Walt Disney Co. CEO Bob Iger told employees of the company that his second turn as CEO has been more challenging than he anticipated, but that he is nonetheless “optimistic” about the entertainment giant’s future.
“I knew that there were myriad challenges that I would face coming back,” Iger said at an employee town hall Tuesday afternoon. “I won’t say that it was easy, but I’ve never second guessed the decision to come back, and being back still feels great.”
The veteran executive went on to say that “I had spent the year with the team fixing a lot of things … but I feel that we’ve just emerged from a period of a lot of fixing to one of building again, and I can tell you building is a lot more fun than fixing.”
He added that, with the fixing behind him and the building ahead, he has high hopes for what’s to come.
“I talk about optimism being an extraordinarily important trait of a leader, because no one wants to follow a pessimist,” Iger said. “But I also believe that hopeless optimism doesn’t do anybody any good. I have, I think, real reason — and we have real reason as Disney — to be optimists, and it starts with the fact that we’re Disney. And Disney, as you know, is a brand unto itself, but it’s also an umbrella company that houses many assets and many great brands. So, reason to be optimistic No. 1 is that.”
Iger’s town hall came one year after he hosted a similar event for Disney employees, just weeks after his surprise return to the company as CEO. This time around, the event was held in New York (Iger is scheduled to speak at the New York Times Dealbook Conference on Wednesday) at the New Amsterdam Theatre (home to the Broadway show Aladdin) and moderated by ABC News anchor David Muir.
Since last year’s event, the company has been undergoing a dramatic transformation. Iger restructured the company into three divisions: Disney Entertainment, Sports (including ESPN), and Experiences and Products; and he launched a major cost-cutting initiative, laying off some 7,000 employees to slim down the company’s structure.
At ESPN, some high-profile talent was shown the door, and at ABC News a wave of top executives were let go. The “metaverse” division created by Bob Chapek was similarly shuttered.
Iger disclosed in the company’s last earnings report that Disney was on track to hit $7.5 billion in cost reductions, $2 billion higher than previously anticipated.
All of Iger’s priorities came up during the town hall, in which Iger was joined by entertainment co-chairs Dana Walden and Alan Bergman, ESPN chief Jimmy Pitaro and experiences chairman Josh D’Amaro.
With regard to Disney’s linear TV assets, Iger said that he regretted how a CNBC interview in July was interpreted, telling Muir that he did not think “everyone would run with a story that everything is being sold, which is not the case,” per a source.
Iger said that no decisions had been made on the future of the company’s linear entertainment assets, but added that “we’re trying to migrate these businesses onto the new business model.
“As is the case with all of our businesses, which we must do in order to basically serve shareholders, is we look at the future of all of our business with an eye toward, ‘Are these businesses going to grow?’” Iger added. “Will they stay the same or will they possibly decrease in value? And if so, what should we do about it?”
Walden added that increasingly the company is leaning into programming and strategy that sees the linear networks complementing the company’s streaming portfolio.
“What we’ve discovered is that our linear channels are very deeply embedded in our streaming strategy,” Walden said. “They want to watch live shows, sports, live events — they want to watch them in time period, and the place you can do that, for the most part, is on linear channels … The notion of a communal event still exists largely on linear.”
She cited The Golden Bachelor as an example of how that strategy can be implemented:
“It launches on ABC, and then goes straight to Hulu hours later,” she said, “still reaching almost 15 million viewers, but meeting our viewers where they are.”
As for ESPN, Iger reiterated that one of his top priorities is “turning ESPN into the preeminent digital sports platform and ultimately bringing ESPN direct to consumers instead of just through cable and satellite.”
Pitaro added that right now the company was “in market right now, doing research. We’re looking at things like timing, things like price point.”
“Our mission is to serve the sports fan anytime, anywhere,” he added. “So, if you want to continue to access ESPN in the traditional way through cable or satellite, you’ll be able to do that even once we take it over the top.”
He acknowledged that they are “in market talking to potential partners, looking through lenses like technology, marketing and then also content,” but that the company is also prepared to go it alone if need be. Iger said the company is “fully prepared” to do so, though he added that without partners it could be more “challenging,” a source said.
Iger and D’Amaro also touted the recently announced $60 billion parks investment.
“We stood up on the stage just several weeks back in front of an investor community and said we are going to invest $60 billion in the next 10 years into this business because we believe in it,” D’Amaro said. “We’ve seen what it’s done. We see the impact that it has on our guests and fans around the world. We’ve got so much space to play with. Disneyland for example, Walt’s original theme park, we still have enough room to build another Disneyland there if we choose to do that. So many stories to continue to tell, so many new places to go. So, we’ve come a long way in the last few years but incredibly excited about the future.”
