Bob Iger’s First Quarterly Report Since Return Looms: What Does It Mean for Disney?

The return of Bob Iger to the helm of Disney generated a ton of positive press for the company- but as we know all too well, positive can flip to negative very quickly. There’s a ton of speculation flying around about pending corporate restructuring (and layoffs) in Disney’s future. Our local entertainment lawyer and industry expert, Brandon Blake of Blake & Wang P.A, weighs up what we know.

Changes Ahead

Let’s be honest- there’s a lot of pressure on Iger currently to enact a magical rebound for the House of Mouse. So it’s natural that rumors about new organizations and potential layoffs are rich in the air. Their current focus is on some form of rework/consolidation for their greater marketing efforts, and potentially some knock-on effects for Disney TV Studios. With the company’s next earnings report due to be delivered on February 8, many are expecting these announcements to coincide, or at least come in close together.

What About Disney Media and Entertainment Distribution?

We’ve already seen a rather swift dismissal from Iger for DMED chairman Kareem Daniel- nor is it exactly on the down low that Iger is no fan of the centralized distribution channel model this new division created under Bob Chapek. It’s been a controversial development, often accused of removing needed decision-making powers from the company’s creative leadership. It’s probably a given that it will be dismantled at this point- the question is when, how, and what it means for the remaining executive leadership of the branch. For example, Debra O’Connell (currently president of Networks for DMED) and Chuck Safler (head of business operations) are both highly respected within the Disney framework. Not obvious candidates for pink slips! Will they be returned to other departments, then?

Disney Television Studios asks similar questions. Covering all their development arms with the exclusion of FXP and Searchlight TV, which remain separate, people have been asking if (what was) ABC Studios and 20th Century Fox will remain separated since the Fox-linked assets were acquired. A few tweaks and rebrands later, they’ve more-or-less remained separate- but consolidation talk is getting stronger and stronger.

There’s been a spate of Hollywood layoffs in the last few months. Disney is unlikely to be a mass-generator of more, no matter what path forward they take. If layoffs occur, we can expect smaller, more targeted layoffs, and likely focusing on executive layers. Iger has already succeeded in soothing some of the bad blood with the Parks, Experiences and Products division as it is. But linear TV continues to decline, streaming is no longer the slave to all financial woes it was briefly seen as, and the economy is fragile at best, with advertising revenue suffering too. And most of their on-book losses sit in DMED’s hands right now. Fixing that will be necessary if the downward decline of their stock price is to be righted. And that’s likely to be their No 1 priority going forward- most of Disney’s current woes stem from activist investors and shareholder grumbling. For now, we can only wait and see how that works out in practice.