How Did Bob Iger Answer These Questions in 2024?
At the end of 2023, some Wall Street analysts raised a few concerns about The Walt Disney Company’s upcoming year.
These investors wanted to know how Disney would address its most pressing problems.
Photo: Playbuzz.com
So, how did Bob Iger answer these questions in 2024?
The TL:DR is that if this were a test, he’d get an A+. Let’s discuss the specifics.
Will Disney+ Turn a Profit?
As a reminder, I didn’t raise these questions. This is an article I write each year based on early-year questions raised by investors.
The 2025 version of that story probably comes out in a week or so, but we’re looking back today.
Photo: History.com
Here’s the article I put together in 2023 that listed Wall Street’s biggest Disney concerns.
When you read the first four questions, you’ll appreciate just how impressively Disney attacked its gravest issues.
Families Streaming Disney+
For starters, the answer to the question, “Will Disney+ Turn a Profit?” is YES! It’s an emphatic yes at that.
Disney had long claimed that its Direct-to-Consumer (DtC) strategy involved a five-year plan to build a loyal subscriber base.
Photo: English Jargon
On that front, Disney totaled 236.2 million subscribers across its three services at the end of fiscal 2024.
Disney+ led that total with 158.6 million, while Hulu managed an impressive 52 million, and ESPN+ held steady at 25.6 million.
Photo: ESPN
ESPN+ has hovered in that range for six quarters now, while the other two remain on an upward trajectory.
Technically, Disney+ performed even better two years ago, but that happened before Disney focused on profits more than subscribers.
Image: The Wall Street Journal
The results speak for themselves, as DtC lost more than $4 billion in fiscal 2022.
Disney executives devoutly repeated that fiscal 2024 would prove different…and they were right!
Photo: Washington Post
For the most recent years, DtC earned a very modest $143 million, which is couch cushion change for Disney.
However, that’s more than $4 billion better than just two years ago, and Disney projects $1 billion in profits in fiscal 2025.
Photo: skillastics.com
So, again, the answer here is YES!!!
Can Disney Make a Box Office Comeback?
(Photo by VALERIE MACON/AFP via Getty Images)
At the risk of repeating myself – get used to it – this answer is once again YES!!!
Depending on what happens with Moana 2 during the rest of the year, Disney could feasibly claim the top three titles of 2024.
Getty
While some would argue that theatrical box office remains in decline, that criticism doesn’t apply to Disney.
Inside Out 2 became the biggest animated blockbuster ever, and it’s a top ten earner of all time.
Image: Pixar
Deadpool & Wolverine isn’t that far behind it. Those two films alone have grossed more than $3 billion.
Once we factor in Moana 2, which has topped the weekend charts since Thanksgiving, that’s a scintillating trio of films.
MOANA 2 – © 2024 Disney Enterprises, Inc. All Rights Reserved.
Disney had other solid titles as well, but we don’t even need to discuss them here, as you get the point.
Disney made an epic box office comeback in 2024, and the signs point toward a solid 2025 as well.
How Will Disney “Fend Off” Activist Investors?
Photo: Pexel.com
The activist investors in question were Nelson Peltz and Isaac Perlmutter, who had wanted more power at Disney.
Peltz pushed for two seats on Disney’s Board of Directors, with Perlmutter’s Disney shares wielding the voting power.
Source: AP
So, how did Disney fend them off? Well, Disney CEO Bob Iger and his team came up with several plans to persuade investors.
Some of them haven’t borne fruit yet – I’m looking at you, Venu Sports! – but most have.
Venu
In truth, Disney’s 2024 success has probably surpassed anyone in the C-suite’s reasonable expectations for how the year would play out.
In my recent Current State of Disney piece, I summarized Disney’s 2024 accomplishments as:
Photo: Disney clip art
“Disney settled with Florida, agreed to a new deal in Anaheim, resecured its theatrical releases, turned a profit with streaming, found the perfect balance with its linear and streaming, steadied the stock price 30 percent above 2023, won all sorts of Emmy acclaim, confirmed expansion at most Disney parks, and turned back the clock on live sports consumer habits.”
HEIDI GUTMAN/CNBC/NBCU PHOTO BANK/NBCUNIVERSAL/GETTY IMAGES; SLAVEN VLASIC/GETTY IMAGES
So, yeah, it was a big year. But investors didn’t know that when they voted in early April.
Iger persuaded shareholders to vote with him because A) everyone should know what Peltz is by now and B) Disney was getting its house in order.
Photo: restorethemagic.com
Investors trusted Iger to restore the magic, handing Peltz the most lopsided defeat of his career.
Ultimately, Peltz and Perlmutter sold all their shares of Disney stock, which speaks volumes about how dominant Iger’s victory was.
Does Linear Television Still Fit with the New Disney?
Image: The Healthy Mouse
Surprisingly, the answer to this one proved to be yes.
I say surprising because Iger himself had said in the middle of 2023 that Linear Networks might not be core to Disney.
Photo: Variety
In a way, that was the corporate equivalent of the New England Patriots saying they may lose Tom Brady in free agency.
Linear Networks had anchored Disney’s revenue strategy for nearly 30 years, much of it during Iger’s watch.
Bob Iger – 2023 Annual Shareholder Meeting
For him to say that he was ready to move on was a legitimate wow moment.
Once Disney hired a new CFO, Hugh Johnston, Iger asked his charge to examine the issue with free eyes.
Photo: Disney
The savvy Johnston recognized a structural oddity in consumer media consumption.
Right now – and it won’t stay this way forever – there’s a generational age gap that works in Disney’s favor.
Photo: PepsiCo
Basically, if you were raised on Linear Networks, you likely have kept some form of cable package.
Conversely, if you grew up as a second-screen viewer, you stream virtually everything.
Photo:cnet.com
That behavioral schism allows Disney to monetize its still-lucrative Linear Networks before they erode in value.
At a later date, I’m confident Disney’s Linear Networks will dwindle or be sold to a company that may not even exist yet.
Photo: Disney Careers
For now, the current structure has proven ideal for Disney’s short-term and possibly even mid-term plans.
So, the answer here is again!
Who Will Succeed Iger?
Alas, we still don’t have the answer for this final question and may not even have it when I write this article a year from now.
Recently, Disney announced that James Gorman, a current member of the Board of Directors, will become Chairman of the Board in January.
Photo: Disney
Executives stressed that Gorman, not Iger, will choose the next CEO at Disney.
Also, that decision isn’t likely to arrive until 2026. Ergo, there’s no answer coming anytime soon.
Photographer: Hollie Adams/Bloomberg via Getty Images
When there is, Iger won’t be the one making it. And that’s another thing Wall Street wanted.
After all, resentment remains over Iger’s previous succession choice: Bob Chapek.
Photographer: Simon Dawson/Bloomberg via Getty Images
So, investors are right to want Gorman, not Iger, making the final call here.
Still, Disney answered the first four questions with emphatic answers in the affirmative. Disney had a phenomenal year.
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Feature Photo: Deadline
