Not long after news broke that Disney CEO Bob Iger had agreed to stay for two additional years, he dropped several bombshells on the media world with revelations made during an interview with CNBC.
Speaking with David Faber on the network’s “Squawk Box” program, whose new contract extension means he’ll be at Disney through 2026 at least, discussed the “transformative” work he has begun before he hands off the company to a successor.
“Transformative work is dealing with businesses that are no growth businesses and what to do about them, and particularly the linear business, which we are expansive in our thinking about,” Iger said. “And we’re going to look expansively about opportunities there because clearly, it’s a business that is going to continue to struggle.”
At that point, Faber stopped Iger to ask if by ‘transformative’ he meant getting rid of legacy networks like ABC and FX: “Are you going to look to sell them?”
“We have to be open-minded and objective about the future of those businesses, yes,” Iger replied.
“Meaning that they’re not core to Disney?” Faber asked.
“That they may not be core to Disney,” Iger added.
Continuing, he said, “The distribution model, the business model that forms the underpinning of that business and that is delivered great profits over the years, is broken. And we have to call it like it is.”
He clarified that he was not talking about ESPN, which he said Disney views “very differently.” But he was clear that ABC, National Geographic, and others owned by Disney could soon be on the chopping block
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Earlier this year, reports noted that the Walt Disney Co. was continuing to struggle financially after a series of decisions involving “woke” content and following a high-profile battle with Florida Gov. Ron DeSantis (R), who is running behind former President Donald Trump in GOP polls for the 2024 presidential nomination.
According to reports in April, Disney had begun planning to lay off as much as 15 percent of its entertainment workforce following an announcement by CEO Bob Iger two months earlier that they were coming.
Iger revealed plans to lay off 7,000 workers in a “strategic realignment” aimed at cost reduction. The layoffs, which take effect on Monday, will impact workers across various divisions, including television, film, theme parks, corporate, and entertainment, Bloomberg News reported.
“For our employees who aren’t impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward,” Iger told staff members in March. “In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world, now, and long into the future.”
As part of Iger’s shift towards prioritizing franchise properties and well-established brands, the company’s entertainment unit was expected to bear the brunt of the layoffs. But that may now have changed.
In addition to the layoffs, Disney is implementing a restructuring plan for its finance department, which involves closer consolidation of staff managing accounts for Disney Entertainment and ESPN. As per a memo obtained by Business Insider, Bryan Castellani was slated to serve as the finance lead for both business units under Disney CFO Christine McCarthy.
In May, Disney stock tumbled nearly 9 percent — the most significant drop in six months — which sent shockwaves through the company.
“The report was the first since Disney announced its new three-pronged business reorganization — Disney Entertainment, ESPN, and Disney Parks, Experiences and Products — as CEO Bob Iger attempts to streamline the media giant and reset its strategy. The company will begin reporting under the new structure later this year,” Yahoo! Business reported at the time.
