Disney CEO Bob Iger opened the door to selling the company’s linear TV assets as the business struggles during the media industry’s transition to streaming and digital offerings.
Iger appeared on CNBC on Thursday, the morning after the company announced it would extend his contract by two years through 2026.
Iger returned to the helm of the company in November after Disney’s board ousted Bob Chapek with a two-year contract through 2024 and plans to find a next successor.
On Thursday, Iger sat down with CNBC’s David Faber to explain his contract extension. The two spoke on site from investment bank Allen & Co.’s annual summer conference at the Sun Valley Lodge in Idaho, often referred to as “summer camp” for billionaires and media moguls.
“After coming back, I realized the company is facing a lot of challenges, some of them self inflicted,” Iger told Faber on Thursday, noting he’s accomplished a lot of work in seven months but there’s more to be done.
When Iger last spoke with Faber in February, soon after announcing a major restructuring at the company, he said he felt “a sense of obligation” to return to Disney and that his preference was to stay for his two-year contract.
“We’ve gotten a lot done very quickly, significant cost reductions and significant realignment of the company,” Iger said. “But dealing head on with some of our biggest challenges.”
The appearance in February came shortly after Disney announced a sweeping restructuring that included thousands of layoffs and billions of dollars cut in spending.
The reorganization warded off a potential proxy fight with activist investor Nelson Peltz.
Disney reorganized into three segments: Disney Entertainment, which includes most of its streaming and media operations; an ESPN division; and a parks, experiences and product unit.
These were some of Iger’s most significant actions in the months after his return. Disney revealed it would cut $5.5 billion in costs, consisting of $3 billion from content, excluding sports, and the remaining amount from non-content costs. The company earmarked 7,000 layoffs.
In addition to looking for his next successor, Iger has been tasked with bringing Disney’s streaming business to profitability. In the last year, media executives across all companies have focused on how to make streaming profitable, particularly after streaming behemoth Netflix lost subscribers early last year and since instituted ad-supported streaming and a crackdown on password sharing to drive revenue.
While the company posted revenue and profit in line with Wall Street estimates last quarter, it saw a loss of 4 million subscribers at its flagship streamer Disney+.
Those subscriber losses were offset by price increases, which Iger said in May weren’t to blame for the lower numbers. Instead, he said it showed room for further increases when it comes to streaming, and pushing customers toward the ad-supported tier, with the aim of reaching profitability.
In an effort to bulk up Disney+ and attract more subscribers to its cheaper, ad-supported tier – which it launched last year – the company announced last quarter it would add Hulu content to Disney+.
In May, Iger had attributed the move toward a one-app location for both Disney+ and Hulu content to the increased advertising potential of a combined platform.
Disney has been weighing whether it should buy all of Hulu, as it owns 66% and Comcast owns the rest. It’s likely Comcast will sell its Hulu stake to Disney at the beginning of 2024, CNBC previously reported.
Disney will report its fiscal third quarter earnings after the market closes Aug. 9.
Disclosure: Comcast is the parent company of NBCUniversal, which includes CNBC.
