News The Walt Disney Company Board of Directors Extends Robert A. Iger’s Contract as CEO Through 2026

[WoundedDreamer]

Two questions, what do you consider their core competency and what do you drop?

Making family entertainment.

 

[Dranth]

Making family entertainment.

That is one of the two questions. So, what do you drop to accomplish that and how does each thing you drop bring you closer to that goal?

 

[Disstevefan1]

It is wild. I was sure that Disney was going to have something great planned. Even if they announced that they were breaking ground tomorrow on all sorts of new lands and rides we'd still be like 3 years out. Maybe they'll try to squeeze the Dinosaur/Indiana Jones refurb in? But we're getting to the end of the runway fast and nothing is coming. I guess I shouldn't be surprised. Avatar was famously their big response to the Wizarding World of Harry Potter. So, it only took seven years for Disney to show Universal its place. By then Universal had opened a whole second land.

Great points. Disney takes a long time to do things. Look how long it’s taking to complete “the great EPCOT mistake” they are working on now.

There is not enough time for them to do anything. I think they are just going to “let it ride” and see what happens.

I think there are more “Disney only” fans out there than we think and Disney knows that.

 

[WoundedDreamer]

That is one of the two questions. So, what do you drop to accomplish that and how does each thing you drop bring you closer to that goal?

Drop Hulu, ABC, ESPN, FX, and Fox. With the possible exception of ESPN, none of those products are family entertainment. ESPN I would drop simply because running a sports broadcast network is different from traditional Disney storytelling. Yes, journalists tell stories, but most would admit there's a difference between reporting the news and making a movie. Moreover, ESPN and ABC should stick together for maximum punch. They're the news businesses.

And after having shed all those assets, Disney can focus on telling great stories through their remaining core brands.

 

[MR.Dis]

Great points. Disney takes a long time to do things. Look how long it’s taking to complete “the great EPCOT mistake” they are working on now.

There is not enough time for them to do anything. I think they are just going to “let it ride” and see what happens.

I think there are more “Disney only” fans out there than we think and Disney knows that.

Kinda agree. At D23 I expect a big pie in the sky on Beyond Thunder Mountain. Since MK is the most visited theme park in the world, it will create all kinds of excitement. The key is when will shovels hit the ground? One year, 2, three or more? Of course it maybe never. And if it does, when the bean counters get involved, how much of the grand planned will be cut back? Famously: Pandora, Toy Story land, Star Wars land, and Epcot redo were all cut back significantly from what was originally announced.

 

[WoundedDreamer]

Kinda agree. At D23 I expect a big pie in the sky on Beyond Thunder Mountain. Since MK is the most visited theme park in the world, it will create all kinds of excitement. The key is when will shovels hit the ground? One year, 2, three or more? Of course it maybe never. And if it does, when the bean counters get involved, how much of the grand planned will be cut back? Famously: Pandora, Toy Story land, Star Wars land, and Epcot redo were all cut back significantly from what was originally announced.

Yeah, and even once it's built the bean counters are there to ruin it. Flight glasses on Pandora costing too much money? We'll go 2D! Yeti needs a refurb? Forget it!

 

[Nubs70]

Two questions, what do you consider their core competency and what do you drop?

If linear is dead, drop all linear assets, or transform into streaming. If brick n mortar theatrical releases are below margin requirements, transform into streaming VOD to capture the expense of distribution (lower SGA costs = profit $).

 

[_caleb]

If linear is dead, drop all linear assets, or transform into streaming. If brick n mortar theatrical releases are below margin requirements, transform into streaming VOD to capture the expense of distribution (lower SGA costs = profit $).

Isn't this what they're doing? Maybe not as quickly as some would like, but this is literally the plan, isn't it?

 

[_caleb]

Drop Hulu, ABC, ESPN, FX, and Fox. With the possible exception of ESPN, none of those products are family entertainment. ESPN I would drop simply because running a sports broadcast network is different from traditional Disney storytelling. Yes, journalists tell stories, but most would admit there's a difference between reporting the news and making a movie. Moreover, ESPN and ABC should stick together for maximum punch. They're the news businesses.

And after having shed all those assets, Disney can focus on telling great stories through their remaining core brands.

If they drop all of those, they have VERY limited content. Then D+ really would be just the modern equivalent to "direct to home video."

Your ideas about what makes "family entertainment" seem pretty narrow. And I'm certain that if they focused only on what you'd like to see, they would be a much smaller business making far less money.

 

[Dranth]

Drop Hulu, ABC, ESPN, FX, and Fox. With the possible exception of ESPN, none of those products are family entertainment. ESPN I would drop simply because running a sports broadcast network is different from traditional Disney storytelling. Yes, journalists tell stories, but most would admit there's a difference between reporting the news and making a movie. Moreover, ESPN and ABC should stick together for maximum punch. They're the news businesses.

And after having shed all those assets, Disney can focus on telling great stories through their remaining core brands.

I would personally put ESPN firmly in the family entertainment category and they still make some good money so no need to dump it. Converting this to a full streaming option is also a good move. Use those carriage fees as long as they remain to help pay for the transition and conversion to the online platform. Bottom line, there will always be an appetite for live sports so handled well, ESPN can survive and be a reasonable money maker for the foreseeable future.

I go back and forth on ABC. However, I can easily see keeping the studios to feed the content machine and dump the distribution side of it.

The rest honestly depends on several things to me but one of the biggest is the vision for D+ going forward. If D+ is going to reach a wider audience then you need the additional studios and content. On the other hand, if it is just going to be an online vault for what people think of as Disney then the rest can go. I personally prefer a combined Hulu/Disney with Hulu quarantined off like they do overseas. We'll see how it goes when they roll it out here.

 

[UNCgolf]

Reversing the mistake that was the ABC/ESPN purchase would be a huge win.

I'm not sure how you could even begin to argue buying ESPN was a mistake, unless it's just for personal reasons and not anything related to Disney's financial success. It was one of the main reasons Disney's stock reached the highs it did; it was an absolute profitability juggernaut for a very long time. At one point there were indications that it was potentially making more money than all other Disney media content combined.

 

[Chip Chipperson]

Peltz or whomever is going to restructure things. A simple thing would to be do not finance films that cost more to bring to market than bring in return.

And what experience does Peltz have producing movies? What makes his judgment in that regard any better than the people there now? It's not like they made "Wish" thinking, "This will definitely lose money." Peltz seems to want to focus on cutting costs everywhere he can. We already have Budget Cut Bob in place and look how things go. Things get announced for the parks and then are usually either downgraded by budget cuts or scrapped completely. Imagine what would happen with someone even less willing to spend. He's already demanding to see how the funds earmarked for additions and upkeep at the parks will demonstrate ROI. In other words, expect no additions and worse upkeep at the parks.

 

[WoundedDreamer]

I'm not sure how you could even begin to argue buying ESPN was a mistake, unless it's just for personal reasons and not anything related to Disney's financial success. It was one of the main reasons Disney's stock reached the highs it did; it was an absolute profitability juggernaut for a very long time. At one point there were indications that it was potentially making more money than all other Disney media content combined.

Does ESPN make money? Yes. But Disney is not Berkshire Hathaway investing in unrelated businesses. Their businesses reenforce one another. ESPN never had any way to be leveraged in the theme parks or movie studio. Disney could drop ESPN tomorrow and no one would ever know the difference. The products would be completely unaffected. Even when the acquisition went through, the only appreciable benefit was bundling Disney Channel with ESPN in order to drive prices higher. Now they can't even do that because Disney Channel has imploded. There is nothing keeping ESPN within Disney except Iger's love of rubbing shoulders with sports teams.

Disney could be smaller and nimbler. More laser focused on their core competencies.

I would personally put ESPN firmly in the family entertainment category and they still make some good money so no need to dump it. Converting this to a full streaming option is also a good move. Use those carriage fees as long as they remain to help pay for the transition and conversion to the online platform. Bottom line, there will always be an appetite for live sports so handled well, ESPN can survive and be a reasonable money maker for the foreseeable future.

I go back and forth on ABC. However, I can easily see keeping the studios to feed the content machine and dump the distribution side of it.

The rest honestly depends on several things to me but one of the biggest is the vision for D+ going forward. If D+ is going to reach a wider audience then you need the additional studios and content. On the other hand, if it is just going to be an online vault for what people think of as Disney then the rest can go. I personally prefer a combined Hulu/Disney with Hulu quarantined off like they do overseas. We'll see how it goes when they roll it out here.

ESPN is more news than content creation though. And that's where I still get stuck. In addition, ESPN is not part of the core Disney flywheel. Let Amazon or Comcast or whoever dump the cash needed into making the ESPN+ successful. The best businesses focus on doing a few things really really well. Disney has strayed from that.

Even if ABC/ESPN were spun off, there's a good chance the two entities (Walt Disney Co. and ABC/ESPN) would be worth more than they are right now. The shareholders won't mind. The customers won't mind. Why not do it?

And what if Disney+ is mostly Disney's film catalogue and the occasional Disney+ TV show? If they're making really good content, what's the problem? Walt Disney Pictures, Lucasfilm, Marvel, Walt Disney Animation, and Pixar all working together to make great movies and TV shows. Everyone will know that Disney+ is the ultimate place for family entertainment. What's not to love?

Or they can try to add more adult content on Disney+ in order to be something they're not.

 

[Sirwalterraleigh]

It’s not just how long it took but how much they spent churning out a lot of schlock. People are essentially saying “Be like Netflix but don’t do what Netflix did/does.”

D+ needs to make better content at higher volume.

That’s their problem…there’s nothing drawing people to it in the important demos in the key numbers.

Like…you’ve got the biggest pop culture movie franchise in history…and you can neither make movies out of it or produce more than 15 episodes a year that make a blip on the entertainment radar.

It’s horrifically bad management

 

[Sirwalterraleigh]

PSA: no one is suggesting Peltz become head, overlord and master like Iger…

That is the problem in the first place.

A couple of dissenting voices on the board would probably do it some good. They’re all Iger puppets and everyone god damn knows it.

Best case here is still a firm exit for Bob and expedient, rigorous outside search for replacement.

This is exactly what Roy Disney fought against. It’s worse…actually. Because the warning signs were clear and known.

 

[LSLS]

What's the alternative? Kevin Mayer and Tom Staggs? Alan Horn? Josh D'Amaro? Where's the visionary coming to save Disney? No one is coming to save Disney. And do you trust Iger's handpicked board to find someone who can actually lead Disney forward? Remember this is the same board that picked Bob Chapek only to 180 a few years later.

Reversing the mistake that was the ABC/ESPN purchase would be a huge win. If Peltz proposes that, then I would be over the moon. Either way Disney will probably remain systemically broken for the next decade+. This is the late 1990s early 2000s again. It will take years of patience for Walt Disney Co. to get back on track if it's not bought out first.

And wasn't it Bob Chapek that Peltz wanted to work with on cutting everything before he was fired and Peltz started his first proxy battle?

 

[Chip Chipperson]

Does ESPN make money? Yes. But Disney is not Berkshire Hathaway investing in unrelated businesses. Their businesses reenforce one another. ESPN never had any way to be leveraged in the theme parks or movie studio. Disney could drop ESPN tomorrow and no one would ever know the difference. The products would be completely unaffected. Even when the acquisition went through, the only appreciable benefit was bundling Disney Channel with ESPN in order to drive prices higher. Now they can't even do that because Disney Channel has imploded. There is nothing keeping ESPN within Disney except Iger's love of rubbing shoulders with sports teams.

ESPN has never had any way to be leveraged in the parks? What do you think the ESPN Wide World of Sports complex at WDW is??? Ever been in the parks during one of the many cheer or dance competitions or a Pop Warner tournament? The parks and resorts (usually All-Star but there is spillover to others) are packed with the groups participating in those events. It was also what allowed them to host the NBA during the COVID bubble season - which also allowed them to fill rooms at Grand Floridian to house the players. And that, in turn, created content for ESPN so that there was actually something to watch on TV when the rest of the entertainment industry was shut down.

 

[Sirwalterraleigh]

What's the alternative? Kevin Mayer and Tom Staggs? Alan Horn? Josh D'Amaro? Where's the visionary coming to save Disney? No one is coming to save Disney. And do you trust Iger's handpicked board to find someone who can actually lead Disney forward? Remember this is the same board that picked Bob Chapek only to 180 a few years later.

Reversing the mistake that was the ABC/ESPN purchase would be a huge win. If Peltz proposes that, then I would be over the moon. Either way Disney will probably remain systemically broken for the next decade+. This is the late 1990s early 2000s again. It will take years of patience for Walt Disney Co. to get back on track if it's not bought out first.

The board never picked chapek

Chapek was retained so no one would suggest replacing Iger.

There…I gave away the most obvious secret ever

 

[MisterPenguin]

If linear is dead, drop all linear assets, or transform into streaming. If brick n mortar theatrical releases are below margin requirements, transform into streaming VOD to capture the expense of distribution (lower SGA costs = profit $).

Linear consists of:
1. Broadcasting stations
2. TV studios that make content.

Iger is already putting out the feelers to sell #1. He's keeping the content producers for streaming.

 

[_caleb]

Does ESPN make money? Yes. But Disney is not Berkshire Hathaway investing in unrelated businesses.

Sports programming is an unrelated business?

Their businesses reenforce one another. ESPN never had any way to be leveraged in the theme parks or movie studio.

Huh? All Star Sports Resort, NBA Experience (failed, but still), merch sales, every sports film every released...

Disney could drop ESPN tomorrow and no one would ever know the difference. The products would be completely unaffected. Even when the acquisition went through, the only appreciable benefit was bundling Disney Channel with ESPN in order to drive prices higher. Now they can't even do that because Disney Channel has imploded. There is nothing keeping ESPN within Disney except Iger's love of rubbing shoulders with sports teams.

During the pandemic, I watched the MLS is Back soccer tournament (hosted by WDW's Wide World of Sports Complex and produced by ESPN), and the end of the 2020 NBA season also hosted at WDW and produced by ESPN. There is so much room for more integration like this! Can you imagine if tournaments like these were open to spectators? If they were streamed live on ESPN/D+?

Disney could be smaller and nimbler. More laser focused on their core competencies.

You want Disney to be just animated films and theme parks? For a long time now (since Walt's time), Disney has expanded its business to create an interconnected ecosystem. That system has grown in size and complexity, but it's still functional. The impatience of some fans and investors during a significant investment period is no reason to deconstruct the entire thing.

at if Disney+ is mostly Disney's film catalogue and the occasional Disney+ TV show? If they're making really good content, what's the problem?

The problem is that content alone doesn't bring in $10/mo. subscriptions.

Walt Disney Pictures, Lucasfilm, Marvel, Walt Disney Animation, and Pixar all working together to make great movies and TV shows. Everyone will know that Disney+ is the ultimate place for family entertainment. What's not to love?

That's what they're doing...?

Or they can try to add more adult content on Disney+ in order to be something they're not.

How are they trying to be what are they not?