What Is the Current State of Disney — 2023 Edition
Every year in mid-December, MickeyBlog takes a hard look at The Walt Disney Company to determine its current status.
The 2023 edition of this debate is quite possibly the most challenging one yet…and that’s including the 2020 evaluation that involved a pandemic.
So, what is the current state of Disney? As usual, I have thoughts…
A Brand Still in Crisis


(Charley Gallay / Getty Images for Disney)
Let’s quickly rewind a year and remember the previous setting.
When I published last year’s article, Bob Iger had returned as CEO only three weeks prior to that point.


Photo: CNBC
While we all hoped for better under Iger than the former CEO, Bob Chapek, I described Disney as a brand in crisis.
Let’s be honest about the current state of Disney today. Wouldn’t you still say the same thing?


Photo: Walt Disney Company
As I type this, a federal court is determining whether to proceed with a lawsuit involving the state of Florida and Disney.
A few years ago, could you have imagined such a scenario? Florida is arguably suing its most essential business…and vice versa.


Photo: DIsney+
Meanwhile, Disney’s Board of Directors restored Iger as CEO because it wanted to secure the stock price.
A year ago at this time, Disney was trading in the low 90s. When the market closed today, one year later, Disney stock closed in *checks notes* the low 90s.


Photo: measureupgroup.com
We’ve had a staggering amount of hullabaloo without any significant momentum shift either way. At least, that’s the way it seems on the surface.
In reality, Bob Iger has accomplished some lofty goals, while Disney has taken on water in other, less expected areas.


Image: Disney
This ride has been so wild that Mr. Toad wants in.
So, let’s figure out what’s better, what’s worse, and what’s in store for 2024.
What Iger Has Fixed


Photo: x @starindia
Earlier this week, reports surfaced that Disney was merging its India operations with Mukesh Ambani’s Reliance to create the largest media company in South Asia.
That’s a weird story to discuss first, but it reflects how forward-thinking Iger has been this year.


Photo: Patrick T. Fallon/Bloomberg
During 2022, Bob Chapek found himself stuck in an impossible situation due to a sports rights negotiation in India.
Disney lost streaming rights to IPL cricket, which Ambani’s company proceeded to give away for free at a loss.


Photo: BBC
Live sports licensing has taken a turn for the inexplicable over the past decade, but Disney needs to play ball.
I say this because a recent cricket match claimed 59 million simultaneous streams on Disney Hotstar service.


Photo: Forbes
Media companies cannot overlook numbers that big, but Disney cannot get involved in negotiation battles for every major sport. It’s a losing proposition.
So, Iger brought back two of his old lieutenants, Kevin Mayer and Thomas O. Staggs, for advice.


Photographer: Jesse Grant/Getty Images for Disney
These three media veterans embarked on an ambitious plan to save Disney via math.
I’m not even joking.
Disney’s current woes primarily consist of financial struggles. If the company were earning more money, Wall Street would leave it alone.


Photo: Getty
Instead, Disney’s margins were dropping due to the staggering losses in the Direct-to-Consumer (DTC) division.
Iger embarked on a series of maneuvers designed to get DTC spending under control.
Sadly, these moves required layoffs and a decline in new content in 2023/2024.


Photo: Getty
However, we’re already seeing the benefits. Disney’s DTC losses decreased by roughly $1 billion in a calendar year.
In other words, Disney is approaching a breakeven point with a previous financial drain.
Now, the company expects DTC to turn a profit by the end of fiscal 2024, which is next October.
What Else Iger Has Fixed


Mandatory Credit: Photo by JUSTIN LANE/EPA-EFE/Shutterstock
Remarkably, that was just the start of Iger’s financial hot streak.
The Disney CEO made what I considered a fairly transparent bluff in an attempt to sustain some cable contracts.


Photo: Disney
To my surprise, Iger manipulated Charter-Spectrum to gain exactly the contract extension he wanted.
In the deal, Iger extended the length of ESPN’s lucrative carriage fees for multiple years while Disney+ gained guaranteed subscribers via Charter.


Photo: Getty Images/Ringer illustration
Iger uncovered a new approach to negotiations that should become the blueprint for other contract extensions with major cable vendors like Comcast.
With those Linear Networks financials secured, Iger turned his attention to Hulu, whose future lingered in the air throughout 2023.


Photo:cnet.com
Eventually, Iger wore down Comcast until the latter company agreed to allow third-party arbitration to determine Hulu’s worth.
Now, Disney has paid for (most of) Hulu and added a tile to Disney+. We now know the future of DTC. It’ll mainly occur on the Disney+ app.


Photo: English Jargon
Iger has secured the future of what he calls one of Disney’s core businesses.
Somehow, the executive did so without impinging on the future of Disney’s still-profitable Linear Networks.


Image: The Wall Street Journal
Iger recently suggested that he feels Disney has made the financials work for both businesses, a vital achievement.
If these transactions play out the way they appear well-positioned to do, Disney’s financial state is night and day better than it was a year ago.
What Iger Hasn’t Fixed


Photo: CNBC
This list begins and ends with Disney content. I have followed the box office for many years, and I’d struggle to name a surprise like Disney experienced this year.
Disney films generally disappointed or flat-out bombed in 2023.
On paper, Disney offered a tremendous lineup of films.


Photo: Disney
In execution, the production woes during the pandemic led to substandard quality for several titles.
Specifically, Haunted Mansion, Ant-Man and the Wasp: Quantumania, and Wish didn’t live up to Disney standards.


Photo: Disney
Haunted Mansion and Wish weren’t even bad movies; I liked both. But they weren’t on the level we expect for Disney titles.
Even worse, 2024 won’t be any better, and that fault lies directly at Bob Iger’s feet.


Mike Blake/Reuters
The CEO, whose net worth hovers around $700 million, described Hollywood’s actors and writers as being unrealistic during contract negotiations.
That’s like Jeff Bezos telling Amazon workers not to be so greedy. It just doesn’t fly logically.


Photo: Cincinnati Enquirer
After several months, the writers and actors ratified new contracts and effectively gained most of their demands.
Had Hollywood’s studio bosses agreed in advance, they could have avoided the strikes.


Photo: Variety
Instead, the industry shut down for half the year. In the short term, this move ostensibly helped Disney with its free cash flow.
Disney will feel the pain in 2024, though. It’ll lack a number of high-profile releases, as many films and television shows suffered delays during the strikes.


Photo: Robert Hanashiro/USA Today
Also, such disruptions during the pandemic played a sizable factor in the lackluster quality of some of Disney’s 2023 releases.
History could repeat itself with more substandard future releases unless Disney takes the correct steps and demonstrates that it has learned from past mistakes.
Iger hasn’t fixed Reedy Creek, either, although he’s done as much as he can by suing in federal court.
Expect More of the Same


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I’m not as good at peering into crystal balls as Madame Leota, but I can tell you something with confidence.
Based on what I’m expecting, 2024 will look a lot like 2023 because Disney has somehow become a lightning rod in the culture wars.


Photo: Getty Images
Now, we’ve got an election season upcoming, and while Florida Governor Ron DeSantis appears highly unlikely to win a Presidential nomination, I rule nothing out these days.
Even if DeSantis does lose, it’s challenging to envision a scenario where he and Mickey Mouse become buddies again in the short term.


Photo: CFTOD
So, we’ll spend part of the year tracking all the chaos involving the CFTOD, which was a not-ready-for-primetime player in 2023.
Meanwhile, the courts will decide who ultimately controls the former Reedy Creek land.


Photo: Fox News
Should governance of this place remain with DeSantis’ people, well, you know. Should Disney win, that’ll be better for everyone in Orlando.
However, other politicians won’t suddenly stop attacking Disney. It’s red meat for the base, and I can envision scenarios where it gets worse before it gets better.


Photo: The Wall Street Journal
We’ve moved on as a society since then, but the NFL was the subject of frequent attacks by a sitting President not that long ago.
Disney could face the same fate in 2024.
Disney’s Stuck in Purgatory Here
While Bob Iger has stated he wants to “quiet the noise” in politics, that’s not up to him.
You can say you don’t want to get a ticket for speeding, but it’s a police officer who makes that determination.
Similarly, until Disney settles on a successor, the activist investor battles will continue.


Photo: Bank rate
With the stock this low, billionaire investors recognize a win/win scenario here. They can try to push their way on the board.
Should they fail, their investment is still likely to earn them money. If they succeed, they gain a seat at the table in deciding Disney’s next CEO.


The Walt Disney Company
That person’s political position doesn’t matter much to you or me, but it does to various power brokers.
Right now, Disney, the company we all love, is a foosball on the table, and lots of random people are trying to spin the flippers to score a goal.
What Is the Current State of Disney?
Despite that aspect and the lingering concerns regarding Reedy Creek and the stock price, I’m decidedly more optimistic about Disney these days.
A few weeks ago, I discussed what Wall Street wants from Disney.


Photo: History.com
During that conversation, I explained how Bob Iger believes Disney has exited the “problem-solving phase.”
That’s a neutral way of saying that he has cleaned up as much of Chapek’s mess as he can.


Photo: Getty Images
Meanwhile, Iger has also uncovered unexpected solutions with Linear Networks and Disney’s flagging Star India operations.
Disney’s CEO believes he has cracked the math, which should improve the company’s net revenue.


Photo: Wikimedia
While you and I don’t care as much about that, Disney maintains substantially more control over its fate when it’s financially strong.
That’s why the lack of high-quality films in 2023 and 2024 will hurt the company. It relies on the movie-making machine to keep the so-called “flywheel” spinning.


Photo: Disney
I’m bothered about that part of Disney’s brand right now, but it doesn’t concern me anywhere near as much as Disney+ or Linear Networks did a year ago.
Iger has already applied a fix to Disney’s worst problems.


Photo: Chip Somodevilla/Getty Images
Telling better stories should be much easier now that the pandemic and Hollywood strikes have ended.
Frankly, the only worry I’d have about Disney’s creative side is if DTC suddenly suffered more financial losses.


Photo:GETTY IMAGES FOR ESPN
Yes, Disney will eventually convert ESPN to a digital-first service, but that’s a 2025 problem. Iger probably has 18 more months to solve it.
In the short term, Disney appears to have course-corrected, which is a significant relief to fans.
So, the state of Disney as we enter 2024 is significantly better than it was a year ago at this time.


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