The Walt Disney Company has had a rough run over the last two years, with shares sitting at essentially the same level they were in 2015 while other stocks have rebounded strongly. ☹️
Its recent struggles have brought back former CEO Bob Iger, who was supposed to take over again until 2024. However, the company announced it was extending its contract by two years through 2026, potentially signaling that there’s a lot more work to be done.
Since rejoining late last year, Disney has laid off thousands of workers and reduced its content efforts as it looked to refocus on profitable growth. But it appears that those initial moves were just the start of a much bigger transformation. ✂️
Disney now operates in three segments: Disney Entertainment; ESPN; and Parks, Experiences, and Production. Executives are taking a hard look at all three segments to see where additional cost improvements can be made, strategic initiatives could take place, and where the most value is.
This week Bob Iger hinted that the company could sell its linear TV assets, reassessing its portfolio of assets, including ABC and cable TV channels like ESPN. After retaking the helm, Iger says the media landscape’s challenges were greater than he had anticipated. And that the company may decide some of these assets are not part of Disney’s “core business.” 🕵️
As for Hulu, Iger said he’s concluded that the company is better off keeping it. The combined Hulu and Disney+ offering is a critical part of getting the streaming business to profitability. However, a much more focused approach with its key franchises is required. 📺
Clearly, there’s a lot of work to be done, but shareholders appear optimistic that Iger can “right the ship” during his next few years as captain. For now, we’re all waiting to see what the catalyst will be to get $DIS shares moving in the right direction again with the rest of the broader market. 🤷