When Disney CEO Bob Iger returned last year, he knew the job would be significant; he didn’t know how big. After ten months on the job, the problems facing the Walt Disney Company continue to grow by the minute, and even Iger admitted last month that the issues were “greater than he anticipated.” And that was before Charter Communications decided to blow up the current cable model and allow customers to use Disney as their punching bag.
But that is just one of the many issues the Walt Disney Company faces. Iger needs to come up with some answers quickly before Disney stock goes even lower and institutional investors and Wall Street flee the once-safe confines of Disney stock.
What’s Disney Up Against?
Disney is currently facing headwinds on every front. Iger has been forced into battles to protect every aspect of Disney’s business model. The fight with Spectrum has been brewing for decades. Disney’s television division has been steadily losing viewership and revenue as cable customers have fled to streaming services. Spectrum saw this coming years ago and has been preparing for this fight, hoping to offer its customers an a-la-carte style of television that would allow them to forgo expensive sports channels like Disney-owned ESPN.
Disney’s movie division is facing a three-pronged attack: writer’s strike, actor’s strike, and sagging box office returns. After the writers went on strike in May, the actors joined them in July, shutting down all production and forcing Disney to reconsider its entire release schedule for the remainder of the year. Disney will lose over $1 billion on its box office returns for the second year.
And then there are the theme parks, which are generally cash cows for Disney. While the parks still generate profit, Walt Disney World saw declining attendance over the summer. Iger claimed it was the hot Florida summer, but the feud with Florida Governor Ron DeSantis could keep people away. Disney, the Governor, and the Central Florida Tourism Oversight District are locked in a legal death match that shows no sign of slowing down while draining money from Disney’s coffers.
What’s Iger to Do?
There are no easy solutions for Iger, which is why he makes the big bucks. Iger has admitted that the over-the-air cable companies aren’t central to Disney’s business model. But ESPN is. The World-Wide Leader in Sports is still a massive profit engine, and now that ESPN/Disney is getting into gambling, that money will only grow.
If Iger and Disney have learned anything this weekend, it should be that you don’t take away people’s football. Spectrum lost ESPN during a college football game, and the audience lost it. ESPN has the rights to hundreds of college football games every week and to the NFL on Monday Night. People will pay for football. Taking ESPN to a streaming-only model could work for Disney and eliminate the need to deal with these pesky cable companies.
Disney’s movie profits are relying on a Wish, literally. Disney hopes that Wish (2023) will bring back the movie magic; so far, all reviews have been positive. And while Iger started as a punching bag during the dual strikes, he has since come out with a more conciliatory tone. He could, in theory, play a significant role in ending this, but that would mean cutting into Disney’s non-existent streaming profits from Disney Plus and Hulu. But the longer this continues, the longer Disney will be without new programming and movies for an audience that won’t stand for old shows and movies. Ending the strikes is the only way.
As for Disney World’s problems, the feud with Florida Gov Ron DeSantis isn’t going anywhere. Disney’s best hope is that a new governor takes over Florida in 2027 and doesn’t have the stomach for a longer legal battle with the state’s largest employer. But this is a battle that Disney can’t back down from. Walt Disney World’s governing body and the Parks’ future are at stake. At some point, Disney will be in front of the Supreme Court, arguing for its First Amendment Rights and over the Contract Clause of the Constitution.
Disney’s Chief Executive, Bob Iger, has to fix these problems. He must stabilize Disney’s stock to calm investors, return viewers to Disney Plus, and return guests to the parks. The choices ahead will be difficult for Iger, but we know that he can’t blame this on former Disney CEO Bob Chapek.
We will continue to update this story at Disney Fanatic.
