. He resigned from that position in August. Staggs left Disney in 2016 after serving as chief financial officer and chief operating officer of the entertainment giant.

Former Los Angeles Laker and NBA Hall of Famer O’Neal currently serves as an NBA commentator for cable network TNT and is a long-time investor. 

Related: SPACs: The New Final Frontier 

Forest Road is just the latest in what has been an impressive string of SPACs launched this year. According to SPACInsider, 138 SPACs were created in 2020, raising $53.8 billion. Recent SPAC deals include CuriosityStream, which merged with Software Acquisitions Group in August. SPACs led by former MGM chairman Harry Sloan and former CBS Entertainment president Jeff Sagansky have raised more than $3 billion and merged with companies like sports betting giant DraftKings. 

In its prospectus, Forest Road said its team is uniquely positioned to find opportunities in the TMT space.

Other advisers include civil rights activist and Bounce TV co-founder Martin Luther King III; TV and film producer Mark Burg (the Saw franchise and Two and a Half Men); and former entertainment executive and TV and film producer Peter Schlessel. 

“We believe that our team’s distinguished and long-term track record of sourcing, acquiring, and building next-generation media and entertainment platforms, along with other investments and operational experience in consumer-facing industries, will provide us with differentiated consumer insights and sourcing opportunities,” Forest Road said in its prospectus.   

Forest Road added that it sees opportunities in the media space as the industry continues to shaft toward streaming distribution. The rising number of streaming video service providers  and demand for premium content also presents opportunities.

“We believe that media and entertainment is undergoing rapid and aggressive technology-induced change, resulting in new monetization opportunities and secular growth as opportunities to reach consumers expand, new entrants seek to gain market share, and the “old guard” adapts to the evolving needs of today’s consumers,” Forest Road said. “We believe that our team’s experience in building and executing strategies that combine capabilities and expertise in consumer preferences and technology/product development will differentiate our ability to source a successful partner.”

While Forest Road will focus on entertainment targets, another SPAC launched Friday by Atlanta Falcons minority owner Alan Kestenbaum will hone in opportunities in the sports arena including teams and regional sports networks.

Kestenbaum has joined forces with two top sports investors to form Sports Ventures Acquisition Corp. (SVAC) and raise about $200 million.

Among the possible targets listed in the SVAC prospectus, filed with the Securities and Exchange Commission on Oct. 8, are U.S. sports teams, European soccer clubs, rugby, esports and cricket teams. The SPAC also listed regional sports networks, sports media rights and  as possible interests.

In the media and entertainment fields, SVAC will eye film and television production companies,  in the U.S. and private companies in the sports media and entertainment field, including television and film production and be headed by Kestenbaum as CEO. He holds a minority interest in the NFL Atlanta Falcons, and is currently CEO of StelCo Holdings, one of the largest steel companies in Canada. His partners include Inner Circle Sports founder Rob Tilliss and GlassBridge Enterprises CEO Daniel Strauss. 

The sports SPAC field also is getting increasingly crowded. Earlier this year former Goldman Sachs executive and YES Network investor Gerry Cardinale launched RedBall Acquisitions with Oakland A’s EVP of baseball operations Billy Beane, raising about $575 million.  RedBall is reportedly looking to buy an English Premier League team.   Earlier this month, Sports Entertainment Acquisition Corp., created by several former NFL executives, raised about $400 million and are seeking potential targets in the sports, entertainment and technology industries.  

Disney chairman and CEO Bob Iger said he hopes to retire when he had originally planned in 2018, but will stay on if it is determined to be in the best interests of the company.

Iger announced last year that he planned to retire at the end of 2018. But a lot has changed since then – its flagship ESPN network continues to bleed subscribers and Disney’s board lost confidence in his original pick to succeed him – former COO Tom Staggs. Staggs resigned in April 2106, which has thrown the process into disarray.

Yesterday a report in the Wall Street Journal said sources indicated that Iger would be open to extending his contract yet again (he had first planned to retire in 2015). On a conference call with analysts to discuss first quarter results, he did just that.

One the call Iger said his decision to retire in 2018 was a personal one, but noted that he is also personally invested in Disney, having been an employee for 43 years and CEO for almost 12.

“I’m going to do what is in the best interests of this company, which is something that the board is clearly going to help determine,” Iger said. “While I am confident that my sucessor is going to be chosen on a timely basis and chosen well, if it is in the best interest of the company to extend my term, I am open to that. There is nothing specific to announce.”

As the battle for control of Viacom continues to be waged in the courts, Telsey Advisory Group media analyst Tom Eagan said he was “cautiously optimistic” about the overall pay TV ad climate, adding that replacing Viacom executive chairman and CEO Philippe Dauman with 21st Century Fox vice chairman Chase Carey or DreamWorks SKG chief Jeffrey Katzenberg could help boost the stock.

Viacom stock was down about 40% in the 12 months prior to moves by its controlling shareholder Sumner Redstone to remove Dauman from the trust that will manage his shares in the event of his death or incapacitation. That battle still rages in Massachusetts Probate Court and elsewhere and has cast a pall on the overall company, but has been understandably good for the stock. Viacom shares have climbed during the cat fight, up a total of 7.2% since May 20. And all of that growth can be attributed to the growing possibility that Dauman, who has been under fire for poor decision making over the years, will be ousted from the C-suite. Dauman joked at the Gabelli Movie & Entertainment conference last week that it was better to create content than become it, but his fate appears to be the only thing concerning investors at the moment.

Carey, who became Fox vice chairman in 2015 and is largely in that role to help founder Rupert Murdoch’s sons James and Lachlan transition into eventually running the whole shooting match, has a stellar track record with troubled companies. He basically resurrected DirecTV when he was CEO at that satellite TV service provider in 2003 and stayed about six years, returning what had been a struggling operation to robust subscriber growth, before returning to then-Fox parent News Corp. in 2009. Carey helped News Corp. through the split that created two separate companies – Fox, the programming arm and News Corp. the publishing arm – unlocking value for both. While there is little doubt he could help Viacom – he has been running content businesses for most of his career – the question is whether he would want to take on the challenge. Viacom, which has struggled with declining ratings and sluggish ad growth, may be too far gone for the seasoned executive to even bother.

Katzenberg, who helped create Disney’s modern animation business and has had some successes with DreamWorks – like the Madagascar and How to Train Your Dragon series of films and TV shows – will step into an advisory role after the sale of the content creator to Comcast’s NBC Universal is completed later this year. Katzenberg, 65,  has the content chops, particularly in the kids’ business, but again it could be a question of whether he wants to take on the challenge.

There are other experienced executives in the pool – Eagan said former Disney COO Tom Staggs also would be cheered by Wall Street – so there is no shortage of possible replacements.

And like other analysts who have pointed to the structure of the trust and the board make-up, it doesn’t really matter if Redstone is declared incompetent or not.

“The Redstones have already won,” Eagan wrote.    

In the meantime, the traditional pay TV networks business, thought to be on its way out as over-the-top services and skinny bundles transform the industry, is expected to be surprisingly strong.

Eagan expects the strong scatter market will continue into the Upfront negotiations and third quarter spending. He believes that the move toward cross platform measurement in the first half of next year will help comparables, but expects CBS, Time Warner Inc., and Fox to generate mid-to-high single-digit ad revenue gains in fiscal 2016.

At Viacom the outlook is less rosy. Eagan predicts Viacom will have “lackluster” fiscal x quarter results, but he believes that performance already is built into estimates.  For the full fiscal year, Eagan expects ad revenue at Viacom to decline about 2%, better than the 2.9% decline in fiscal 2014 but worse than fiscal 2015’s 0.7% deficit. Affiliate fee growth of 1.6% in fiscal 2016 is behind the 3.6% rise last year and the 11.3% increase in 2014.

In contrast, Eagan expects CBS to grow ad revenue by nearly 10% in 2016, up from a 3.3% decline in 2015, while affiliate fees increase 4.1%, compared to 0.5% growth in 2015.

Walt Disney Co. chief operating officer Tom Staggs, the man that most analysts believe will take over the CEO spot once chairman and CEO Bob Iger retires in 2018,  defended the programmer at an industry conference Thursday, adding that the recent falloff in content stocks was overblown.

Disney shares plunged in early August  after Iger revised ESPN’s guidance, based on what he said was a slight increase in subscriber losses. But investors took that news as a signal that much worse times were ahead, and sent the entire sector into a tailspin.

“The short answer is, yes,” Staggs said at the Bank of America Merrill Lynch Media, Communications and Entertainment conference in Beverly Hills, Calif., when asked if the selloff was an over-reaction.

Staggs defended ESPN, adding that the sports juggernaut has a long runway of growth ahead of it. But he also acknowledged that the landscape is evolving.

While over-the-top services continue to emerge and viewing habits are being spread across linear channels, DVRs, VOD and SVOD, the perception of the pace of that change isn’t quite in step with the reality of the business.

“People sometimes think of this as a zero-sum game, more than is appropriate,” Staggs said. “We continue to believe in the bundle and we will continue to look at ways to enhance the value of that.”