After one of the more celebrated CEO tenures in history, Bob Iger stepped down from his role leading Disney when his contract expired on New Year’s Eve 2020. Less than 11 months later, Iger was back in his old role, tasked with fixing the House of Mouse following a tumultuous period led by his handpicked successor, Bob Chapek. Based on Wednesday’s earnings report, Iger is beginning to deliver. Despite inflation impacting the wallets of its consumers, and messy proxy battles with several activist investors, Disney announced a Q1 earnings beat, raised its guidance, and revealed it had slashed its streaming losses.
Up to bat with new sports content
Disney had already made some news this week even before its earnings beat, announcing a joint streaming effort with Warner Bros. Discovery and Fox focusing on live sports. The platform will feature live streams of sporting events on ESPN, ABC, Fox, TNT and TBS. Based on the broadcast deals those networks have in place, the new streaming platform will feature some NFL games, virtually all national telecasts for Major League Baseball, the NBA, the NHL, and a host of college sports.
Turns out, that won’t be Disney’s only new bet on sports. Bob Iger announced a new standalone ESPN streaming platform, set for launch either in late summer or early fall 2025. Iger said the standalone ESPN service would have “many more features” than the joint service, providing viewers with an “immersive experience” including integrated betting, personalization and customization, and some form of shopping.
An 'Epic' foray deeper into gaming
Disney also took another huge step into the gaming world, announcing a $1.5 billion equity stake in Epic Games, the maker of Fortnite. Iger revealed the two companies will be working together to build new intellectual property, using Disney’s existing universe of stories. According to a press release on Disney’s website, the deal will also see the creation of a new “persistent universe” offering a “multitude” of new opportunities for users to play, watch, shop, and engage with characters and stories from Disney, Marvel, Pixar, Star Wars, and more.
New movies and shows
As for movies and TV, Disney announced a surprise “Moana'' sequel, set for release this November. The original “Moana” grossed $643.3 globally, and received an Oscar nomination for best animated feature. Disney has vowed to be more careful when it comes to sequels, after recent disappointments like “Indiana Jones and the Dial of Destiny” and “The Marvels”
Speaking of Marvel, the studio’s future has never been hazier: “The Marvels'' was the latest in an increasingly long line of underwhelming releases, making just over $200 million globally. “Ant-Man and The Wasp: Quantumania” made more than double that, but still failed to break-even. Furthermore, actor Jonathan Majors who played Kang The Conqueror, had been positioned by the studio as the MCU’s next big villain, but was recently convicted on charges of domestic violence. It now seems likely Marvel will have to make wholesale changes to its upcoming release calendar, which runs through 2027. While the studio hasn’t announced what kind of alterations it will make, it’s clear an ever-increasing number of projects has led to superhero fatigue at the box office.
Streaming streamlines
As for Disney+ and Hulu, Disney reaffirmed Wednesday it expects its streaming division to become profitable by Q4 of this year. Back in September, Iger revealed the company planned to roll Hulu into Disney+ here in the United States, creating a unified one-app experience (Hulu is not available outside of the U.S.). That process is now underway, with a beta version of the combined Disney+/Hulu app launching in December. The company expects Hulu on Disney+ to result in increased engagement, greater ad revenue, reduce customer-acquisition costs and lower churn, Iger said.
While these announcements helped Disney stock jump more than 7% in after-hours trading, investors are still anxious to learn more about Disney’s long term vision, specifically, who will replace Bob Iger this time. The CEO has said that when his contract expires in 2026, he’ll be stepping down for good. Asked by CNBC about his succession plan, Iger said “I'm confident we're going to find the successor to me in due time and the right time." Just don’t expect Iger to come riding to the rescue again next time there’s trouble.
