Bob Iger faces the unenviable task of making Disney profitable again, but his previous decision to buy 20th Century Fox may make this impossible.
- The Disney Corporation has expanded tremendously over the past two decades under the hand of CEO Bob Iger, acquiring multiple franchises like Star Wars, turning Marvel into a multi-billion dollar franchise, releasing three of the six films ever to break $2 billion in the box office, and launching Disney+ in November 2019.
- The peak of this expansion came on December 14, 2017, when Disney announced its intention to acquire 20th Century Fox. It would do so on March 20, 2019, for $71.3 billion—with Disney now controlling 27% of the entire film industry.
- This has given the company several high-profile successes, such as the newly released Avatar: The Way of Water, which has grossed over $2.12 billion worldwide since mid-December.
- But as film journalist Scott Mendelson notes, Disney still owes a massive outstanding debt and the weight of such a massive studio may prove too unwieldy for Iger to successfully guide the ship before he completes his short term as CEO.
Why It’s News
Disney could seemingly do no wrong under the previous administration of Bob Iger. The company expanded exponentially from an animation studio, buying Pixar and slowly growing its live-action arm over time until it overtook the entire film industry. And now it is faltering, with the removal of CEO Bob Chapek being an indicator that the company is taking heavy losses and stands to lose more.
Disney will likely announce first-quarter losses at its investor call on Wednesday, February 8. Iger was brought on to fix the problems that arose in his absence, and it may not be possible to do so if such a heavy machine and so many expensive projects all under one roof.
Backing up a Bit
20th Century Fox went on sale in late 2017 and had several prospective buyers, including Comcast. Disney’s purchase was either done as a means of obtaining desirable assets or declining the sale of a valuable rival to its competitors. As Mendelson notes, while the studio has taken advantage of The Simpsons, X-Men, Alien, and the Avatar franchises, Disney has let the studio’s vast catalog of thousands of historical films and franchises languish.
“Disney’s purchase of Fox’s studio properties may prove to be Iger’s biggest blunder, dealing lasting damage to the company’s reputation among shareholders for media-merger magic. The idea that Disney could take any given property, get audiences to associate it with its megabrand and make it an even bigger cross-platform commercial success was part of how it sold Wall Street on the notion of total entertainment dominance,” says Mendelson.