Monday, June 24, 2024

Bob Iger Describes Writers’ Strike Demands as ‘Disturbing’ on Heels of Disney Contract Extension

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The Walt Disney Company will extend CEO Bob Iger’s contract, pushing his tenure through 2026, the company announced in a statement on Wednesday (July 12). 

Iger was originally meant to step down as CEO in 2024, but his extension will keep him atop the mass media and entertainment conglomerate for another two years. In a statement, Disney’s board of directors endorsed Iger’s “successful leadership record and ongoing strategic transformation of the company to meet industry challenges.”

In a memo to staff, Iger framed the decision in terms of “tectonic shifts occurring in our industry” that will require the company to “remain steadfast, strategic, and clear-eyed about the road ahead.” 

In a buzzworthy cable-news appearance this morning, the 72 year-old Disney CEO framed his contract extension as a prudent response to tough economic realities—from the worsening labor unrest in Hollywood to underperforming assets in Disney’s television portfolio.

“I would say that in some cases the challenges are greater than I had anticipated,” Iger told CNBC of the task set for him by the board of reviving corporate earnings while looking for his own successor. “If anything I would say the disruption of that business has happened to a greater extent than he predicted.” 

Specifically, the Disney CEO took aim at the current labor unrest, calling the contract demands of the current writer’s strike and the impending actors’ strike “very, very disturbing.” 

“This is the worst time in the world to add to that disruption,” he told David Faber on CNBC’s “Squawk Box,” adding that “there’s a level of expectation that they [SAG-AFTRA and the WGA] have that is just not realistic.”

Strikers, he said, “have to be realistic about the business environment and what this business can deliver” or the labor unrest will have a “very, very damaging effect on the whole business.” 

“We managed as an industry to negotiate a very good deal with the Directors Guild that reflects the value that the directors contribute to this great business,” Iger said. “We wanted to do the same thing with the writers and we’d like to do the same thing with the actors. There’s a level of expectation that they have that is just not realistic, and they are adding to a set of challenges that this business is already facing, that is quite frankly, very disruptive.”

In November, the board tapped Iger to return from a short-lived retirement to take the corporate reins from Bob Chapek, after a slowdown in streaming subscribers cut the valuation for Disney.

The board had given Iger two years to revive corporate earnings while looking for his own successor. With the two-year extension signed, Iger hinted at further big changes that may be in store for media properties in the Disney portfolio.

Specifically, the company may be looking to part ways with underperforming television assets, including the broadcast network ABC and cable television sports-broadcasting network ESPN.

Addressing ABC, where Iger got his start as a weatherman in 1974, he said the broadcast network “may not be core” to the company. Of ESPN, he commented, “We’ve had conversations” with potential “strategic partners” to help the sports colossus make the transition to a direct-to-consumer model. He added that “we want to stay in the sports business.”

Since he returned, Iger has undertaken a broad restructuring of the company, including 7,000 layoffs amid a reorganization into three core segments: entertainment, ESPN and parks. This morning, he suggested that more tough decisions will be needed to increase profit and “address some existing structural and efficiency issues.”

Disney, the global mass media and entertainment conglomerate founded by Walt and Roy Disney, and headquartered in Burbank, turns 100 years old this year.

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