Disney at 100: Bob Iger’s Problems, Stocks, Subscriptions, and Strikes

This year, Disney has been devoid of the enchantment.

The corporation commemorated its 100th anniversary last month, and there was much to be happy about. With a market valuation of more than $150 billion, the corporation has expanded over the past century to become one of the biggest media and entertainment publicly traded companies worldwide.

However, the House of Mouse’s future is in jeopardy due to several issues, including an unprofitable streaming business, an ongoing actors’ strike, dwindling attendance at Disney World Resort in central Florida, legal disputes with Florida Gov. Ron DeSantis, the Republican candidate for president, and an unclear CEO succession plan.

Disney Stocks

At roughly $84 per share, Disney’s stock is at its lowest point in almost a decade. It has decreased by 3% since the beginning of the year and by 8% since CEO Bob Iger took the reins in November of last year. Look at some of Disney’s competitors: Comcast’s stock has increased by more than 18% this year Warner Bros. Discovery, has seen a 22% increase.

Like its rivals, Disney is facing an unpredictable media landscape as consumers increasingly eschew traditional TV for unaffiliated entertainment platforms like YouTube and TikTok. However, among other problems, Disney has been particularly badly impacted by some significant film office flops and concerns about how it would replace its dwindling cash cow, ESPN.

On Wednesday afternoon, the business released its quarterly earnings. While sales were slightly below forecast, earnings were higher than anticipated. The business reduced its streaming losses and added 7 million new core Disney+ members. However, Iger declared more drastic expense reductions for the business.

Hugh Johnston, the CFO of PepsiCo, will replace longtime Disney executive Christine McCarthy as Disney’s CFO, the company announced on Monday. McCarthy left the position in May. A request for comment from Disney was not answered. The company is currently in a quiet period before its earnings report.

Linear TV Assets

It’s no secret that the linear TV industry is having difficulties, and almost all other US legacy media firms are similarly impacted by Disney’s troubles with traditional TV. Disney’s revenue from linear television fell 7% in the most recent quarter as compared to the same period the previous year.

However, Iger has made suggestions about a strategy to raise money through a possible sale of Disney’s linear assets, which include National Geographic, ABC, Disney Channel, and FX.

“While linear remains highly profitable for Disney today, the trends being fueled by cord-cutting are unmistakable,” Iger said in August. “As I’ve stated before, we’re thinking expansively and considering a variety of strategic options.”

Future Price Hikes For Subscriptions?

Disney’s strategy to shift its operations to the streaming era has yielded mixed results. Disney increased the cost of its ad-free Disney+ subscription to $13.99 per month in October, but it maintained the $7.99 monthly cost of its advertising tier.

“Spinning up is the streaming advertising market. It’s more robust than the linear television advertising business,” Iger stated in August during Disney’s third-quarter results call. Disney has stated that it expects Disney+ to turn a profit by the end of 2024, but the price increase comes as the streaming service is still losing money.

Disney lost streaming customers in the US and Canada the previous quarter, despite a 2% increase in overseas signups. This could be a significant roadblock to the company’s plans.