Disney: Return of Iger, 'King of Hollywood' | FT Film | opinion
Filmed by Gregory Bobillot, Ryan Griswold and Petros Gioumpasis. Graphics by Russell Birkett. Produced, directed and edited by Daniel GarrahanThis is a story about the world's most revered entertainment and media company.A different landscape for players like Disney, who used to be the top dog.Bob Iger has been one of the most successful chief executives in Hollywood history.
Before we talk about streaming and all of the challenges, we should just remember what an enormous entertainment juggernaut Disney is. Over the years, Louis B. Mayer, Lew Wasserman, who created MCA Universal, which is now Universal, Steven Spielberg, David Geffen, Jeffrey Katzenberg, who formed DreamWorks - these were people who commanded a certain amount of respect and a certain amount of fealty.
Pixar was ironically started by a man who learned his trade at Disney, a guy called John Lassiter. He put John Lassiter in charge of Disney Animation. The output improved immeasurably. There was hit after hit. A comic book becomes a movie which becomes a video game which becomes a theme park attraction, and so on. In Pixar's case, an animated film that moves across so many different businesses, they are leverageable across so many different platforms - existing ones, and ones that we haven't even seen created yet.
Using that intellectual property to drive sales of consumer products, to drive visits to the theme park served Disney and served Iger really, really well in the first 15 years at the top of the company. Outside of the walls of Disney there seemed to be a lot of discussion of Bob needing to find a successor for the job that he had not yet decided that he was going to vacate.
It seemed rather sudden that Iger left. Was it fearing that the pandemic was going to be worse than anyone expected? Was it trying to go out on top? Yeah, he wasn't a TV guy. Iger came up through TV. He used to be a TV weatherman. So he was really steeped in TV and Hollywood culture. It became a very public, quite messy round. Iger would never have done that in a million years. Never.
The lifeblood of Disney is its creative output. And if the head of the company doesn't have the support of the creatives, then you don't have a company. I met Bob Iger just weeks before he was due to leave the company. At the premiere of Encanto, Iger and I were chit-chatting, and he said, are you here to interview him? And I said, yeah. And he said, OK. It was an interesting moment.
Nelson Peltz is this investor with this hedge fund which is called Trian. His goal was to raise the stock price and he makes money off of it....to give him a seat on the board. This is the things that Bob Iger can do that Chapek would never get away with. If you cross him, you will pay for it.Cost cuts and reducing staff is not exactly unique to the Walt Disney Company. We've seen it at Paramount, Warner Brothers, Discovery, Netflix. My guess is Disney would have done a lot of this stuff regardless.
So they went from cheering on this strategy, grow subscribers, who cares about the money, into you need to figure out how to make money.Well, there's a big focus on driving revenue and cutting costs. 7,000 jobs will be cut and five and a half billion dollars in costs. As linear TV erodes and as the cable universe declines, the opportunity for taking that advertising to streaming has still not been realised.
There is too much competition in streaming. There's definitely too many companies that are going to require consolidation. I don't think there's anyone out there, though, who doesn't believe Disney is an ultimate winner. The question is, what do they want to win? Competition for streaming services is intense. And investors don't want Disney losing $3bn to $4bn. They want them making money in streaming.
But even with ESPN, they know that, eventually, they're going to have to move it to streaming somehow. And that's going to cost a lot of money. I would not be surprised in 10 or 20 years if there's still a strong, steady broadcasting and cable business that contributes a lot to cash flow - not a growth business. But radio has been around for, I don't know, a hundred years, and it's not a growth business, but it's a big cash business.
This is part of Bob Iger's big mission, how to revive some of its great franchises, from Pixar to Marvel to Lucas. All of the headaches that Disney's had, the great news that they've had over the last year has been the rebound in theme parks.Coming out of Covid, it almost seems insatiable, this demand for live experiences.
The clock is running on Iger. He's got less than two years now to execute a turnaround plan, come up with a growth plan.
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