TheQuartering [10/10/2023]
Bob Iger’s heralded return to the Disney C-suite last year hasn’t produced the rosy results investors hoped for, and the array of setbacks he’s faced has left the 72-year-old executive “overwhelmed and exhausted,” even privately questioning why he returned, Bloomberg reported Tuesday.
Disney’s stock is now down more than 9% since Iger took back the CEO title from Bob Chapek in November and activist investor Nelson Peltz is once again rattling the cage and pushing for a seat on the company’s board.
But the challenges at the House of Mouse go beyond the potential for a renewed proxy fight with a cantankerous investor.
The company was in “worse shape than Iger realized” when he came back, Bloomberg reported.
On the streaming side, Disney+ was losing hundreds of millions of dollars every quarter, and the 2024 deadline for turning a profit — a promise the company made to Wall Street — was looming, even as costs for producing shows was soaring. A deal Iger shepherded through in 2016 to acquire streaming technology company BAMTech turned out to be more expensive than expected and the tech was not as efficient as rivals’, Bloomberg reported. Another deadline Iger negotiated with Comcast for Disney to acquire the 33% of Hulu that it doesn’t own for no less than $27.5 billion is fast approaching, but it’s not clear what value taking the stake will deliver.
In addition, Iger fumbled badly with a comment that the demands made by WGA and SAG-AFTRA strikers this summer were “just not realistic,” sparking massive backlash as actors and writers on the picket line pointed to his $27 million annual salary.
The sum total of the challenges has left the executive joking, “Why did I come back?” the report said, noting the once tireless CEO spent a significant amount of time on his yacht in the Mediterranean this summer, then was laid up at home following surgery.
The musing comes despite the report saying that Iger “immediately regretted” his 2020 departure from the CEO’s chair and its accompanying spotlight, and tried to get his job back, an account the company disputed.
Iger’s return was heralded by Wall Street and staff worldwide, and he had early success with fending off Peltz, who mounted a proxy battle over Disney spending, by announcing $3 billion in spending cuts, including axing 7,000 jobs.
Those cuts came with a restructuring plan that created new divisions in the company. But it’s still losing hundreds of millions on streaming and it suffered a string of box-office flops this summer despite a resurgence in theater-going led by rival studios’ productions of “Barbie” and “Oppenheimer.”
Moreover, “Iger seemed blindsided by the state of the TV industry,” Bloomberg reported. With its networks rapidly losing viewers as they switch to streaming, the report said Iger now has few choices but to sell off Disney’s TV business, which includes ABC, The Disney Channel, FX and National Geographic networks, while ESPN is “in desperate need of a transformation from a shrinking cable operation into a streaming service.”