Advertisement

Disney: 3 changes Bob Iger has made since taking over

Yahoo Finance’s Allie Canal joins the Live show to discuss the outlook for Disney following Bob Iger’s return.

Video Transcript

BRAD SMITH: Disney in the spotlight once again this week as investors gear up for the company's first report since Bob Iger made his return as CEO. So what should they be focused on?

Yahoo Finance's Alexandra Canal joins us now. Allie, what are you going to be watching for?

ALEXANDRA CANAL: I'm watching for a lot of things. This is an exciting time. As you mentioned, Bob Iger's first earnings report since that surprise return in November, and since then, there have been a lot of changes. So I do think it's important to take a second to look back to see what Iger has changed at the company in that short amount of time.

Number one was the fact that he immediately restructured Disney's entertainment and media division, otherwise known as DMED. In addition to firing Kareem Daniels, who was a top streaming executive at the time-- and all of this was one of Chapek's first big swings. And basically the very first day that Iger stepped back into that CEO position, he undid it all.

So I think on this earnings call, investors will want a little bit more clarity when it comes to Iger's plans on managing Disney's various content pipelines and how that all feeds into Disney's various streaming services, which include Disney+ Hulu, and ESPN.

Another major change that we saw was when it comes to that new hybrid work mandate, Iger mandating that employees be in the office four days a week. He is very focused on creativity, and it seems like during the Chapek era we lost a bit of that camaraderie, of that togetherness, and this seems to be paramount for Iger with culture.

So even though employees are not too happy about that-- there have been rumors that they're going to protest that four-day mandate. That's something that Iger immediately wanted to see happen.

And then finally, another major change that we saw recently was adjustments to the park pricing. The ballooning prices at the parks, they've been heavily criticized by a lot of Disney fans, Disney consumers, and even Iger himself admitted that he was surprised to see a lot of those increases. And although Iger didn't necessarily roll those back, we have seen more incentives for those premium members like free parking at Disney resorts along with free photos at the parks.

And the parks, you know, they continue to remain a very important part of Disney's bottom line. And we did see that miss on revenue within the parks division last quarter, so that's something to keep an eye on. But really lots to track in this earnings report.

JULIE HYMAN: Yeah, and then there's one thing-- one change that Iger didn't make that maybe he's being pushed to make, and that has to do with the board of the company and Nelson Peltz's activist campaign against it. Are we expect to get any kind of commentary about that on the call?

ALEXANDRA CANAL: I would be surprised if Iger chose to address this. Obviously we've heard from both sides over the past few weeks, statements from Peltz, statements from Disney. I don't think we're going to get anything on this call.

However, I do think there's other things that Iger needs to address, number one being the cost cutting and layoffs that Disney has sort of teased. We haven't gotten any concrete news on that, so I think that's something that they'll have to address. Also the declining television business, how do they plan to handle that?

And then on those Disney+ targets for profitability and subscribers, the Street has been a little lukewarm on that. The previous target said Disney+ would turn a profit by next October, reaching subscribers between 215 million and 245 million by 2024, and Disney+ currently only has about 164 million worldwide subscribers. So there is a little bit of an expectation that Iger could address those targets for Disney+.

So, you know, I think what Iger chooses to address and the tone that he chooses to go with on this call, that's going to be paramount for investors and the stock reaction.

BRAD SMITH: All right, Yahoo Finance's Allie Canal going to be tracking that, and you're going to be on the call as well. Allie, appreciate it.