WEBVTT - Chris Palmeri on Disney (Audio)

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<v Speaker 1>All right, but let's have a look at Walt Disney.

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<v Speaker 1>It's shares up the most and almost two years that after,

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<v Speaker 1>the company brought back former lead up Bob I get

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<v Speaker 1>to replace his successor, Bob J. Peck as a CEO.

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<v Speaker 1>Let's get to Chris peal Mary's he edited with Bloomberg

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<v Speaker 1>Media and the Telecoms team. Thanks for joining us here, Chris,

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<v Speaker 1>what do you make of this? Uh, well, it's a surprise. Uh.

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<v Speaker 1>You know, this had been a transition that had been

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<v Speaker 1>in the works for years. Uh. And Bob Chapick was

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<v Speaker 1>was Bob Iger's handpicked successor, but he clearly had a

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<v Speaker 1>lot of problems. He is a brusque individual who was

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<v Speaker 1>just never able to connect with employees. He obviously had

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<v Speaker 1>a very difficult time taking over right at the start

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<v Speaker 1>of the pandemic, but he didn't make life any easier

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<v Speaker 1>with his approach and the way he ran the company. Chris,

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<v Speaker 1>correct me if I'm wrong. Chap It came from the

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<v Speaker 1>theme park side, so maybe a lot of his skill

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<v Speaker 1>set was it was not suited to a lot of

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<v Speaker 1>the challenges the Disney is facing when it comes to

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<v Speaker 1>things like ESPN or the streaming side of the business.

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<v Speaker 1>That was one of the considerations. He's actually he's been

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<v Speaker 1>at the company for a long time. He started out

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<v Speaker 1>in the home entertainment, so he dealing with you know,

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<v Speaker 1>actually videotapes back in the day. Then he ran consumer products,

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<v Speaker 1>all the merchandise there, and then as you noted, that

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<v Speaker 1>ran the theme parks, and and most of the analysts

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<v Speaker 1>sort of agree he actually did a terrific job at

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<v Speaker 1>the theme parks. Almost too good, he was. His tenure

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<v Speaker 1>is going to be sort of most noted for really

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<v Speaker 1>increasing prices. Uh, not a happy scene among the Disney

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<v Speaker 1>theme park loyalists. He required reservations, he raised ticket prices.

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<v Speaker 1>He started this new line cutting the system that you

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<v Speaker 1>have to pay extra four so you know, we could

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<v Speaker 1>add another forty dollars on top of your hundred and

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<v Speaker 1>eighty dollar theme park tickets. So you know a lot

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<v Speaker 1>of really dramatic price increases that have made the business

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<v Speaker 1>for profitable but not beloved. All right, Well, I mean

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<v Speaker 1>the thing is he was above Bigo was uh, I

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<v Speaker 1>me think he was the chairman not too long ago

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<v Speaker 1>of Disney and also see of course naturally as we

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<v Speaker 1>know here, but you know, in the time he's been away,

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<v Speaker 1>the landscape has changed so much. Do you think he's

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<v Speaker 1>got the right tools to turn Disney around. He is,

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<v Speaker 1>you know, widely regarded as just about the best media

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<v Speaker 1>executive in the business. And if you look at the

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<v Speaker 1>dramatic growth Disney had up until he left, you know,

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<v Speaker 1>with the launch of Disney Plus, you know, was all

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<v Speaker 1>his idea that you know now has you know, two

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<v Speaker 1>hundred million subscribers worldwide, lull of their streaming businesses. Um,

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<v Speaker 1>you've got um, you know, all of the acquisitions he

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<v Speaker 1>did with Pixar, Marvel, lucasfilm Box. So he's he's a

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<v Speaker 1>very creative guy, has good relations with all the talent

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<v Speaker 1>and the talent agencies. But yeah, this is a challenge

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<v Speaker 1>that one of the reasons Rapeck is out is because

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<v Speaker 1>the streaming V business lost one point five billion dollars

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<v Speaker 1>in the mostly some quarter. Uh that's a lot of

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<v Speaker 1>money for any company. And he has Tiger has to

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<v Speaker 1>navigate this transition between the traditional TV world, which is

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<v Speaker 1>you know, people are watching less and less into this

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<v Speaker 1>new streaming era and do it profitably. Um. But you know,

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<v Speaker 1>nobody sort of doubts that if there's anybody you can

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<v Speaker 1>do it. It is Bob Eyer. It's kind of interesting

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<v Speaker 1>because when you look back, before Mr Iger took the

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<v Speaker 1>reins back in I think it was September two thousand five,

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<v Speaker 1>Michael Eisner ran this company and he was pushed out,

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<v Speaker 1>I believe at the time. And Eisner was regarded as

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<v Speaker 1>a very effective CEO. But at some point, when the

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<v Speaker 1>market starts moving against you, you have to be reactive.

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<v Speaker 1>That's it. And you know, Eisner's also had you know,

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<v Speaker 1>particularly in his first ten years or so. Uh, he

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<v Speaker 1>did a terrific job growing to business, both the theme parks,

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<v Speaker 1>you know, made the acquisition of Capital City's ABC that

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<v Speaker 1>gave the company ESPN, you know, which was a huge,

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<v Speaker 1>huge profit generator for years. Uh, it's just you know,

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<v Speaker 1>stayed a little bit too long for a lot of

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<v Speaker 1>people's comfort. Uh, things started going south and and that's

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<v Speaker 1>when I stepped in, you know, But it was it

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<v Speaker 1>was once again, it was very dramatic succession. Eisner did

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<v Speaker 1>not go up quietly. Well, absolutely, that's it here as well, Chris,

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<v Speaker 1>you know what happens next? What are the metrics that

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<v Speaker 1>what has he got to deal with? First of all,

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<v Speaker 1>what's on it to do list? We're already seeing some

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<v Speaker 1>of the action. Today he announced that he was essentially

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<v Speaker 1>ondoing this very unpopular move that Chapek had made internally,

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<v Speaker 1>which Chapeck decided that everybody on the creative side and

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<v Speaker 1>the traditional TV business to film studios and that uh

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<v Speaker 1>needed to report to this one central authority which was

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<v Speaker 1>going to be in chargeable business decisions, whether it's ad sales,

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<v Speaker 1>what movies to make, what channels or streaming services to

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<v Speaker 1>put TV show on. And you know this rankled the

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<v Speaker 1>traditional studio heads and network chiefs who used to have

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<v Speaker 1>that authority, and you know they were all listening to

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<v Speaker 1>this this other business unit headed by this one individual,

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<v Speaker 1>and uh so Iger fired him today Kareem Daniel and

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<v Speaker 1>said that he's going to reconnect with all of the

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<v Speaker 1>traditional head of the film studio, head of the TV business,

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<v Speaker 1>head of ESPN and figure out a new corporate structure

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<v Speaker 1>which will probably look a lot like the old one,

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<v Speaker 1>where you have these individual managers responsible for their own

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<v Speaker 1>decisions both a business and a creative standpoint. But I'm

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<v Speaker 1>wondering whether or not part of his strategy will include

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<v Speaker 1>exiting or at least reducing some of the company's exposure

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<v Speaker 1>in certain business lines. We were talking earlier with one

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<v Speaker 1>of our guests who was saying that maybe Hulu, for example,

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<v Speaker 1>could be viewed differently as Iger returns to UH the

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<v Speaker 1>CEO role. I'd be really surprised of that wor the case. Remember,

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<v Speaker 1>Hulu UM is the company's interested who lose significantly increased

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<v Speaker 1>under Iger's presence. You know, it went from to sixty

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<v Speaker 1>three and then he negotiated the option to acquire UH

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<v Speaker 1>Comcast one third UH and and you know that's a

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<v Speaker 1>deal that they already have a contract on. Their question

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<v Speaker 1>right now is just what price. I think that Hulus

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<v Speaker 1>is very much a piece of this overall puzzle, the

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<v Speaker 1>streaming service. It's very popular, it's got a lot of

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<v Speaker 1>really good shows, and most likely after Disney acquires that

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<v Speaker 1>other third, they're going to integrate it more fully into

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<v Speaker 1>the Disney Plus product. Which if there's a criticism of

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<v Speaker 1>Disney Plus, it's that it doesn't really have enough for adults,

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<v Speaker 1>whereas Hulu that's exactly you know what what they have.

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<v Speaker 1>So I think you'll you'll see who more fully integrated

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<v Speaker 1>into the Disney streaming business. Underwriter, Well, the market seems

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<v Speaker 1>to like this news, as Disney shares rallied by more

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<v Speaker 1>than six percent today on news that Bob Iger will

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<v Speaker 1>replace his successor, Bob Chapick A CEO. Chris Maul Paul Mary,

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<v Speaker 1>thanks so much for being with us. Chris a senior

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<v Speaker 1>editor with Bloomberg's Media and Telecom team,