Happy Friday War & Peaceniks! To celebrate the Super Bowl, we’re going to Disney World!
Like many in the Media Universe, I eagerly awaited Bob Iger’s first earnings call since returning to Disney with as much anticipation as a pack of Cardinals looking for a plume of white smoke. Like most, I anticipated big cuts and management shakeups. But, as I wrote this week, I was hoping for far more: A vision for where New Old Bob was taking the New Old House of Mouse.
We got plenty of cuts and a smorgasbord of shakeup. There was good news, and bad. We heard a bunch of PR headlines, yet very little vision. Reboot Bob gave us lots of spin, and also a little surprise.
Unlike many in Media and Tech this quarter, Disney’s showed decent growth in revenue and net income - both beating analysts expectations. These good numbers came despite a loss of 2.4 million streaming subscribers in 4Q, and net income losses on Direct To Consumer streaming that were up 78% to more than $1 billion.
This mix of metrics was why Conquering Bob called it a “solid quarter,” yet in the same breath announced expense cuts of $5.5 billion ($2 billion more than Zaslav is aiming for at Disco Bros), and 7,000 layoffs. He wrapped this all inside a vision statement called “a significant transformation.'“ But a carefully worded statement is not an actual vision.
Rather than give us any clear direction for Disney, Bob touched all the bases and checked all the boxes. He and the Disney Spin Cheer Squad generated a listicle of things analysts, shareholders and Nelson Peltz wanted to hear, entered them into the ChatGPT, and got on the call.
“Iger offered something for everyone. A return of the dividend! Layoffs! Creative executives get their power back! Traditional TV is still important, Iger reminded everyone, but streaming is the future! He didn’t say anything about cutting taxes, but you get the picture. If this was an election—which, given activist investor Peltz’s proxy challenge, it is, kind of—you wouldn’t bet against Iger.”
My fear was that Iger would use big cuts to mask a lack of true direction. He did just that, and added a dividend bribe for all the shareholders. What I didn’t expect, because few did, was that Disney’s 4Q results would be good enough give him all the cover he needed, and buy him at least six months to figure everything else out.
Here’s why:
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