Bob Iger Extended Through 2026 as Disney CEO

 by Ray Keating

News

DisneyBizJournal.com

July 12, 2023

 

The Walt Disney Company announced today that the company’s board of directors voted unanimously to extend Bob Iger’s contract as CEO through the end of 2026. That’s a two-year extension on the contract that brought him back to the top spot at Disney.

Mark G. Parker, chairman of The Walt Disney Company, said, “Time and again, Bob has shown an unparalleled ability to successfully transform Disney to drive future growth and financial returns, earning him a reputation as one of the world’s best CEOs. Bob has once again set Disney on the right strategic path for ongoing value creation, and to ensure the successful completion of this transformation while also allowing ample time to position a new CEO for long-term success, the Board determined it is in the best interest of shareholders to extend his tenure, and he has agreed to our request to remain Chief Executive Officer through the end of 2026.”

 

Iger, of course, returned to the Disney CEO position in November 2022, after Bob Chapek, who was Iger’s handpicked successor, was fired.

 

Iger said, “Since my return to Disney just seven months ago, I’ve examined virtually every facet of our businesses to fully understand the tremendous opportunities before us, as well as the challenges we’ve been facing from the broader economic environment and the tectonic shifts in our industry. On my first day back, we began making important and sometimes difficult decisions to address some existing structural and efficiency issues, and despite the challenges, I believe Disney’s long-term future is incredibly bright.” 

 

Recently, Disney has had a string of movies that flopped at the box office, in part due to enormous budgets tied to those films. At the same time, the Disney parks had been thriving, though crowds seemed to thin during the July Fourth holiday.

 

Iger, who is 72, added, “But there is more to accomplish before this transformative work is complete, and because I want to ensure Disney is strongly positioned when my successor takes the helm, I have agreed to the Board’s request to remain CEO for an additional two years. The importance of the succession process cannot be overstated, and as the Board continues to evaluate a highly qualified slate of internal and external candidates, I remain intensely focused on a successful transition.”

 

Iger has his work cut out for him between now and December 31, 2026, to get Disney back on track. Disney’s stock price basically has been flat year to date, but down from its recent high of $113.21 per share as of early February 2023, and closing today at $90.15.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? 

 

Consider books by Ray Keating…

 

• The Pastor Stephen Grant thrillers and mysteries. You can order the latest book in the series – Under the Golden Dome: A Pastor Stephen Grant Novel. Get the signed books here, or paperbacks and Kindle editions right here. AND pre-order For Better, For Worse: A Pastor Stephen Grant Short Story – Kindle editions or signed books.

 

• Order The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist. Kindle editions and paperbacks via Amazon here and signed books here. And don’t forget the first book in this growing series, i.e., The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks at RayKeatingOnline.com or paperbacks, hardcovers and Kindle editions at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel. Signed paperbacks and/or paperbacks, hardcovers and the Kindle edition at Amazon. 

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Behind Enemy Lines: Conservative Communiques from Left-Wing New York  –  signed books  or at  Amazon.

 

•  Free Trade Rocks! 10 Points on International Trade Everyone Should Know is available at  Amazon  in paperback or for the Kindle edition, and signed books at  www.raykeatingonline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Job Cuts at Disney Eliminating Metaverse and Acquisitions Divisions

 by Ray Keating

News

DisneyBizJournal.com

March 28, 2023

 

The process of eliminating positions and cutting jobs at Disney has gotten under way this week. The larger share of staff reductions reportedly will be happening in April, with CEO Bob Iger saying in a company memo that the process of eliminating 7,000 positions will be completed by the start of summer.

Iger wrote in part:

 

“This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions. Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.”

 

Among the casualties, The Wall Street Journal reported that the Metaverse division at Disney set up by former CEO Bob Chapek in February 2022 has been shut down. The Journal noted that the 50 people in the division have been let go, with the division head, Mike White, staying at the company in a yet-to-be-announced position. The Journal also noted that another effort that White was involved in, i.e., setting up a membership division like Amazon Plus, has been terminated.

 

Also, The Hollywood Reporter highlighted some high profile names that have been let go:

 

“Among the notable staffers let go Monday are Jayne Bieber, senior vp production at Freeform/Onyx Collective; Mark Levenstein, head of production and postproduction at Hulu; and Elizabeth Newman, head of Disney’s acquisitions department. Sources note Newman’s entire acquisitions team has been dissolved, while Bieber and Levenstein’s production teams will be folded under Carol Turner, exec vp production at ABC Signature.”

 

Will the Disney theme parks remain untouched? Not likely. Reuters noted, “Josh D’Amaro, chair of Disney Parks, Experiences and Products, sent a memo to theme parks employees in February warning that the profitable division would experience cuts.”

 

__________

 

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? 

 

Consider books by Ray Keating…

 

• The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks at RayKeatingOnline.com or paperbacks, hardcovers and Kindle editions at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel. Signed paperbacks and/or paperbacks, hardcovers and the Kindle edition at Amazon. 

 

• The Pastor Stephen Grant thrillers and mysteries. You can pre-order the latest book in the series – Under the Golden Dome: A Pastor Stephen Grant Novel. Get the signed books here, or paperbacks and Kindle editions right here.

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Behind Enemy Lines: Conservative Communiques from Left-Wing New York  –  signed books  or at  Amazon.

 

•  Free Trade Rocks! 10 Points on International Trade Everyone Should Know is available at  Amazon  in paperback or for the Kindle edition, and signed books at  www.raykeatingonline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Iger’s First Post-Chapek Earnings Call Amidst Assorted Challenges

 by Ray Keating

News/Analysis

DisneyBizJournal.com

February 7, 2023

 

The Walt Disney Company’s earnings report and call for the quarter that ended in December of last year comes tomorrow (February 8) in the midst of a flurry of activity by and targeted at the company.

 

Of course, this is the first earnings call in the Iger II-post-Chapek period. Although, the quarter being reported covered both Chapek and Iger in the CEO driver’s seat, and Iger will be providing some forward-looking guidance.

As for the flurry of activity, there’s Nelson Peltz vying for a seat on the Disney board. Peltz’s Trian Partners has accumulated about $1 billion worth of Disney stock. But Trian’s campaign to get Peltz or his son a seat is opposed by the current Disney board. While Peltz has some points, there seems to be little excitement about his board campaign other than from Peltz.

 

Iger has challenges even beyond contributing to the search for his own successor. In a February 2 letter to shareholders, the Disney Board noted, “The Board is overseeing important strategic changes that our CEO Bob Iger is executing, such as putting more decision-making into the creative teams, implementing a cost reduction plan, prioritizing streaming profitability and improving the guest experience in our parks.” Cuts and restructuring promise to be painful, with the hope, of course, that the company is better positioned going forward. 

 

At the same time, Iger needs to deal with improving the experience of customers (or guests) at the parks, even as members of a key Walt Disney World union just overwhelmingly voted down a contract. 

 

Oh yes, and there are those uncertainties about whether or not the U.S. will slip back into recession in 2023.

 

For good measure, Florida state legislators are just about to fulfill Governor Ron DeSantis’s attack on Disney by turning over control of the Reedy Creek Improvement District, an entity that basically has allowed Disney to self-govern the land upon which Disney World sits since 1967, to a board selected by the governor, with approval from the state senate. That inevitably will slow development down and raise costs for Disney, and depending upon who sits on the board, could create additional headaches for the company.

 

Also, on the streaming front, The New York Times has reported, “Analysts polled by FactSet estimate that Disney+ will have 163 million subscribers, a slight erosion from the previous quarter.” However, as widely noted, the top focus across the streaming industry now has become profitability, with the question being which streaming platforms are dealing with costs so as to provide shareholders and consumers benefits now and into the future, and which ones are miscalculating due to short-run worries.

 

And as for Disney’s movie business, it’s a mixed story. There’s good news, of course, including the box office results from Avatar: The Way of Water, along with the company receiving 23 Academy Award nominations. However, Pixar is now floundering, and the Marvel superhero franchise has been seeing real chinks in the armor. While I expect Guardians of the Galaxy Vol. 3, coming in May 2023, to be a hit, there are obvious questions about Ant-Man and the Wasp: Quantumania (February 17) and The Marvels (July 28).

 

Much is expected from CEO Bob Iger’s first earnings call since returning, and he will need to ace it. Stay tuned.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? Keating also is a Disney shareholder.

 

Consider books by Ray Keating…

 

• The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks at RayKeatingOnline.com or paperbacks, hardcovers and Kindle editions at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel. Signed paperbacks and/or paperbacks, hardcovers and the Kindle edition at Amazon. 

 

• The Pastor Stephen Grant thrillers and mysteries. The latest in the series is Persecution: A Pastor Stephen Grant Novel. Get the signed books here, or paperbacks and Kindle editions right here.

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Behind Enemy Lines: Conservative Communiques from Left-Wing New York  –  signed books  or at  Amazon.

 

•  Free Trade Rocks! 10 Points on International Trade Everyone Should Know is available at  Amazon  in paperback or for the Kindle edition, and signed books at  www.raykeatingonline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Disney and Earnings Expectations

 by Ray Keating

Analysis

DisneyBizJournal.com

February 2, 2023

 

The Walt Disney Company will release its next earnings report for the quarter ended in December 2022 after the stock market closes on Wednesday, February 8, 2023.

 

Whether it be Disney or another publicly traded company, people often are baffled with how a company’s stock trades after earnings are announced. So, it’s important to understand what a company’s stock price reflects or captures. I explained it this way in my book The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist: 

 

[S]tock prices reflect the level of confidence in the decisions being made for the business. This provides information to current investors, to those considering investment, and to the company board in terms of management compensation being tied to performance. Indeed, this is why top management’s compensation at a company often is tied, in part, to stock options. A stock option is the right to buy a certain number of shares of a corporation at a particular price. So, if the company performs well and the stock price rises, the options will be valuable, and vice versa if the company and stock price perform poorly.

     So, the stock price is tied to the future performance – that is, earnings or cash flow – of that particular company. Of course, all kinds of factors – both internal and external to the firm – can and will affect stock prices, and expectations regarding such factors can change, sometimes quite quickly, and will differ among market participants.

 

When talking about future earnings or cash flow, expectations naturally matter in terms of a stock’s price. So, when an earnings report, and the related earnings call with top management, align with prior market expectations, the price of the stock will be little affected. And if the earnings report “beats expectations,” the stock price will rise accordingly, and in contrast, when earnings fall short of expectations, the price will fall.

 

What do market expectations look like for Disney heading into the company’s earnings report and call next week? 

 

Zacks Equity Research reports the following in a piece at Yahoo! Finance:

 

• “This entertainment company is expected to post quarterly earnings of $0.69 per share in its upcoming report, which represents a year-over-year change of -34.9%. Revenues are expected to be $23.33 billion, up 6.9% from the year-ago quarter.”

 

• “The consensus EPS estimate for the quarter has been revised 8.3% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.”

 

• “For Disney, the Most Accurate Estimate [i.e., ‘a more recent version of the Zacks Consensus EPS estimate’ with the idea being ‘that analysts revising their estimates right before an earnings release have the latest information’] is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects… On the other hand, the stock currently carries a Zacks Rank of #4. So, this combination makes it difficult to conclusively predict that Disney will beat the consensus EPS estimate.”

 

A great deal has happened since Disney’s last earnings release on November 8, including, of course, CEO Bob Chapek being fired on November 21, with Bob Iger returning to that role.

Source: Google

 

As noted in the above chart, Disney’s stock price stood at $99.90 on November 8, sank to $84.17 on December 28, and closed at $109.39 on February 1, 2023.

 

In coming days, DisneyBizJournal will look at various other factors in play influencing Disney and its stock.

 

__________

 

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? 

 

Consider books by Ray Keating…

 

• The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks at RayKeatingOnline.com or paperbacks, hardcovers and Kindle editions at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel. Signed paperbacks and/or paperbacks, hardcovers and the Kindle edition at Amazon. 

 

• The Pastor Stephen Grant thrillers and mysteries. The latest in the series is Persecution: A Pastor Stephen Grant Novel. Get the signed books here, or paperbacks and Kindle editions right here.

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Behind Enemy Lines: Conservative Communiques from Left-Wing New York  –  signed books  or at  Amazon.

 

•  Free Trade Rocks! 10 Points on International Trade Everyone Should Know is available at  Amazon  in paperback or for the Kindle edition, and signed books at  www.raykeatingonline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Disney Board’s Wild Ride Might Just Be Getting Started

 by Ray Keating

Analysis

DisneyBizJournal.com

January 13, 2023

 

For The Walt Disney Company, CEO Bob Iger, and the Disney board, this past week might have seemed like “Mr. Toad’s Wild Ride” – skidding and careening from one thing to the next. But unlike the classic ride at Disneyland, it’s not exactly clear how, where and when the action will end for the Disney board.

On Wednesday, January 11, Mark Parker, the executive chairman at Nike and a Disney director since 2016, was named chairman of Disney, as the current chairwoman, Susan Arnold, is reaching the 15-year term limit under Disney’s board policies. Parker’s time as chairman would start after the Disney 2023 annual stockholder meeting, that is, if he is re-elected to the board. No date has been set for the 2023 shareholder meeting, but it usually takes place in March.

 

Disney also announced that Parker would be working with Iger to find and name the next Disney CEO. It was noted in a Disney statement, “Mr. Parker will also chair a newly created Succession Planning Committee of the Board, which will advise the Board on CEO succession planning, including review of internal and external candidates.”

 

Regarding Iger’s job, it was pointed out in the company statement: “Mr. Iger’s mandate is to use his two-year term and depth of experience in the industry to adapt the business model for the shifting media landscape, rebalancing investment with revenue opportunity while bringing a renewed focus on the creative talent that has made The Walt Disney Company the envy of the industry. Mr. Iger has already taken decisive steps to realign content creation and distribution, and reposition Disney’s streaming platforms and linear broadcast and cable networks for enhanced profitability for the Company.”

 

The Wall Street Journal noted that Parker and Iger “have a close professional relationship.” Also, various reports noted that Parker played a role in convincing Arnold that Bob Chapek had to go as Disney CEO, and that Parker had been considered as an interim CEO.

 

It’s important to keep in mind the roles that CEOs and board leaders play. The chairman of the board leads (and is elected by) a company’s board of directors, with the board protecting the interests of shareholders. Among a board’s duties are hiring, evaluating and, if needed, firing the CEO. The CEO is often the public face of a company, and the CEO’s duties include making key decisions regarding the company’s operations, such as those related to strategy, operations and managing resources, and corporate culture. The board chairman and CEO work closely together, or at least, they should.

 

Given that Iger is 0-for-1 on selecting a successor – Bob Chapek was his man – many might find the emphasis on Parker’s role encouraging in selecting the next CEO after Iger’s two-year contract is up.

 

In the same statement, Disney also reacted to Trian Group’s nomination of activist investor Nelson Peltz (Trian is Peltz’s hedge fund) to the board: “The Walt Disney Company remains open to constructive engagement and ideas that help drive shareholder value. While senior leadership of The Walt Disney Company and its Board of Directors have engaged with Mr. Peltz numerous times over the last few months, the Board does not endorse the Trian Group nominee, and recommends that shareholders not support its nominee, and instead vote FOR all the Company’s nominees…”

 

On Wednesday night, January 11, Peltz and his fund, which reportedly has a $900 million stake in the House of Mouse, responded to Disney. As reported by The Wall Street Journal, “They argued Disney has been hobbled by poor succession planning, “over the top” compensation, mismanagement of costs and flawed strategy. They criticized Disney for using its theme-parks revenue to subsidize its streaming losses and said Disney’s acquisition of the 21st Century Fox Inc. assets put Disney in an unhealthy financial state.” 

 

Peltz also reportedly believes that Parker and Iger “are too friendly for Mr. Parker to be truly objective.” 

 

Of course, in reality, a company again would want their CEO and board chairman to be likeminded on most fronts, including when picking the next CEO.

 

CNBC reported that Trian is asserting that it’s not interested in causing trouble for Disney, which already is under challenging circumstances, given the booting of Chapek and the return of Iger in November, stock price woes, and recession worries. CNBC noted: “Trian also said it doesn’t want to replace Bob Iger as chief executive. Instead, Trian said, it wants to work with Iger to ensure a successful CEO transition within the next two years. ‘Trian’s objective is to create sustainable, long-term value at Disney by working WITH Bob Iger and the Disney Board,’ the firm said. ‘We recognize that Disney is undergoing a period of significant change and we are NOT trying to create additional instability.’”

 

For good measure, The Hollywood Reporter noted: “The activist investor’s Trian also specified that it is not looking to oust Iger or spin off assets like ESPN but that the fund is for ‘ensuring successful CEO succession within 2 years,’ meaning that it is looking for Iger to leave that role at that time.”

 

In reality, though, it’s hard to imagine how Peltz’s bid for a board seat could make things smoother for Disney, at least in the near term. As the Journal pointed out, “Disney’s failure to persuade Mr. Peltz that the company is on the right track means that Mr. Iger faces a rockier road ahead in his first year back atop Disney, which already includes challenges such as a potential recession, a prolonged stock price slump, rising costs for content, potential layoffs and stiff competition in the streaming video business.”

 

At the same time, many of Peltz’s concerns carry legitimacy. The New York Times summed up Peltz’s agenda this way: “Mr. Peltz, who is known for putting a magnifying glass on costs, wants Disney to revamp its streaming business, refocus on profit growth, reinstate its dividend and clean up the company’s messy succession planning.” Well, I’m not sure there are many shareholders who would disagree with various points raised by Peltz. Therefore, while Disney is pushing to not have Peltz on the board, his massive investment in the company and some of his concerns cannot be ignored. 

 

__________

 

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? 

 

Consider books by Ray Keating…

 

• The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks at RayKeatingOnline.com or paperbacks, hardcovers and Kindle editions at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel. Signed paperbacks and/or paperbacks, hardcovers and the Kindle edition at Amazon. 

 

• The Pastor Stephen Grant thrillers and mysteries. The latest in the series is Persecution: A Pastor Stephen Grant Novel. Get the signed books here, or paperbacks and Kindle editions right here.

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Behind Enemy Lines: Conservative Communiques from Left-Wing New York  –  signed books  or at  Amazon.

 

•  Free Trade Rocks! 10 Points on International Trade Everyone Should Know is available at  Amazon  in paperback or for the Kindle edition, and signed books at  www.raykeatingonline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.