With Walt Disney Company Chief Executive Officer Bob Iger back at the helm and leading the Theme Park, Media, and Entertainment goliath, there are undoubtedly several issues and challenges that the company is dealing with. On April 3, 2023, Disney will hold its first annual shareholder’s meeting with Mr. Iger back in the driver’s seat. Throughout this article, we will highlight some of the topics and significant directional changes that the company is focused on as the company moves into the next few years.
Related: Disney Announces New HR Chief as Company Prepares For Massive Layoffs
As many Disney fans, investors, and company enthusiasts know, Bob Iger returned to the Walt Disney Company in November 2022 after the board of directors shockingly dismissed former Disney CEO Bob Chapek from his post.
While not surprising to some because of the company’s performance over the year before his firing, the move sent a seismic shift and ripple throughout Disney from the Theme Parks to its streaming divisions, such as Disney Plus. It was clear that when the board decided to bring back Bob Iger as CEO, it was to change the company’s operations to help improve processes and make its end consumers happy with the products and services the business had to offer.
Related: Disney Braces For Thousands of Layoffs After Bob Iger’s Bombshell
Will Cast Member Layoffs Continue?
Earlier this week, we began to see some of the significant changes that Iger and his management team have started to make. In February, Disney CEO Bob Iger announced that around 7000 layoffs were heading to the Walt Disney Company. As of March 27, 2023, Iger has informed his employees that the process has begun.
Last week Iger sent a mass email to company informing those who have been layed off. Starting the message with “fellow employees,” Iger said, “This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions. …A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of summer to reach our 7000-job target.”
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The most surprising thing taken away from this is that the layoffs won’t just continue into April but possibly into summer as well. It’s also surprising to hear such cold terminology from Disney, a company that advertises itself as a place filled with happiness and creativity.
Effects of the layoffs have already been seen with multiple higher-ups released, including executives from Hulu and Freeform, and the entire Metaverse division being dissolved. For example, even Marvel Chairman Ike Perlmutter was let go last week. Perlmutter was laid off because he failed to shake up Disney’s board.
In addition to Marvel Studios, ABC News also suffered major losses to its staff. Staff members at ABC News last week were surprised to learn their division was next on the chopping block. According to a report from CNN, Disney has laid off several senior executives at the news studio. It has been announced that 50 roles have been cut from the team and that the company will have to restructure the entire newsroom due to the significant workforce cutbacks.
It’s a common strategy in downsizing to first let go of the highest-paid roles (such as VP roles), especially when the main objective is to save money. Disney’s goal is to save $5.5 billion companywide after all the cuts, which means there will be much more. While it is still being determined who will be next, one thing is certain, no subsidiary is safe, and no role is guaranteed to stay.
It will certainly be interesting to see what Bob Iger and Disney management have to say about further restructurings and layoffs.
Will Hulu Stay Apart of the Disney Family?
When Disney acquired 20th Century Fox in 2019, a large part of Hulu came with it. Thus, Disney became the largest shareholder of the streaming service, owning two-thirds of it. This was a win for Disney as they needed the content to compete with Netflix back when their Disney+ bundle was first released. However, the bulk of the remaining shares has always been in the hands of Comcast (33% stake).
Soon, it will be time for Disney to commit to Hulu fully. In 2024, Comcast can demand The Walt Disney Company to completely buy out their shares in a put option, which would give Disney full ownership of the streaming service. But the price won’t come cheap. Once the deal is made, Disney must dig deep into their pockets and fork over $9 billion.
Related: Hulu Employees Feel Abandoned Following Bob Iger’s Latest Comments
Hulu, Disney’s general entertainment US domestic streaming arm, has 48 million subscribers nationwide. Since Disney acquired the majority operating rights to Hulu, Disney has successfully grown that subscriber base from 22.8 million subscribers in the first quarter of 2019. Hulu does, after all, in certain aspects, have a broader appeal to audiences than some of its more traditional entertainment, film, and television offerings.
Since the return of Walt Disney Company CEO Bob Iger, speculators on Wall Street have been asking themselves what the company should now do with Hulu. Based on reporting from the Financial Times, Hulu’s current ownership structure has a set timer on whether Disney will outright buy Hulu.
During the annual meeting next week, stakeholders will be interested to see if Disney has any more commentary on what it plans to do with Hulu in the future.
What Does The Future Look Like For ESPN?
During the latest earnings report on Wall Street, Disney CEO Bob Iger announced some interesting corporate changes and restructurings in an effort to help turn around the company. Following the dismissal of former Walt Disney Company CEO Bob Chapek, one of the significant changes at the house of mouse had to do with ESPN. For the first time since being acquired by Disney, ESPN will become its independent unit within the entertainment and theme park giant.
Related: Disney Is Poised to Add New Feature to It’s Streaming Platform
In the past, Bob Iger has stated on numerous occasions that the ESPN brand was a differentiator and that the brand awareness was very healthy. Despite his recent comments on ESPN, it hasn’t stopped Wall Street and analysts from making some major predictions. For instance, just recently Macquarie analyst Tim Nollen wrote in a note published last week that “Disney is facing some big decisions on its streaming services, and we wonder if the fates of ESPN and Hulu could be intertwined,” according to a recent article published by Yahoo Finance.
The question moving forward, is Iger and the Walt Disney Company management separating out ESPN as a standalone business unit to test out the capital markets or is this really a strategic plan that will benefit the company moving forward? It is doubtful we will learn the answer to this question next week, but it is a topic that needs to be paid attention to.
DeSantis Vs. Disney, The Battle Continues?
One interesting topic that will likely come up from shareholders is where Disney stands with the debacle that is currently taking place in Florida.
Related: Disney World Secretly Made Reedy Creek Powerless Before Handing it to DeSantis’s Committee
Walt Disney World Resort found itself immersed in a political battle against Republican Florida Governor Ron DeSantis last year after former CEO Bob Chapek spoke out against The Parental Rights in Education Act. Better known as the “Don’t Say Gay” law, the legislation essentially forbids discussion of sexuality and gender with children and empowers teachers to out children to their parents. After Disney fans and Cast Members protested, DeSantis warned Chapek not to speak out against the law. Still, the former CEO denounced the conservative bill and promised to pause political donations to legislators that supported the law.
In response, Gov. DeSantis introduced and passed legislation to dissolve Disney’s Reedy Creek Improvement District, a legislative privilege held by The Walt Disney Company since 1967. The Right-wing governor appointed a hand-selected board to take over the municipal district, now called The Central Florida Tourism Oversight District. The government board officially took over last month, but The Mouse may have gotten the last laugh.
Related: World Turns on DeSantis as Disney Plays its Greatest Trick Yet In Reedy Creek Battle
The board claims that, before their takeover, The Walt Disney Company quietly passed restrictive covenants that would render the board powerless for decades. “We’re going to have to deal with it and correct it,” board member Brian Aungst Jr. told the Orlando Sentinel. “It’s a subversion of the will of the voters and the Legislature and the governor. It completely circumvents the authority of this board to govern.”
What will you be looking to hear about during the Walt Disney Company’s Annual Shareholders Meeting?