Disney Dining Serving up the latest Disney Eats, Treats, News, and More!
Disney’s CEO Bob Iger is pulling out all the desperate stops in an attempt to right the financial ship at The Walt Disney Company, putting up almost one-third of the company for sale in the last week.
RELATED: Disney’s CEO Hangs On, But a Skeleton Lurking in His Closet From 2019 Could End it All
Credit: Variety
When Disney+ first debuted on November 12, 2019, the majority of subscribers weren’t concerned with whether the streaming service would be lucrative for Disney. Instead, most were simply thrilled at the idea of having a massive (and ever-growing) content library full of their favorite Disney films and shorts at their fingertips–in addition to the immediate access they enjoyed to brand-new content created exclusively for the Disney+ platform, including the live-action remake of Disney’s 1955 Lady and the Tramp.
But since Disney’s streaming platform first went live nearly four years ago, it has been a financial nightmare for Disney. Nearly four years later, the would-be crown jewel of Disney’s television entertainment division has not turned a profit of any amount.
Disney’s “Lady and the Tramp” (2019)/Credit: Disney+
But for Netflix, the story reads very differently.
This week, the worldwide leader in streaming television will report its second-quarter results, and so far, expectations for those results are sky-high, as Netflix shares are up more than 90% since October 2022.
New data about Netflix’s success has led to an increased optimism about the streaming service’s profitability, per Bloomberg:
June was Netflix’s best quarter of domestic growth in years. About 3.5 million people signed up for Netflix in the US last month, an increase of more than 100% over its recent averages. Netflix accounted for one-quarter of all new domestic streaming sign-ups last month, at least among the services measured by Antenna.
This doesn’t mean Netflix added 3.5 million customers in the US. (That would be shocking.) Those are gross additions. Lots of people also canceled their Netflix accounts. But people are signing up a lot faster than they are canceling. That is good news for a company that hasn’t added customers at home in two years.
Good news for Netflix. Bad news for Disney+.
Since the streaming platform debuted in mid-November 2019, it has yet to make a profit for Disney, and things seem to be so bad that Disney CEO Bob Iger is reportedly considering selling Disney+ to finally wash the company’s hands of a string of missteps, mistakes, and alleged unlawful business practices that have led to the streaming service becoming a ball and chain for Disney.
In a post in May 2023, The Los Angeles Times stated that Disney’s streaming service reported an operating loss of $659 million during the fiscal second quarter of 2023. During the same quarter in 2022, Disney reported a loss of $887 million. But, the Times noted Disney’s promise to investors that Disney+ would finally reach profitability by the end of fiscal 2024. But now, a class-action lawsuit filed on behalf of Disney’s stockholders alleges that statements about the streaming service’s success and profitability were intentionally inflated to deceive shareholders.
The lawsuit names three Disney executives–former CEO Bob Chapek, former Chairman of Disney Media and Entertainment Distribution Kareem Daniel, and former CFO Christine McCarthy–and alleges that the former Disney execs participated in “unlawful business practices” related to making false statements and claims about Disney+ and its potential for finally turning a profit after nearly four years.
Christine McCarthy (L), Bob Chapek, and Kareem Daniel (R)/Credit: Reuters/Business Insider/Canva
RELATED: Disney’s CFO Is OUT Amid Serious Allegations of Illegal Business Practices
Under Bob Iger’s initial tenure as CEO of The Walt Disney Company (2005-2021), the seasoned chief expanded the Disney brand to become the single most powerful entertainment company in the entire world. By acquiring PIXAR Animation Studios, Marvel, and Lucasfilm, among other IPs, Iger led the charge to make the Disney brand synonymous with entertainment for all. Over the years, Disney has spent more than $87 billion on acquisitions, and almost all of the company’s 18 acquisitions took place on Iger’s watch.
Of those 18 acquisitions, most have been good for the company, with the exception of Disney’s acquisition of 21st Century Fox, which could be a reason for Disney’s ultimate downfall one day all on its own.
Now, however, Iger’s looking to downsize.
Last week, in what Bloomberg calls a “Disney yard sale,” Iger put almost one-third of the company’s intellectual properties up for sale though the Disney+ streaming platform, which includes programming from Disney, PIXAR, Star Wars, Marvel, and National Geographic, has not landed on the chopping block. Among the items on the fold-up tables at the proverbial yard sale are some of Disney’s linear television assets, which Iger has deemed “noncore” or not exactly essential to Disney’s overall success and growth. Those include Disney television networks, such as ABC, FX, and Freeform.
Credit: Disney Television Brands/Canva
Iger is also looking for a “strategic partner” for ESPN, but he says Disney won’t sell it all. The company is also looking to sell–or possibly restructure–its television and streaming enterprises in India.
Only time will tell whether Iger’s plan can work to right the financial ship at Disney, and if Iger can’t do it, who can? The answer to that question might also tell Disney who Iger’s successor should be.
