Biggest Disney Business Stories of 2023
How would I describe The Walt Disney Company’s 2023 business year?
Imagine if everyone on Wall Street and in Hollywood all lined up to ride Mad Tea Party…for a calendar year. So, yeah.
We have much to discuss in choosing Disney’s biggest business stories of 2023.
Bob Iger Announces He’s Staying
In the Mad Tea Party analogy, Bob Iger would be the cast member pulling the levers and pressing the buttons. He’s the agent of chaos here.
Remarkably, I think that several of these stories will underscore that Iger performed admirably overall in 2023.
Still, the easiest way to think of him over the past year is as the person in the Mad Tea Party ride cart who is spinning the wheel as fast as possible.
Yes, Iger somehow operated the ride AND made it spin. It’s been that kind of year.
Remember that 2023 started with Iger making his triumphant return.
At the time, stories suggested that he had CFO Christine McCarthy to thank for his return.
The financial expert reportedly alerted Disney’s Board of Directors to several alarming decisions by former CEO Bob Chapek.
This bit of justifiable treachery surprised outsiders, as Chapek and McCarthy always seemed like birds of a feather.
I suspect Iger never completely trusted her again afterward for this reason.
Ultimately, McCarthy left Disney in 2023, with Iger choosing her replacement, Hugh Johnston.
While Johnston fits perfectly with Iger’s aspirations, that’s not the part of the story that matters.
The moment that Disney announced McCarthy was leaving, several analysts, including myself, speculated that Iger would soon announce a contract extension.
Sure enough, Iger has confirmed he will stay at Disney through the end of 2026.
Not coincidentally, many of the stories we’re about to discuss will share connective tissue with this one. It’s all Iger at Disney once more.
Nelson Peltz Tries
I’m actually jamming several business stories together with this topic, as much of what Iger did in 2023 functioned as defensive measures.
In 2022, activist investor Nelson Peltz recognized that Bob Chapek was more malleable than Iger ever had been.
Peltz presented himself to Chapek as a potential ally, although Disney’s Board of Directors knew better.
Much of the reason why Iger returned is because the board wanted no part of Peltz, whose representation as a reckless corporate butcher precedes him.
When Iger returned, he walked into an activist investor push by Peltz, who demanded a seat on Disney’s Board, an idea the other board members abhorred.
Iger proceeded to cut Disney’s budget and thereby provide investors with an incentive to dismiss Peltz’s request, which they were inclined to do anyway.
The stratagem worked as Peltz accepted defeat and ended his attempt to bully his way onto Disney’s board.
However, Disney performed three rounds of layoffs and fired 7,000 employees.
Aso, the company cut its production budget, choosing to produce fewer films and television series, a choice that will have ripple effects in 2024 and 2025.
Peltz Tries Again…
What did Iger earn for his efforts? Nelson Peltz ended the year the same way he started it. He once again pushed for seats on Disney’s Board.
Yes, the activist investor returned, and he angled for even more sway this time.
Per Peltz’s own statements, he wanted “more than” two seats, which indicates at least three, thereby tripling his demands from earlier in the year.
This matter remains unsettled, but it ties back to the CFO story I just mentioned.
The billionaire agitator for Pepsi was…Nelson Peltz. Also, we can learn a lot about Peltz’s big ideas for improvement with a single fact.
Peltz wanted PepsiCo to spin off Pepsi. That’s Disney’s likely fate if Peltz earns multiple board seats.
He’ll push to break Disney assets like Marvel, Fox, Lucasfilm, and Pixar into standalone businesses rather than one unit.
The sole purpose of such a strategy isn’t to improve a business. It’s to make a (slightly) bigger profit at the expense of everything a company has built.
You can understand why Iger and Disney’s Board don’t want anything to do with Peltz.
This matter appears likely to resolve itself at the annual Disney Shareholder Meeting in March or April.
Disney Loses Reedy Creek
This particular topic appears to slot into several different stories in our end-of-year coverage.
However, the whole affair has undoubtedly impacted Disney from a business perspective.
As you know, Disney found itself in a brouhaha with Ron DeSantis, the governor of Florida.
At his behest, Florida politicians stripped Disney of its ability to self-govern in the former Reedy Creek Improvement District.
Disney utilized an aspect of the original 1967 agreement to provide itself with complete autonomy anyway.
So, the same politicians vote to rewrite the state laws to strip Disney of those powers.
Disney sued, DeSantis countersued, and the matter is now circling through the court system.
From a business perspective, Walt Disney World could theoretically suffer a bit financially, although that concern is largely overblown.
We’re talking about a fractional amount for a business that earns billions of dollars.
The bigger worry for Disney is that the DeSantis smear campaign has caused some fans to think less of the Mouse, even though it did nothing wrong here.
Troll farms often overwhelm social media comment sections with anti-Disney rhetoric.
Of course, the counterpoint is that some casual Disney fans have grown more loyal to the brand.
Seeing Disney placed on trial has solidified its support in some circles.
Disney Buys Hulu
Let’s employ Occam’s Razor here. The biggest business stories of the year are the ones that involve unimaginably large payments.
For this reason, we must include Disney’s decision to purchase Comcast’s one-third ownership stake in Hulu.
When Disney acquired the Fox assets in 2019, it gained de facto authority over Hulu’s fate.
Comcast agreeably allowed Disney to run Hulu as if it owned the entire streaming service, a decision the former company may regret now.
Comcast had expected Disney to boost the value far beyond its 2019 estimated worth.
Disney has claimed in negotiations and arbitration that this didn’t happen. So, it has paid Comcast the smallest agreed-upon amount.
Late in 2023, Disney wrote Comcast a check for $8.6 billion. The two parties remain in arbitration, though.
A group may yet decide that Hulu’s value is even higher. Should that happen, Disney wins in that it’s the sole owner of the company.
However, Disney must also pay Comcast one-third of whatever the new market valuation is.
In 2023, we covered the larger part of this business story. We might add an addendum in 2024, though.
Miscellaneous Business Stories
In culling the list of potential nominees for this year’s Biggest Business Stories, I unearthed more possibilities than any other topic during our annual end-of-year coverage.
Here are a few others that merit a quick mention.
Disney entered into negotiations with Mukesh Ambani’s Reliance to form a joint venture.
Disney’s Star India would join Reliance in a new offering that is arguably the biggest media conglomerate in South Asia.
A celebration was in order for Disney, as the company turned 100.
Several theme parks added new attractions and amenities to commemorate the event.
In that manner, theme park visitors will pay (unintentional) tribute to the company’s achievements for many years to come.
I didn’t mention it in the earlier Board discussion, but Disney experienced another executive change.
Mark Parker, formerly of Nike, replaced Susan Arnold as the Chairman of the Board at Disney.
Circling back to the DeSantis feud, one tangible long-term business aspect is that Iger ended plans to develop a new Disney headquarters in Lake Nona, Florida.
Even More Disney Business Stories of Note
Another story I tracked that lacks hard numbers is the start of Lorcana, a Disney trading card game that is in high demand this holiday season.
Disney is trying to cut into the market share of other card games like Magic The Gathering, and it appears to be working.
On both coasts, Disney managed to negotiate long-term contracts with many cast members. The news wasn’t so good in Hollywood, though.
The dual writer and actor strikes delayed many productions, which will cause collateral damage to Disney’s 2024/2025 schedule.
Also, Iger recklessly made some ill-considered comments about less wealthy people that will get brought up indefinitely.
Oh, and Disney got into gambling. Yes, it was such a significant year that the end of a perennial Disney debate only merits a casual mention.
Everyone may have boarded Mad Tea Party in 2023, but I can’t shake the vibe that only Bob Iger really enjoyed it…and even he had his rough moments.
Thanks for visiting MickeyBlog.com! Want to go to Disney? For a FREE quote on your next Disney vacation, please fill out the form below, and one of the agents from MickeyTravels, a Diamond Level Authorized Disney Vacation Planner, will be in touch soon!
Feature Photo: (Charley Gallay / Getty Images for Disney)