Bob Iger Has a Domestic Disturbance at His (Mouse) House

Robert Iger/PHOTO: Fortune Live Media (CC)

There is a lot of attention on The Walt Disney Company these days, and quarterly earnings reports draw greater scrutiny than (perhaps) ever, considering the political and “woke” crosswinds — amid profitability and stock price stumbles — that the formerly uncontroversial corporation now navigates under leftist CEO Robert Iger.

Captain Bob, off his yacht, emerged on Wednesday with his latest revenue revelations for shareholders and media. As usual, legacy outlet business reporters helped their beloved celebritive (celebrity-executive) mask the obvious anchor-drag that Iger’s woke priorities are having on the company and its stock price.

There are four areas to point to where the term “domestic” — i.e., operations and results in the United States, where “woke” and ESG are dirty words as opposed to the rest of the world — is clearly hurting Disney.

1. Streaming. From CNBC:

Subscriber losses continued over the last three months, with the company reporting 146.1 million Disney+ subscribers during the most recent quarter, a 7.4% decline from the previous quarter and a larger loss than Wall Street expected.

 

The majority of subscriber losses came from Disney+ Hotstar, where the company saw a 24% drop in users after it lost out on the rights to Indian Premier League cricket matches.

This is the second quarter in a row Disney has cited the “cricket” excuse. As NLPC stated in its filing with the Securities and Exchange Commission earlier this year before the company’s annual meeting, “Seriously – a multi-billion-dollar entertainment behemoth, with the most envied creative properties in the world, can’t overcome the loss of a few rupees because it can’t show Bowling for Wickets any more.”

The emphasis on overseas results — dutifully carried out by the corporate media — helped to downplay the fact that Disney+ lost 300,000 U.S. subscribers during the quarter. What’s the excuse domestically?

2. ESPN and “linear TV.” From the Wall Street Journal:

Disney’s troubled traditional television business continued its decline. The company’s so-called linear TV segment, which includes sports network ESPN, ABC and cable channels like FX, Freeform and the Disney Channel, saw operating income fall 23% to $1.89 billion, or about $100 million less than what analysts expected.

 

Once a reliable engine of profit for Disney, linear TV has seen its operating income plunge in recent years as more consumers cut the cable cord and switch to streaming video as their primary source of home entertainment.

ESPN is supposed to “lift all boats” when it comes to subscription television like cable and satellite, which is why it commands a high premium — reportedly close to $10 per subscriber per month — yet Iger-led Disney all of a sudden can’t make it work. Sports is supposed to keep consumers hanging on to linear. Apparently “woke” ESPN sports doesn’t, anymore. And if viewers are cutting the cord and “switch(ing) to streaming video,” why isn’t it Disney+ and ESPN+? Another CYA for Iger by mainstream media.

3. Theatrical releases. From CNBC again:

Disney has struggled to gain traction with audiences at the global box office in recent months. While “Avatar: The Way of Water” and “Guardians of the Galaxy: Vol. 3″ have generated more than $3 billion globally, other films have not performed as expected.

 

Pixar’s “Elemental,” which cost around $200 million to make, not including marketing costs, stalled at the box office, generating $423 million globally. Similarly, “Indiana Jones and the Dial of Destiny” cost around $300 million to produce, not including marketing costs, and has tallied just $369 million worldwide.

 

“The performance of some of our recent films has definitely been disappointing, and we don’t take that lightly,” Iger said on the call. “As you’d expect we’re focused on improving the quality of the films we’ve got coming up. It’s something I’m working closely with the studio on.”

Iger seems determined to destroy Walt’s legacy. Disney has had an unbelievable run of stinktacular releases. “Haunted Mansion” and the live-action “The Little Mermaid” are the latest unimaginative output from what is supposed to be a never-ending foundation of creativity. Under Iger, it’s the King of Moribund.

4. Theme parks. CNBC:

One bright spot for the company was its parks, experiences and products division, which saw a 13% increase in revenue to $8.3 billion during the quarter. Disney saw strength at its international parks, while domestic parks, particularly Walt Disney World in Florida, saw a slowdown in attendance and hotel room purchases.

“Bright spot” — LOL. It was only “bright” because its attractions in China were open this year after being shut down due to “zero COVID” last year. Meanwhile visitors to Disney’s domestic parks are down, but Iger wouldn’t reveal to investors how much. Headlines from July like “Why Disney World is So Empty This Summer” hint at actual truth.

Maybe having Bibbidi-Bobbidi-Nick greet little wannabe princesses is turning off would-be visitors.

And for this performance Disney’s entire Board of Directors thought they deserved re-election at this year’s annual meeting. Maybe voting shareholders will learn their lesson next year.