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

[monothingie]

Sports made 17 billion dollars in revenue last year with 2.5 billion in profit for Disney. Getting more eyeballs on your events through partnerships and cutting into costs is exactly the type of thing any good CEO should be doing. Also, bringing it DTC should make a difference.

Separate the forest from the trees. The profitability of ESPN has dropped consistently and considerably. Advertising, Subscription Fees, and league rights are killing ESPN. Switching to an all streaming model has to this point been unsuccessful. In fact Disney has shown where they want to go with their sports broadcasting by partnering with RSNs who would ordinarily be competitors to try to salvage something in the DTC world of sports.

No one wants ESPN to own or partner with. Even Iger can't put enough lipstick on this pig to sell it.

Yes, Disney owns less than 50%. Something like 46% in one and 48% in the other park though I don't remember which is which.

And the Chinese Government owns the rest, has significant control, and can takeover Disney's share at their complete discretion.

No, the point is that they can't do anything without some narrative getting pushed that they are out to get or drive away one group or the other. The problem is it is just that, a narrative. They don't want to push anyone away. Money is money.

What narrative? Virtually every move the've made over the past several years has created animosity with guests and caused a not insignificant portion of the guests, some of which are their most loyal customers to just walkaway. That is not what you do.

Go ahead and explain how Bluey theme park rights is going to make a meaningful difference to park attendance.

Because it is the hottest thing that Disney features right now.

Yes, the exception. If they hit Netflix levels DTC will have actually made linear levels so it is exactly the target they should be aiming for.

Now look at every other major studio. Comcast, Sony, Paramount, Warner are all underperforming the market over that time frame by a good size margin.

Comcast is not a good comparison because they are a communications company first even though NBCU mirrors Disney in a lot of competitive areas. Paramount and Warner were dying before DTC became fashionable and aren't even in the same league as Disney. Bob has made his admiration of Netflix know, not only because it excels on the DTC front, but because their creative end leapfrogs D+ .

Does that not suggest to you there is a larger problem with the segment as a whole?

The DTC being a panacea of profits is a pipe dream that egocentric CEOS bought hook line and sinker.

70% chance he is no longer the CEO at the end of his contract in 2026. 100% chance he is gone by 2028.

 

[lazyboy97o]

I'm using the Bureau of Labor Statistics' CPI calculator for inflation, comparing January of each year.

Wouldn’t October make more sense since that aligns with Disney’s fiscal year?

 

[Sirwalterraleigh]

@lentesta

I’m not sure there WAS international capex prior to 2004? That’s when Hong Kong went online and Disney had to start taking more of a stake in the “independent” euro?

 

[JD80]

I'm trying to measure Disney's domestic park CapEx from 1981 to today, to see how much each CEO invested in those parks. I've downloaded all of the company's annual reports since 1981 (Dropbox link).

Here's what I've got so far. I'd appreciate it if folks could take a look and let me know where I'm off.

View attachment 796444

A couple of things:

• I'm missing the 1986 and 1990 annual reports. But the 1987 and 1991 reports show YoY numbers.
• It looks like Disney didn't break out international park CapEx until 2004?
• This time period includes the building of Disney-MGM, Animal Kingdom, and DCA version 1.0 and 2.0.
• I'm using the Bureau of Labor Statistics' CPI calculator for inflation, comparing January of each year.

Could we go deeper with hotel vs park vs infrastructure? Does that matter?

Is DVC included?

 

[Disstevefan1]

re

I'm trying to measure Disney's domestic park CapEx from 1981 to today, to see how much each CEO invested in those parks. I've downloaded all of the company's annual reports since 1981 (Dropbox link).

Here's what I've got so far. I'd appreciate it if folks could take a look and let me know where I'm off.

View attachment 796444

A couple of things:

• I'm missing the 1986 and 1990 annual reports. But the 1987 and 1991 reports show YoY numbers.
• It looks like Disney didn't break out international park CapEx until 2004?
• This time period includes the building of Disney-MGM, Animal Kingdom, and DCA version 1.0 and 2.0.
• I'm using the Bureau of Labor Statistics' CPI calculator for inflation, comparing January of each year.

Are you adjusting for inflation so all numbers are in todays dollars?

 

[lentesta]

re

Are you adjusting for inflation so all numbers are in todays dollars?

Yes - there's a separate column for that.

 

[Dranth]

No one wants ESPN to own or partner with.

Really? Is that why Fox and WBD just partnered up with them? You don't think anyone will use that watch the NFL, MLB, NHL, NASCAR, PGA, and collegiate sports from the Big 10, ACC, and SEC?

Switching to an all streaming model has to this point been unsuccessful.

You say this in the section talking about ESPN but they haven't even started the all streaming model for that yet.

Virtually every move the've made over the past several years has created animosity with guests and caused a not insignificant portion of the guests, some of which are their most loyal customers to just walkaway.

Go ahead and name some that have happened since Iger has returned.

The DTC being a panacea of profits is a pipe dream that egocentric CEOS bought hook line and sinker.

Where did anyone claim it was going to be? Being successful is not the same as becoming the be all end all profit center to last until the end of time. There is no reason they can't reach low end Netflix numbers down the line.

 

[ParentsOf4]

@ParentsOf4 are you in possession of such info?

I have all Disney annual reports going back to 1971. Some of what these show:

From Fiscal Year 1985, Bob Eisner's first full year as CEO:

Going back further, but running to only 2016 and only looking at theme parks:

The tricky part in the second chart is taking into account DCL investments, which I removed from the second chart since these are unrelated to what's happening at WDW and DLR.

 

[monothingie]

Really? Is that why Fox and WBD just partnered up with them? You don't think anyone will use that watch the NFL, MLB, NHL, NASCAR, PGA, and collegiate sports from the Big 10, ACC, and SEC?

That was only announced this year and is a radical departure from the initial model of ESPN+. Amazon and Google have driven the licensing costs for various leagues and events through the roof. Their brute force approach to acquiring content and forcing users to view it through their platforms is something Disney and the rest could never do. But in the end RSNs collectively still get the eyeballs, ESPN with some exceptions do not.

You say this in the section talking about ESPN but they haven't even started the all streaming model for that yet.

Yes because their first attempt floundered.

Go ahead and name some that have happened since Iger has returned.

Park Pass, Genie, Price Increases, not restoring pre pandemic level service, shall I go on? Oh yeah and how could I forget, the treating of AP holders like scum.

Where did anyone claim it was going to be? Being successful is not the same as becoming the be all end all profit center to last until the end of time. There is no reason they can't reach low end Netflix numbers down the line.

Having a foreseeable future of breaking even or eeking out a meager profit after dumping tens of billions of dollars into D+ was not in the cards. It will be many, many, many years before they could possibly recoup their losses.

 

[BrianLo]

I have all Disney annual reports going back to 1971. Some of what these show:

From Fiscal Year 1985, Bob Eisner's first full year as CEO:

View attachment 796469

Going back further, but running to only 2016 and only looking at theme parks:

View attachment 796471

The tricky part in the second chart is taking into account DCL investments, which I removed from the second chart since these are unrelated to what's happening at WDW and DLR.

These are great, as always.

My one slight criticism with your second chart. While you normalize the expenditure per theme park, that misconstrues what is going on under the hood. Because the majority of those spending fluxes were quite literally on "new/other" theme parks and cruise ships.

I know you are trying to paint a picture that they spend less on each individual park, but that isn't exactly what is going on there per-say. At least not in that extreme.

 

[Sirwalterraleigh]

Really? Is that why Fox and WBD just partnered up with them? You don't think anyone will use that watch the NFL, MLB, NHL, NASCAR, PGA, and collegiate sports from the Big 10, ACC, and SEC?

The sports landscape is such:
Regional still works because they negotiate their own contracts…more or less

“National” sports stations are dead…no path for them

The leagues will go DTC…unless they can extort desperate carriers into sweet heart deals. Which many…like the nba and sec…already have. It’s no risk for them.

And the fox/wb/espn is pretty obvious…three struggling things trying to throw their noodles on the wall and see if they’ll stick?
They won’t

You say this in the section talking about ESPN but they haven't even started the all streaming model for that yet.

ESPN+ has gotten almost zero traction…it’s a loss leader like all but one streams for all intents and purposes.

The reason they haven’t gone “full in” is they are desperately clinging to what’s left of their sub fees and ads from broadcast. They’re not in a position to take more losses.

Go ahead and name some that have happened since Iger has returned.

Are you serious?
1. He never left. We can’t have a genuine discussion with that disingenuous premise.
2. What HAS worked? Nothing in the parks…honeslty.

Inside out 2 and some baby yoda merch?

Cruiseline?

That ain’t a lot.

Where did anyone claim it was going to be? Being successful is not the same as becoming the be all end all profit center to last until the end of time. There is no reason they can't reach low end Netflix numbers down the line.

Now here’s where we all go down memory lane with truth serum.

5 years ago you couldn’t even suggest D+ wasn’t gonna be a smash without being brow beaten off this board.

Why? The “brand”…the brand is everything and Bob made himself the brand…brand, brand, brand brand brand brandy brand.

Then when they “smashed” their sub projections…it was victory lap city.

And here we is…no money.

And now almost everyone is matter of factly admitting streaming itself is the problem? Casually like this thread?

That is as disingenuous as it comes for many.

Dig through old threads if you’re really bored. I never forget a fish I’ve seen before.

 

[BrianLo]

Having a foreseeable future of breaking even or eeking out a meager profit after dumping tens of billions of dollars into D+ was not in the cards. It will be many, many, many years before they could possibly recoup their losses.

This is incorrect. I don't understand why the presumption everyone has it that they've closed a 6 billion dollar annual deficit in essentially 4-5 quarters will suddenly halt. They will continue to improve margins.

Critically, I think they need to actually commit to future guidance so that everyone stops belabouring this. But they have continued to meet their original guidance, one that Iger committed to even before Capek changed the model.

D+ is an in house built service. Is it 10+ billion in the hole? You bet.

But the alternative is Hulu, which required 20+ billion in acquisition costs (with them also already pre-owning a third). D+ was actually a pretty cheap start up cost all things considered. The service is already worth way more than they've sunk into it. Which, technically, is the break even point on its existence.

 

[BrianLo]

The Acolyte has lower views than Ashoka which was previously the lowest viewed Live Action Star Wars Series ever on D+. So some context to your statement is needed.

FYI, that is Andor currently. Also supporting a renewal, as did Ahsoka. Are the numbers a-mazing for Star Wars? Perhaps not. But they are 'good numbers' compared to most other streaming products still.

And the Chinese Government owns the rest, has significant control, and can takeover Disney's share at their complete discretion.

I really wish this tin-foil hat theory would die. Must I really go and dig up posts from a decade ago promising me this was imminent? Is it possible? Sure. Is China willing to set themselves back 50 years in terms of International trade? That doesn't seem to be in the cards.

Or might I remind everyone that the most hostile government(s) since I was promised China was a bad partner ten years ago has been American (Florida), followed by American (Anaheim).

Seizing Disney parks doesn't happen in a microcosm. That said, if it were to suddenly happen on a very short timeframe, they've largely come out ahead on Shanghai now. Hong Kong needs a few years, but it's moving a very successful direction finally. Though that one is also now resuming licensing fees, which helps Disney shunt a larger portion of the profit than their ownership stake would suggest in both parks cases.

 

[monothingie]

This is incorrect. I don't understand why the presumption everyone has it that they've closed a 6 billion dollar annual deficit in essentially 4-5 quarters will suddenly halt. They will continue to improve margins.

No they won't. They are unable to control costs. Most recent case in point was "The Acolyte" which reportedly cost at least $180M for eight, 30 minute episodes. That is not at all sustainable and a pathway to growth.

Also don't forget that one of the main reasons they loss less money was they weren't spending it on anything for the most of last year.

Critically, I think they need to actually commit to future guidance so that everyone stops belabouring this. But they have continued to meet their original guidance, one that Iger committed to even before Capek changed the model.

Switching to ad-based saved D+ and was the best thing that Chapek could have done. The only problem is that a subscriber growth in the core region has flatlined and D+ programing quite frankly sucks.

D+ is an in house built service. Is it 10+ billion in the hole? You bet.

FAST Services like Tubi and Pluto cost a fraction of the cost of D+ and are growing their revenue and subscriber base more rapidly than D+.

But the alternative is Hulu, which required 20+ billion in acquisition costs (with them also already pre-owning a third). D+ was actually a pretty cheap start up cost all things considered. The service is already worth way more than they've sunk into it. Which, technically, is the break even point on its existence.

But again D+ and others started life with having access to their respective vaults so of course the development costs were cheap. The problem was with the original content that drove expenses up, so much so that the only way to save the service was to go ad-based.

Iger never anticipated that the service needed to go ad-based, so that automatically throws out the initial forecast of when and how the service would eventually be profitable. They had to reinvent the entire revenue model of D+ 2-3 years in, in order to not loose even more money.

 

[lentesta]

Wouldn’t October make more sense since that aligns with Disney’s fiscal year?

Maybe. I'll check.

I realized too that I should add a column for "Number of existing and under-development parks".

 

[monothingie]

FYI, that is Andor currently. Also supporting a renewal, as did Ahsoka. Are the numbers a-mazing for Star Wars? Perhaps not. But they are 'good numbers' compared to most other streaming products still.

Based on Data from Neilson and Luminate Analytics,
Andor at the end of its run averaged around 659M Minutes watched per episode.
Ashoka was around 432M Minutes watched per episode.
Acolyte based on ratings data for the at least 4 episodes so far is averaged around 210M Minutes watched per episode.

I really wish this tin-foil hat theory would die. Must I really go and dig up posts from a decade ago promising me this was imminent? Is it possible? Sure. Is China willing to set themselves back 50 years in terms of International trade? That doesn't seem to be in the cards.

Or might I remind everyone that the most hostile government(s) since I was promised China was a bad partner ten years ago has been American (Florida), followed by American (Anaheim).

I don't think anyone is saying that it is imminent, I just pointed out that it is possible. Western companies certainly have gotten burned before in China because of the level of control the government has on almost all aspects of business there.

Seizing Disney parks doesn't happen in a microcosm. That said, if it were to suddenly happen on a very short timeframe, they've largely come out ahead on Shanghai now. Hong Kong needs a few years, but it's moving a very successful direction finally. Though that one is also now resuming licensing fees, which helps Disney shunt a larger portion of the profit than their ownership stake would suggest in both parks cases.

That still doesn't change the fact that the domestic parks are the cash engine of the company and that the focus of resources and capital allocation past, present, and future does not reflect that. Why? An intentional decision by leadership based on ego or stupidity that the Chinese parks can provide better return on investment than the domestic parks.

 

[BrianLo]

No they won't. They are unable to control costs. Most recent case in point was "The Acolyte" which reportedly cost at least $180M for eight, 30 minute episodes. That is not at all sustainable and a pathway to growth.

DTC had its more recent quarterly revenue of 5.64 billion. I won't lie that these series are cheap. But we just had Shōgun renewed for a 2nd and 3rd season (and there are no 2nd and 3rd seasons) with a 250 million dollar budget. With viewership less than Acolyte. I don't know all the inner workings of their math, but there seems to be measures that they are happy with the viewership metrics on these highly priced series.

Also don't forget that one of the main reasons they loss less money was they weren't spending it on anything for the most of last year.

In what way? There have been no content spend containment reflected in these equations yet. If you dig into their quarterlies, content spend is still up. The strike related deferrals won't be truly reflected until later 2024/2025 due to the nature of these series being amortized into the service starting on release. Similarly, the movie glut from the strikes only really starts up this quarter when typically Q2 movies should have been hitting streaming.

 

[Tha Realest]

Based on Data from Neilson and Luminate Analytics,
Andor at the end of its run averaged around 659M Minutes watched per episode.
Ashoka was around 432M Minutes watched per episode.
Acolyte based on ratings data for the at least 4 episodes so far is averaged around 210M Minutes watched per episode.

Andor already had announced it would have both a second season and that would close out the story even before the first season had completed.
Ahsoka is part of the central Mandalorian franchise and is believed to be tying up Mando storylines in advance of the films, so some external justification beyond the viewership alone to boost its chances of a renewal.

 

[monothingie]

DTC had its more recent quarterly revenue of 5.64 billion. I won't lie that these series are cheap. But we just had Shōgun renewed for a 2nd and 3rd season (and there are no 2nd and 3rd seasons) with a 250 million dollar budget. With viewership less than Acolyte. I don't know all the inner workings of their math, but there seems to be measures that they are happy with the viewership metrics on these highly priced series.

Disney is not unique to blowing big money on crap programing.
Rings of Power....
They're just better at consistently doing it.

In what way? There have been no content spend containment reflected in these equations yet. If you dig into their quarterlies, content spend is still up. The strike related deferrals won't be truly reflected until later 2024/2025 due to the nature of these series being amortized into the service starting on release. Similarly, the movie glut from the strikes only really starts up this quarter when typically Q2 movies should have been hitting streaming.

Correct me if I'm wrong, but that wouldn't even be reflected in D+ since their revenue is derived from the acquisition of content from other Disney Divisions like Marvel, Lucasfilm, and Pixar for example. The strike required a lot of content schedules to be shifted which resulted in changes to how and when the programing was going to be shown which directly affected expenses with D+.

 

[BrianLo]

Based on Data from Neilson and Luminate Analytics,
Andor at the end of its run averaged around 659M Minutes watched per episode.
Ashoka was around 432M Minutes watched per episode.
Acolyte based on ratings data for the at least 4 episodes so far is averaged around 210M Minutes watched per episode.

Not my work, but Ahsoka comes out ahead over its average. The uptick on Andor episode 12 is likely a bit over-representative of people catching up on old episodes in the final week of data.

We don't have Neilsen data quite yet on Acolyte. It's hard for me to say where Luminate slots in because we are comping two different sources, I really have not followed them historically. Not that I have a problem with Luminate, I just haven't paid attention to their data.

Disney's presser would have episode 1 only with 477 million minutes streamed, we won't have the complete picture from Nielsen until this next week, which will represent 1/2.

However, I very much will acknowledge if the series drops off a cliff as the Luminate data suggests. But really the point I wanted to make originally was that Ahsoka was not the lowest viewership, it was Andor. Especially in light of its longer episodes.