A year into the run of Bob Iger 2: Return of the CEO, the Walt Disney Co. has not yet rediscovered its mojo.
For most of Iger’s initial 14-year stint in the corner office, Disney was the pace-setter in media and entertainment, pulling off stunning M&A deals and amassing a sizable competitive advantage. Now, the company has fallen back to the pack as a Biblical series of challenges have come to define a centennial year that many staffers would just as soon forget than commemorate.
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On Tuesday morning at 9 a.m. PT, Iger and a handful of top executives will convene a town hall for cast members (read: employees). There should be no shortage of questions on the minds of those listening to management frame the current circumstances. In addition to Iger, the event will feature top execs Alan Bergman (film), Josh D’Amaro (parks), Jimmy Pitaro (ESPN) and Dana Walden (TV). The town hall is being held a year after Iger convened one in 2022 just a week after returning to the executive suite.
ABC News anchor David Muir will lead a moderated discussion about “future building opportunities.” That billing matches one of the messages from the company’s most recent earnings call, when Iger said progress in several areas “has allowed us to move beyond this period of fixing and begin building our businesses again.”
A number of renovation jobs are still required in order to revive Disney stock, however. Thousands of workers have exited amid cutbacks aimed at saving $7.5 billion in costs, a multi-round process that has tested morale. Linear TV networks face existential challenges, as a September carriage battle with Charter demonstrated. ESPN still packs a ratings punch, but it is seeking a partner’s help to mount an à la carte streaming service in order to surmount the effects of cord-cutting. The movie studio is mired in its worst slump in a decade, with Marvel, Pixar and Lucasfilm all in various states of drift. Theme parks are humming again after the pandemic but face Florida political pressure and questions about ambitious future expansion plans. Streaming is marching toward profitability, but the company’s $9 billion-plus commitment to buy out Comcast’s stake in Hulu has upped the noise level about Hulu’s future as a stand-alone offering.
It has also gotten bumpy in the corporate suite. Activist investor Nelson Peltz, who has aligned with former Marvel Entertainment chief Ike Perlmutter, has called out Iger in a renewed campaign to win board seats and implement strategic changes. Succession, which emerged as a notable flaw in Iger’s otherwise charmed resume, remains a concern with some investors. The 72-year-old chief exec had his contract extended through the end of 2026 and has said that a board committee has already convened to weigh potential candidates to take over from him.
With the ultra-smooth Muir emceeing the town hall, insiders have indicated to Deadline that the presentation seems unlikely to turn into the kind of corporate High Noon of some all-hands media business gatherings. Disney recently wrapped up its fiscal year, filing its annual report last week with the SEC. As will soon be the case when the company’s ABC broadcasts the New Year’s Eve ball drop in Times Square, the emphasis will be on looking forward to 2024 and beyond.
The target audience Tuesday will be employees, but Disney is also looking to stay in Wall Street’s good graces. Despite general affirmation, a considerable degree of doubt has crept into the market’s view of the stock. The Dow Jones 30 component, seen as a bellwether for broader consumer sentiment, has drifted down from $97.58 when Iger took over in November 2022 to $95.17 at the end of Monday’s trading.
Analysts have largely stood by the company’s battle-tested brand and mix of assets, pointing to encouraging signs like better-than-expected free cash flow in the most recent quarter, as well as lower content spending forecasts. “Disney appears to actually be on the precipice of improving financial returns in the non-parks divisions of the company,” MoffettNathanson’s Michael Nathanson wrote in a recent note to clients, thanks in part to Iger’s efforts to counteract the “overzealous pursuit of the streaming wars under prior leadership.” Guggenheim’s Michael Morris, who shares Nathanson’s “buy” rating and $115 price target on the stock, says the valuation is based on “our confidence in the long-term strength and potential for parks growth and the renewed focus on profitable growth at the company’s media and entertainment assets.”
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