““The disruptive forces that have been preying on that business for a while are greater than I thought and…there’s a reality to it that we have to come to grips with and we have to come to grips with that now””
That is Walt Disney Co. Chief Executive Bob Iger, who said Thursday he’ll be taking a hard look at the company’s linear media businesses in the process.
Iger, who returned to lead Disney last year after leaving in 2020, told CNBC Thursday that he plans to take an “expansive” and “open-minded” look at the future of Disney’s
DIS,
legacy cable and network businesses, which “may not be core to Disney.”
He was candid in discussing the “erosion of the linear business,” which is “kind of closer to obsolescence” now. The talk echoed Iger’s tone from last September, when he said that traditional TV was “marching to a distinct precipice.”
“There’s clearly creativity and content that they create that is core to Disney, but the distribution model, the business model that forms the underpinning of that business, and that has delivered great profits over the years, is definitely broken,” Iger said in Thursday’s interview. “And we have to wait and we have to call it like it is and that’s part of the transformative work we’re doing.”
When pressed to say whether he specifically was open to separating those businesses out of Disney or looking at other structures for them, however, Iger said he wouldn’t speculate.
Iger’s commentary comes a morning after Disney disclosed that its board of directors had extended his contract as CEO through December 2026. When Iger returned to the top post late last year, his stint was only expected to last two years, but Disney now wants more time to lay out a succession plan.
Opinion: Bob Iger’s repairs at Disney’s crumbling castle need more time
Disney’s story has proven a controversial one lately, and Wall Street sentiment has soured amid various challenges at the company, from leadership upheaval to high-profile film busts to tough questions about the streaming transition.
See also: Disney’s stock is slumping, but one analyst sees a silver lining
Investors are keenly looking for updates on Disney’s ESPN roadmap, and Iger acknowledged the inevitability of the service’s streaming future.
“We haven’t said when but we do know that it will happen,” he said.
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Iger defended the company’s involvement in sports broadcasting despite the high cost of programming rights. Sports represent “a very, very attractive medium” and Disney boasts “a unique position and we feel that we should stay in it,” he said.
Meanwhile, he showed frankness in laying out challenges in the film business and with streaming.
“There have been some disappointments we would have liked some of our more recent releases to perform better,” he admitted. Amid Disney’s “zeal” to grow its content breadth and streaming offerings, the company “ended up taxing our people way beyond in terms of their time and their focus.”
Meanwhile, in streaming, Disney will be “surgical about how we spend and what we spend it on,” but Iger is highly upbeat about the potential in direct-to-consumer media.
Streaming “will contribute to a business that not only will become profitable but will deliver growth for the company,” Iger said. He said he sees a strategic value in having a direct relationship with consumers in media.
This post was originally published on Market Watch
