A lot has happened since Bob Iger took over as CEO of The Walt Disney Company once again.
But, it’s the future most people are concerned about. Iger was hired to restructure the company, and we’re still in the dark about what exactly that means. Disney stock prices have dropped to a nearly 50-year low, several executives have left the company, and Iger may start making moves sooner than we think — reversing a huge decision made by former CEO Bob Chapek.
Bob Iger is back at Disney, and experts are expecting big changes. According to Wells Fargo analyst Steven Cahall, spinning off ESPN and ABC may be “the best path forward” for The Walt Disney Company. Disney stock was trading at $85.78 on December 20th, a 52-week low and over 40% drop overall this past year.
But getting rid of ESPN and ABC “would leave Disney as an attractive pureplay IP company,” Cahall shared.
“We also think investors are increasingly put off by trying to determine how fast linear networks — most of which is ESPN/ABC — is declining as direct-to-consumer (DTC) profits improve. The seesaw creates a constant headache. Spinning ESPN/ABC provides price discovery for the asset at a Fox-esque multiple of 6-7 times enterprise value/earnings before interest, taxes, depreciation and amortization (EBITDA), and then lets remaining Disney be more of a pureplay on global IP and streaming.”
Could this be the potential “big change” Iger is going to make to restructure the company? Cahall shared with the Hollywood Reporter that in the short term, Iger and his team will most likely “focus on content and cost rationalization.”
But, for the long term, Cahall expects “a deeper think on portfolio reshaping.” Iger played a huge role in making the Walt Disney Company what it is today, but spinning off ESPN and ABC would be “increasingly logical,” per Cahall.
This separation could have multiple benefits, as Disney would be able to move forward with an IP strategy while ESPN focuses on how to monetize sports. Cahall added that he thinks this spin off is a “reasonably probable event for late 2023.”
Whether or not Iger does what analysts are expecting and does offload ESPN and ABC remains to be seen, but we’ll continue to keep you updated.
To learn more about Bob Iger’s return, check out:
- Disney Announces “Organizational and Operating Changes” As a Result of Bob Iger’s Return
- “They Brought This on Themselves” — Governor DeSantis Responds to Disney CEO Bob Iger’s Comments on Florida Legal Battles
- Will Bob Iger Reverse Bob Chapek’s Decisions?
- Disney CEO Bob Iger Comments on Reedy Creek and & Don’t Say Gay Controversy
- CEO Bob Iger Comments on Disney Park Pass Reservation System
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The post Disney CEO Bob Iger Could Make HUGE Change, Reversing Chapek Decision first appeared on the disney food blog.