Returning CEO Bob Iger has plans to get Disney back on track—reversing some of the changes that former CEO Bob Chapek made.
Key Details
- Iger plans to reorganize Disney’s power structure, shifting the focus back to the creative teams, which undoes some of Chapek’s work.
- The changes will reduce Disney’s operating costs by $2.5 billion. Additionally, Iger plans to cut another $3 billion from the entertainment company’s content spending budget.
- The company will lay off around 7,000 employees.
- Disney+, the company’s streaming service, will also see some changes. Iger raised subscription prices in December.
- Iger has also stated that Disney won’t bother with the “global arms race for subscribers” and may even license its content to other platforms to boost revenue.
Why it’s news
While Iger has shared many of his plans to get Disney back on track, some questions remain unanswered, such as his long-term goals for streaming services.
In addition to Disney+, Disney owns two-thirds of Hulu. Cable provider Comcast owns the remaining third. But the agreement between Disney and Comcast will expire in 2024, and Hulu’s growth is dropping off—giving Disney a reason to drop the streaming service. In September, Comcast indicated that it would be interested in buying Disney’s share, Yahoo Finance reports.
Though Hulu’s profit margins are shrinking, the TV shows on Hulu tend to perform better than those on Disney+, making Iger’s decision about whether or not to give up the streaming service a little more complicated, Yahoo Finance reports.
In addition to the streaming service, Disney must decide what to do with the sports network ESPN. The network has long been an awkward fit with the rest of Disney’s properties. While Iger says he does not plan to spin out ESPN as its own entity, that could change if Disney makes other acquisitions, such as entering the video-game market.
Iger’s time as CEO is limited—he has around 22 months left in his contract. As part of his agreement to return, Iger is also tasked with finding a new successor.