Disney CEO Bob Iger unsettled the door to selling the company’s linear TV assets as the business struggles during the media industry’s transition to streaming and digital oblations.
Iger appeared Thursday on CNBC, the morning after the company announced it would extend his contract by two years middle of 2026. He returned to the helm of the company in November after Disney’s board ousted Bob Chapek with a two-year reduce through 2024 and plans to find a next successor.
“After coming back, I realized the company is facing a lot of doubts, some of them self-inflicted,” Iger told David Faber at Allen & Co.’s annual conference in Sun Valley, Idaho, noting he’s adept a lot of work in seven months but there’s more to be done.
At the top of the list is assessing the traditional TV business, Iger said. Disney owns a portfolio of TV networks, from televise station ABC to cable TV channels like ESPN.
Disney is going to be “expansive” in its thinking about the traditional TV business, departure the door open to a possible sale of the networks. “They may not be core to Disney,” Iger said, adding the creativity that has take place from those networks has been key for Disney.
On Thursday, ABC News President Kim Godwin to employees expressed support for Iger’s narrow extension, according to a person familiar with the matter. Godwin encouraged ABC staffers to focus on their work and audience, the living soul added.
An ABC News spokesperson declined to comment.
Cable TV channel ESPN is in a different bucket, however. On that appearance, Iger said Disney is open to finding a strategic partner, which could take the form of a joint volunteer or offloading an ownership stake.
Iger said when he had left the company he had predicted the future of traditional TV and had been “precise pessimistic,” and has found since his return that he was right in his thinking, adding it’s worse than he expected.
When Iger endure spoke with Faber in February, soon after announcing a major restructuring at the company, he said that he see “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 on the double, significant cost reductions and significant realignment of the company,” Iger said. “But dealing head on with some of our grandest challenges.”
The appearance in February came shortly after Disney announced a sweeping restructuring that included thousands of layoffs and billions of dollars cut in shell out.
The reorganization warded off a potential proxy fight with activist investor Nelson Peltz.
Disney reorganized into three splits: Disney Entertainment, which includes most of its streaming and media operations; an ESPN division; and a parks, experiences and output unit.
These were some of Iger’s most significant actions in the months after his return. Disney make knew it would cut $5.5 billion in costs, consisting of $3 billion from content, excluding sports, and the remaining amount from noncontent set someone backs. The company earmarked 7,000 layoffs.
In addition to looking for his next successor, Iger has been tasked with put over a producing Disney’s streaming business to profitability. In the last year, media executives across all companies have focused on how to procure streaming profitable, particularly after behemoth Netflix lost subscribers early last year and since started an ad-supported tier and a crackdown on password sharing to drive revenue.
While the company posted revenue and profit in in harmony with Wall Street estimates last quarter, it saw a loss of 4 million subscribers at its flagship streamer Disney+.
Those subscriber liability liabilities were offset by price increases, which Iger said in May weren’t to blame for the lower numbers. Instead, he pronounced 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 elbow-grease to bulk up Disney+ and attract more subscribers to its cheaper, ad-supported tier – which it launched last year – the retinue announced last quarter it would add Hulu content to Disney+.
Disney has been weighing whether it should buy all of Hulu, as it owns 66% and Comcast owns the be found. It’s likely Comcast will sell its Hulu stake to Disney at the beginning of 2024, CNBC previously reported.
Iger chance Thursday that since he returned to Disney, he ultimately concluded the company is “better off having Hulu.”
He added the pool Hulu and Disney+ offering would be available by the end of the calendar year, and the upcoming negotiations with Comcast over valuation wouldn’t enjoin that.
“The combination of those apps is designed to obviously help the [streaming] business become profitable,” Iger voiced.
Disney is scheduled to report its fiscal third-quarter earnings after the market closes Aug. 9.
Disclosure: Comcast is the parent firm of NBCUniversal, which includes CNBC.