Bob Iger’s return as Disney’s CEO will bring about many changes within the company. Disney fans have shared what they hope those changes will be, including lower prices and the return of certain perks. Shareholders and investors have their own set of goals for the company, including profitability for Disney+. So what’s really going to change?
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A report that Disney recently filed with the U.S. Securities and Exchange Commission may provide some insight into the future of changes at the company.
One of the most important voices in Bob Iger’s ear right now comes from the Disney Board of Directors — the people who re-hired him in the first place. The Board has its own goals for Iger’s time as CEO, which were outlined in the initial announcement about the CEO’s return. Here’s an excerpt from that announcement:
“The Walt Disney Company announced today that Robert A. Iger is returning to lead Disney as Chief Executive Officer, effective immediately. Mr. Iger, who spent more than four decades at the Company, including 15 years as its CEO, has agreed to serve as Disney’s CEO for two years, with a mandate from the Board to set the strategic direction for renewed growth and to work closely with the Board in developing a successor to lead the Company at the completion of his term.”
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Those 2 goals — set a strategic direction for renewed growth and develop a successor to lead the Company when he leaves — are likely at the forefront of Iger’s mind as he plans for upcoming changes.
©Alberto E. Rodriguez / Getty Images
In the recent SEC filing, Disney provided more information about what a “strategic direction for renewed growth” will look like. One section included this statement:
“As contemplated by the leadership change announcement, we anticipate that within the coming months Mr. Iger will initiate organizational and operating changes within the Company to address the Board’s goals. While the plans are in early stages, changes in our structure and operations, including within DMED (and including possibly our distribution approach and the businesses/distribution platforms selected for the initial distribution of content), can be expected. The restructuring and change in business strategy, once determined, could result in impairment charges.”
©Disney | Walt Disney Company Headquarters
Essentially, Disney is saying here that The Walt Disney Company is going to get a shake-up. “Organizational and operating changes” will likely mainly affect Disney’s strategy for streaming, as the company specifically named the DMED (Disney Media and Entertainment Distribution) as one area that will be changed.
Underperformance in streaming was likely one of the main reasons that Disney decided to oust Chapek in favor of Iger. Chapek reported unfavorable streaming numbers during a fourth-quarter report in 2022, shortly before he stepped down from his position. Disney has previously claimed that Disney+ will become profitable by 2024 — a lofty goal Disney apparently felt Chapek was unable to meet.
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Currently, “the majority of Disney+ revenue is derived from subscription fees.” Disney+ will be getting a price increase in December 2022, and an ad-supported tier will also be introduced, which will bring in revenue from advertisers. Disney stated that “Disney+ Hotstar generates advertising revenue and Disney+ generates Premier Access fees.”
Many of the changes that will happen at Disney will affect organizational structures and processes within the company, and they may not be obvious to outside observers. We’ve already seen a few executives from Chapek’s era exit the company, and it sounds like more staffing changes could be on the way.
Chapek isn’t the only one who left. ©Disney
Bob Iger has already begun to make some organizational changes with Disney’s streaming division. In fact, he announced that the DMED structure that Chapek instituted will be done away with. Kareem Daniel (who led the division) has already left Disney.
Iger previously said that he intends “to restructure things in a way that honors and respects creativity as the heart and soul of who we are.” On his first day as Disney’s returned CEO, Iger formed a committee that included CFO Christine McCarthy, studios chairman Alan Bergman, Disney General Entertainment Chairman Dana Walden, and ESPN Chairman James Pitaro.
The committee is responsible for developing “the design of a new structure that puts more decision-making back in the hands of our creative teams and rationalizes costs.”
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Disney warned in their report that these changes may initially affect profits as the company goes through growing pains: “Changes in our business strategy or restructuring of our businesses has increased and may continue to increase our costs and has otherwise affected and may continue to affect the profitability of our businesses or the value of our assets.”
We’ll continue to watch for more updates from Disney on changes that are happening with Iger’s return. To learn more about the leadership change at Disney and what could come next as a result, check out these posts:
- Bob Chapek’s Cost-Cutting Caused a “Rift Between Creative and Corporate Leadership” at DisneyBob Chapek’s
- “They Brought This on Themselves” — Governor DeSantis Responds to Disney CEO Bob Iger’s Comments on Florida Legal Battles
- Every Major Change Since Bob Iger Returned as Disney’s CEO
- Will Bob Iger Reverse Bob Chapek’s Decisions?
- CEO Bob Iger Comments on Disney Park Pass Reservation System
- The FIRST Thing Disney Fans Want to See from Bob Iger
- 7 Big Challenges Bob Iger Will Face as Disney’s New CEO
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There is little (if any) new information here. With the same Board in place, it is doubtful that any meaningful changes will emerge. This Board is acting much like leaders of illegal enterprises. Bleed something dry and move on. As the economy continues it’s downward slide, it is doubtful that people will want to pay for a vacation that is overpriced and stressful. Stop hitting the snooze button and wake up before it’s too late.
Hope they change their “ fast pass” system ( aka genie plus and lighting lane)
Agree! The new lightning lane process creates undue stress while on vacation. Instead of enjoying your time with family, you’re on the app trying to plan for something that could have been done prior to arriving on property. Not to mention it’s a big rip off after spending big bucks on park entry tickets!
At this point, Disney is bleeding guests dry. They did away with free transportation ( Magical express) and free fast pass. Disney is high priced anyway without adding these costs. However, as my friend advised me, “we love Disney so we try to shut up and go”. But now maybe fewer trips
Stockholders should somehow push for a new chairman and possibly others board members do to a lack of confidence in their abilities to oversee the company. The extension of Chapeks contract is all the proof they need.