ESPN gets more fees, per cable customer, from cable operators than any other group of networks, making it particularly vulnerable to the loss of cable subscribers.Īt the same time, competition for sports programming is rising as streaming services such as Amazon start competing for rights packages, sending the amount ESPN must pay for the continued rights fees climbing. The self-proclaimed Worldwide Leader in Sports is facing the same problems that competitors throughout the industry are dealing with: a steady, inexorable decline in cable subscribers. The idea of Disney spinning off ESPN has been discussed for years – since early in Iger’s previous 15-year tenure as CEO. Reif Ehlrich said Disney will probably set new targets for both profitability and subscriber growth in Wednesday’s report and comments to investors. “Given a shift of attention from subscriber growth to profitability, most services have moved into a price-raising mode,” wrote Doug Creutz, analyst for Cowen. Chapek said at the time that the streaming business was still on course to “achieve profitability in fiscal 2024, assuming we do not see a meaningful shift in the economic climate.”īeyond the number of streaming subscribers Disney added in the period, investors will want to know how much money it lost, any change of target date for when it’ll finally be profitable, and how customers are responding to the new pricing options. īut that came at a cost of larger-than-expected losses of $1.5 billion for the quarter and $4 billion for the fiscal year that concluded October 1. “We also expect Bob Iger to provide high level thoughts on Disney’s strategic positioning in streaming, current asset mix and potential levers to re-accelerate earnings growth,” added Rief Ehlrich.ĭisney posted better-than-expected subscriber growth for Disney+ and its other streaming services in the company’s final quarterly report under Chapek in early November. “We do not believe that one person can single-handedly rescue the company, but CEO Iger’s return will force Disney to have an honest and courageous self-examination on what is working and what needs to be fixed,” said a note from Wall Street research firm MoffettNathanson. But, clearly, investors are eager to hear Iger’s plans for restructuring and cutting costs. (DIS) are up nearly 20% since Iger’s return was announced in November, far better than the overall market but behind the gains in the same period at some other media companies, such as Netflix Disney has so far avoided any large layoff announcements.
Layoffs have been widespread throughout the media industry, with expectations that there will be will fewer advertising dollars and spending by consumers in the year ahead. “Everyone has to know what directions they’re going in.”Īlong with the reorganization there could very well be job cuts. “He has to address that first,” said Rief Ehlrich. The expectation is that Iger will roll back the reorganization of the company’s Media and Entertainment Division that his hand-picked successor – and now predecessor – Bob Chapek announced in 2020, though the exact structure is not yet known. “We anticipate Disney is likely to introduce structural changes as well as cost cuts,” said Jessica Reif Ehrlich, analyst with Bank of America. The financial results might be the least interesting part of the call. Here’s what to look for on what is certain to be a closely-watched call.ĭisney’s earnings are expected to fall nearly 30% from a year ago despite higher revenue, thanks to strong theme park sales and Avatar: the Way of Water, which grossed about $400 million in ticket sales in its two weeks in theaters at the end of last year on its way to more than $2.1 billion worldwide, according to Box Office Mojo.
That ends at 4:30 pm ET Wednesday when he is set to begin an earnings call with Wall Street investors. Iger, who retired as CEO in 2020 only to be brought back in November, has been mostly quiet about his plans for the company since his return.
The company faces a media industry in turmoil, plunging cable subscriptions, a still-recovering box office, massive streaming losses, activist shareholders, possible reorganization and layoffs and growing labor disputes with employees. And that may be the least of Disney’s problems. Disney has found itself in the middle of a culture war battle that could end up transferring Disney World’s governance to a board appointed by Florida Gov.
0 kommentar(er)
