How Did Disney Resolve Its Worst 2024 Problems?
We’ve reached that point on the annual calendar where everyone posts their bold predictions for the year to come.
Generally, these predictions aren’t based in reality and are along the lines of “Humanity will set foot on the Sun” in terms of ridiculousness.
Photo: Disney
Then, we have seasoned people like Bank of America Securities analyst Jessica Reif Ehrlich.
She took a more measured approach in honestly evaluating The Walt Disney Company’s pressing issues at the start of last year.
Photo: Disney
Ehrlich listed the five concerns Disney faced as it entered a turbulent 2024.
So, how did Disney resolve its worst 2024 problems?
Problem #1 – The High Cost of Hulu
I realized a lot happened in 2024, especially with Disney streaming and especially Hulu.
I’d understand if you’ve forgotten that Disney had a Hulu problem at the start of last year.
Photo: Disney+
As a reminder, when Disney acquired Fox’s assets, it gained controlling interest in Hulu.
However, Comcast still owned one-third of the business. Knowing it didn’t have the power, Comcast ceded all control to Disney.
Disney/Comcast/Hulu
In exchange, Disney promised to pay Comcast for its one-third share of Hulu.
The catch was that Disney would pay Comcast at least $8.1 billion for its piece of Hulu.
Photo: Disney+
According to the terms, Comcast would receive the market value five years after the transaction occurred.
Ehrlich wondered 1) how much more Disney would have to pay and 2) whether Hulu would justify the financial outlay.
Hulu banners in Disney’s Hollywood Studios
A funny thing happened with part one of this story. Comcast and Disney, two companies who hate each other, couldn’t come to terms.
Instead, Disney paid the minimum amount of $8.1 billion and claimed that was all it owed.
Photo: THIERRY CHESNOT/GETTY IMAGES
Comcast disagrees and believes Disney should pay several billion more.
This part of the story hasn’t resolved itself yet. Instead, Disney seems to take glee in stretching out the matter in arbitration.
Image Credit: Disney
Did I mention the two companies hate each other? As for the Hulu integration, it’s been masterfully successful.
A quick look at the Nielsen streaming charts will tell the story. Several of the most-streamed programs are on Hulu.
Photo: Disney
Once Disney+ added the Hulu tile, viewer totals for Hulu programming absolutely spiked.
So, Disney’s Hulu strategy is working…but it may yet cost the company a few billion dollars more. Comcast wants its money.
Problem #2: ESPN Finances
At the start of 2024, Disney sought potential investors and co-owners for ESPN.
I was one of the people in this camp, as I knew discussions were ongoing between Disney and several deep-pocketed businesses.
ESPN
The prevailing belief a year ago was that Disney couldn’t afford to pay for all its upcoming sports licensing deals.
Disney had recently failed in its attempt to win NFL Sunday Ticket rights and streaming rights for IPL cricket.
Photo: Disney
With the NBA renegotiations impending, the writing was on the wall that ESPN couldn’t compete with trillion-dollar companies and mega-billionaires.
However, ESPN proved its mettle in 2024 by having a stunningly resurgent year.
Photo: ESPN
As I’ve written in a different article, everything went right for ESPN last year, thanks to the renewed popularity of live sports.
The Caitlin Clark phenomenon definitely played a factor, as did the NFL earning ratings not since the Moon Landing in 1969.
Photo: Jeffrey Becker/USA TODAYSports/NPSTrans/troppic
ESPN officials cleverly locked up several college sports rights into the 2030s and did what its competitor, Warner Bros. Discovery (WBD), couldn’t in retaining NBA rights.
While this financial problem remains on the periphery, ESPN is no longer actively taking bids for company stakes.
Photo: ESPN
Disney has unearthed several viable strategies to keep ESPN financially strong as it converts fully to streaming in 2025.
Problem #3 – Renewing NBA Rights
Heh, this will teach me not to read ahead, as I just spoiled this solution two paragraphs ago.
With the NBA’s rights fees up for grabs, Wall Street anticipated a feeding frenzy among companies like Google, Amazon, and Apple.
NBA
This expectation proved correct, as Amazon swooped in and snagged the bidding rights previously held by WBD.
Had Google or Apple taken a crack at Disney’s rights, they could have done the same.
Photo: ESPN
Wisely, Disney never allowed that to happen, securing its NBA licensing renewal during the exclusive negotiating window.
Because WBD did not, it took a quarter write-down of *checks notes* $11 billion.
Photo: TNT
Headlines referred to the write-down as $9.1 billion, which somehow undersold the unprecedented, devastating nature of this mistake.
So, yes, Disney’s securing its NBA rights proved vitally important, even though NBA ratings are currently in decline.
Problem #4 – Reinvigorate the Creative Engines
The Disney Flywheel wasn’t exactly flying in 2023.
While some films performed solidly, Disney suffered several high-profile bombs like Indiana Jones and the Dial of Destiny, The Marvels, and Wish.
Photo: Disney/The Nerdy
While the television side, especially Hulu content and Abbott Elementary, was performing well, Disney needed hit movies.
Obviously, we know that happened in 2024, as the company released the top three films of the year.
Hulu/Disney+
With Inside Out 2, Deadpool & Wolverine, and Moana 2 all reaching the $1 billion mark, Disney is back in business.
However, everything could change if the company suffers through another few high-profile misses.
Image: Pixar
So, Disney’s primary concern here is making money, but the 1A goal is to create great films.
We’ve witnessed with the Moana phenomenon how much a film can benefit from positive word-of-mouth.
Photo: Disney
People have streamed Moana a billion times. Not coincidentally, Moana 2 earned $1 billion.
Problem #5 – CEO Succession
Here’s the TBD on the list. Disney’s next CEO is to be determined…in 2026.
While I don’t think it’ll take that long, that’s Disney’s stated timeline for when it’ll announce Bob Iger’s successor as CEO.
Photo: Kevork Djansezian/Getty Images
Disney reset the timeline from the expected 2024 announcement due to unforeseen circumstances.
Disney’s then-Chairman of the Board of Directors, Mark Parker, decided to return to his roots as a Nike executive.
Photo: Disney
So, Disney has replaced Parker with its new Chairman, James Gorman.
Since Gorman only arrived at Disney 14 months ago, he needs more time to familiarize himself with the candidates.
Photo: Disney
Thus, we don’t have an answer to this particular problem yet, and it’s not really a problem anyway.
Disney just had its best year since 2019. Iger’s proven he’s still got the magic in running Disney.
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!
