Which Disney Questions Must Bob Iger Answer in 2024?
We’ve reached the time of the year when everyone looks back and looks forward.
To wit, I have – no joke – scoured through thousands of MickeyBlog articles we published this year to prep for our annual year-end lists.
A respected Yahoo! Finance analyst, Alexandra Canal, is similarly thinking about what the future holds for The Walt Disney Company and its CEO.
Here are the five questions Bob Iger must answer in 2024.
Will Disney+ Turn a Profit?
Technically, we can expand this to the entire Direct-to-Consumer (DTC) division at Disney.
You may recall that Wall Street turned on former CEO Bob Chapek after his emotionless announcement that DTC had lost $1.474 billion in three months.
That paces to nearly $6 billion in losses in a fiscal year. Few companies could sustain such high losses…and certainly not Disney.
Since Iger’s return, he has worked to lessen the losses in the DTC division.
During Disney’s most recent quarter, it revealed losses of $420 million. That’s night and day better than the previous year’s $1.474 billion.
Still, we’re talking about losses that pace at nearly $1.7 billion for a year. As a reminder, DTC is supposed to be Disney’s growth business.
Disney has promised DTC will turn a profit by the end of fiscal 2024. Technically, we’re ten weeks into that term.
So, Disney is on the clock to make its DTC division profitable. Iger recently expressed confidence that the company will meet that goal.
Yahoo! questions the likelihood of this optimistic timeline. And you can’t really blame the author.
Thus far, all major streaming services but Netflix have doubled as a boulevard of broken dreams for Wall Street investors.
Disney considers its goal reasonable because it has lowered content spending by $2 billion.
In combination with recent price increases for ESPN+, Hulu, and Disney+, the path is in place for a razor-thin profit by the end of fiscal 2024. Maybe.
Can Disney Make a Box Office Comeback?
Financially, here’s the question that matters the most to Disney over the long haul.
Disney monetizes its entire business operation by creating rewatchable content that audiences love.
Yahoo! points out the obvious about 2023. It was mostly a trainwreck, at least compared to what we expect from Disney.
Other studios would consider 2023 a career year in the same situation, but we hold Disney to higher standards.
Ergo, Iger has played defense throughout 2023 regarding a film calendar that’s mostly of his making.
As a reminder, until New Year’s Eve 2021, Iger’s primary job responsibility at Disney was its content.
When Iger returned less than 11 months later, Chapek hadn’t changed enough to make a difference there.
So, Disney’s 2023 struggles fall squarely on Iger’s shoulders.
The Yahoo! article cites a quote from a financial analyst who states, “”I don’t think the studio is going to be an engine that’s going to help Disney grow for the next 18 months…”
The same individual (correctly) adds: “I don’t think it’s going to get worse, but I don’t think it’s going to get better either.”
That’s the accurate evaluation of Disney in the aftermath of the Hollywood strikes.
The studio was forced to delay many productions. As such, Disney will only release a handful of titles in 2024.
On the bright side, a recent Fandango poll suggests that Deadpool 3 is the most anticipated movie of 2024.
How Will Disney “Fend Off” Activist Investors?
I’ve used my own words there, but I think Canal’s description is more interesting: “How will Iger fend off Peltz and Trian?”
Perhaps I’m reading too much into that, but the author states it as a matter of how, not if.
That’s something you do when you’re confident about the outcome.
Specifically, Disney has witnessed the unwelcome return of activist investor Nelson Peltz and his buddy, recently fired Marvel CEO Isaac Perlmutter.
The duo recently dragged former would-be Iger successor Jay Rasulo out of mothballs in an attempt to stick him on Disney’s Board of Directors.
On the one hand, we need proof of life on Rasulo. That dude dropped off the face of the planet.
On the other hand, this move shows that Peltz recognized his previous request for more than two seats was unreasonable.
Also, the billionaire dropped the suggestion for his son to be one of Disney’s board members.
In short, Peltz is already making concessions because Bob Iger outflanked him again.
The Yahoo! evaluation acknowledges this reality, but it describes Rasulo as the second Disney executive to join Peltz’s side.
That’s like describing Smithers joining Mr. Burns as a corporate shocker since Rasulo was Perlmutter’s choice to be Disney CEO. Rasulo lost and then quit.
Still, Iger will face plenty of intrigue during the first quarter of 2023 as Peltz’s wheel of chaos spins.
Does Linear Television Still Fit with the New Disney?
For most of 2023, Wall Street often expressed curiosity about when, not if, Disney would sell some of its Linear Networks.
At one point, Iger even expressly told would-be purchasers to make him offers for Disney’s cable networks and possibly even ABC.
Then, during the New York Times DealBook Summit last month, Iger emphatically stated that linear networks are “not for sale.”
The positional flip-flop happened so quickly that it gave investors whiplash.
Yahoo! posts a chart of cord-cutting data and questions Iger’s pivot back to Linear Networks.
That’s a fair question, and I’ll admit that I’m curious about it as well.
As I discussed in the annual State of Disney piece, Iger sounds confident about the math.
So, Disney’s plan for a joint linear/digital content machine has satisfied its leadership. Will Wall Street feel the same once it understands the new plan?
Who Will Succeed Iger?
Canal wonders whether one of three internal candidates at Disney could follow Iger as CEO.
The analyst singles out Dana Walden, Alan Bergman, and Josh D’Amaro as the three likeliest successors.
Meanwhile, former options like Thomas O. Staggs and Kevin Mayer have since reunited with Iger as Disney consultants.
So, the same five names continue to be in the pipeline as Disney’s CEO in 2027.
I update the succession power rankings about once a quarter, and I’ll probably do it again over the next few weeks.
My two overriding thoughts on the topic right now are simple, though.
Iger probably won’t announce anything in 2024, barring something unforeseen.
Unless he has a health crisis or the Board of Directors sours on him, he’ll likely spend the entirety of 2024 plotting the company’s course.
Then, he’ll choose and train his replacement in 2025/2026.
Second, the timing isn’t ideal to pick four of those five candidates.
I say this because Bergman and Walden run Disney’s film division, which…didn’t have a great year.
Disney cannot promote either of those candidates in the short term. If it did, it’d face sizable backlash.
Similarly, Staggs and Mayer lead Candle Media, which is currently in financial trouble and seeking refinancing on some loans.
In short, we shouldn’t expect anything to change with Disney succession anytime soon…unless it’s D’Amaro. He’s currently the best-positioned executive.
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Feature Photo: (Charley Gallay / Getty Images for Disney)