Guys, Bob Iger had a lot to talk about Thursday morning from the Allen & Co. Sun Valley Conference — and it wasn’t just about the WGA and SAG-AFTRA strikes.
The former, current, and future Disney CEO (emphasis on “future” considering Wednesday’s contract extension) sat down with CNBC’s David Faber in front of a majestic Idaho backdrop to discuss all the right things and wrong with the company in the current media landscape.
Iger, who replaced his handpicked successor Bob Chapek in November, said he’s staying until 2026 now due to “greater” challenges than his originally planned two-year comeback deal. Chief among the problems Iger identifies are what he calls his company’s “non-growth businesses.”
He’s basically talking about linear television there; Iger is considering selling the ABC broadcast network, Disney’s non-ESPN cable networks and its stations. Or maybe he’ll just have to scrap them.
“Simply getting out of bad businesses at any cost could be the price you pay for limiting management and investor distractions in the long run,” wrote Michael Nathanson, chief media analyst at Moffett-Nathanson Research, in a quick response note to clients. (and obtained from IndieWire) Thursday morning.
ESPN isn’t entirely out of the question: Iger, who has said ESPN will eventually go straight to the consumer (“it’s not long-term but it’s not tomorrow either”), is looking for strategic partners there; he’s even willing to give up some of Disney’s properties in the process.
Just a few breaths away, Iger finally said that Disney will buy Comcast’s one-third stake in Hulu and that there is a “mechanism” in place to determine fair market value for the missing piece. Years ago, the companies determined a minimum value for Hulu of $27.5 billion, making Comcast’s piece worth just over $9 billion. Comcast Wants Something More: Can We Interest You In Some ESPN?
The idea was first raised at the same Allen & Company conference last summer, the annual summer camp for top media executives and their investment banking friends. It has been mostly kept in conversation ever sinceby Puck’s legal writer Bill Cohan. Food for thought.
At CNBC, Iger also said that Disney would be pulling production of Marvel and Star Wars content. He has coped with the company overburdening Marvel employees, in particular, with too much work in TV and streaming, which “diluted the focus and focus” on superhero films. The VFX artists of “Ant-Man and The Wasp: Quantumania” would have co-signed that.
Pixar is another Disney studio that could use a little more of that focus and attention. Maybe it just needs better movies. Maybe Disney needs to extend movie windows, or at least re-educate consumers about movie windows.
Iger said Pixar’s box office woes — such as current underperformer “Elemental” and the previous year’s flop “Lightyear” — may be tied to an expectation caused by the COVID-19 pandemic, at which point Consumers have been trained to expect Pixar movies to stream on Disney+ either exclusively (like “Soul,” “Luke,” and “Turning Red”) or shortly after a theatrical run.
He faced “a few creative blunders”.
“There have been some disappointments,” Iger said. “We wish some of our recent releases had better performance.”
Iger can fix these “creative engines,” Nathanson wrote. He’s done it before: refer to the change at Disney Animation from Iger’s early days as CEO.
“Windowing and being more selective in your content choices are areas of opportunity to drive better creative content and, ultimately, greater profits,” Nathanson wrote. “We don’t see the content engine breakdown here as structural, but fixes take time.”
Iger also wishes the ongoing writers’ strike and the actors’ strike going any minute now would be resolved, like, yesterday.
“It’s very disturbing to me,” Iger said of the WGA that has been on strike for over two months and SAG-AFTRA about to go on strike. “We talked about disruptive forces in this business and all the challenges that we’re facing, the recovery from COVID, that’s ongoing. He hasn’t quite returned. This is the worst time in the world to add to that disruption. I understand the desire of any trade union organization to work on behalf of their members to achieve maximum compensation and be compensated fairly based on the value they provide.”
“We were able, as an industry, to negotiate a great deal with the Directors Guild that reflects the value that filmmakers contribute to this great business,” he continued. “We wanted to do the same thing with the writers and we’d like to do the same thing with the actors. There’s a level of expectation that they have that’s not realistic. And they’re adding to the set of challenges this company is already facing that is, quite frankly, very disruptive.”