Following the company’s announcement that it would eliminate 7,000 positions and cut $5.5 billion in expenses as part of a bigger reorganization, Disney CEO Bob Iger made an appearance on CNBC’s “Squawk on the Street” on Thursday.
Iger, who took over as CEO of Disney again in November, declared on Thursday that he had no intention of holding the position for more than two years.
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Iger stated to CNBC’s David Faber on Thursday, “Well, my plan is to stay here for two years, that’s what my contract says, that was my arrangement with the board, and that is my choice.”
Iger admitted that, in addition to assisting the board “succeed at succession,” he has a lot to accomplish in his limited tenure. Last year, Bob Chapek was fired by the board. He was Iger’s chosen replacement.
“When we decided to vote for Bob [Chapek] in 2020, we believed we had made the proper choice. Iger declined to elaborate on what caused the abrupt resignation and stated that the board had concluded in November that he wasn’t the best candidate for the position.
Disney’s streaming plan and turning the company profitable are at the top of the list, Iger said on Thursday. Streaming, in his words, is “the future.”
Bob Iger: When it comes to Disney+, we have pricing leverage.
WATCH VIDEO NOW 05:11
Bob Iger: When it comes to Disney+, we have pricing leverage.
Disney stated this week that it would eliminate $3 billion from its content costs as part of its cost-cutting initiatives. Iger’s actions also resolved a conflict between Disney and Nelson Peltz, the leader of the activist firm Trian.
After Iger’s interview, Peltz called CNBC to announce that the proxy war between the two sides was done.
Our own subgrowth has us “intoxicated”
Disney also said that it would stop providing guidance on its subscriber counts and instead concentrate on revenue in order to get its streaming business profitable by the end of 2024.
Iger remarked on Thursday that the cheap entry price of $6.99 that Disney+ used to enter the market had “perhaps intoxicated us.”
Iger claimed on Thursday that the business’s streaming strategy has “pricing leverage.”
This past week, Disney announced that its direct-to-consumer division had once again produced an operational deficit for the previous quarter. Iger admitted on Thursday that “We’re still losing money on streaming.” “We have to change it,”
Nelson Peltz, a billionaire activist investor, claims that the Disney proxy battle is resolved.
WATCH VIDEO NOW 02:06
Nelson Peltz, a billionaire activist investor, claims that the Disney proxy battle is resolved.
In an effort to increase profits, media executives have started raising the cost of streaming services. A loss of 2.4 million Disney+ subscribers is likely due to Disney’s recent pricing increase during the most recent quarter.
This week, Disney revealed that it would capitalize on the success of its franchises by producing follow-ups to beloved movies like “Frozen” and “Toy Story.” Iger claimed on Thursday that general entertainment wasn’t a “differentiator,” even when it came to pay-TV and streaming.
Disney also runs Hulu in addition to Disney+ and ESPN+, and has until 2024 to acquire Comcast’s 33% investment in the streaming service in order to gain complete control. It’s still unclear if Disney will buy the stake.
Iger remarked on Thursday that “everything is on the table right now.” Although Disney is “focused on reducing our debt over time,” he continued, the firm is not currently concerned about leverage.
Following the news of the restructuring and the company’s earnings report on Thursday, Disney’s shares increased.
