Disney Learns Billion Dollar Lesson: ‘They’ve Got to Cut’

After Disney CEO Bob Iger held his earnings call with investors last week, Wall Street generally saw the positives. What wasn’t there to like? Iger announced that Disney Plus had added subscribers and cost-cutting measures earlier this year, saving the Walt Disney Company an additional $2 billion. Iger touted it as a “new era” for Disney. 

And Wall Street responded to Iger as Disney’s stock jumped more than six percent. At the time, it was considered reasonably good news for the Disney company, which sorely needed it. New York Times financial reporter Jim Stewart was impressed, not by Iger’s messages, but by his numbers.

Stewart told CNBC:

Disney is making some progress in an extremely difficult environment. None of the big problems have gone away. The lesson they learned is they’ve got to cut. 

But what was last week and this week brought a fresh new problem for Bob Iger and Disney. Monday morning’s headlines were consumed by the complete disaster that was the opening weekend of The Marvels (2023). The latest release from Marvel Studios set a new record low for a Marvel movie with only $47 million at the box office. This disaster only heightened Iger’s point that Disney should focus on creating less but better content.

Stewart continued:

You have to ask about the whole Marvel franchise and the creative core of the company. It’s not just Marvel, Pixar has been underperforming, and Disney animation has been underperforming. The core of the company is the creative endeavor as Iger has already said. 

Iger has already taken his advice. Disney announced last week that it was delaying a significant portion of its slate for 2024, including the live-action Snow White, Deadpool 3, and Captain America: Brave New World. Disney reported that the delay was due to the SAG-AFTRA strike, but Snow White has been mired in controversy, allowing the film to reset. With these delays, Marvel Studios will only release one film in 2024, Deadpool 3. 

Disney finds itself well-positioned with the actor’s strike now over. It was one of the few streaming services to add subscribers during the strike, and the lack of new content allowed Disney to save billions of dollars. However, Disney is still battling its deep-pocketed competitors for subscribers, including Netflix, Amazon, and Apple. 

But Wall Street investors and Disney are both waiting for the proverbial anvil to drop, that being Disney’s linear cable channels. Bob Iger still has no clear direction on what Disney plans to do with its over-the-air cable channels, including ABC. 

Stewart sees Disney divesting itself of cable to focus more on the pillars of its company: theme parks, streaming, and films. While Disney Parks remained strong, there was a drop-off in attendance at Walt Disney World in Central Florida.

Related: The Sharks Are Circling As Bob Iger Looks for a Way Out

There is also the proxy battle with activist investor Nelson Peltz, who now controls the shares of former Marvel executive Ike Perlmutter. Iger hopes his latest moves will be enough to keep Peltz at bay as he seeks multiple seats on Disney’s Board. But that seems unlikely.

For now, though, Stewart and Wall Street see that Disney has learned its lesson after its billion-dollar failures: the only way forward is to cut. It remains to be seen if that will end up working.

We will continue to update this story at Disney Fanatic.