Walt Disney Company stock rises ahead of shareholder meeting
Yahoo Finance’s Allie Canal joins the Live show to discuss the expectations for Disney’s shareholder meeting following Bob Iger’s return as CEO, job cuts, dissolving its Metaverse division, and the outlook for Disney.
JULIE HYMAN: We are watching shares of Disney this morning. Shares up a little more than 1%. The company's first round of layoffs are underway. Let's get a closer look at CEO Bob Iger's strategy ahead of Monday's shareholder meeting. Yahoo Finance's Allie Canal joins us. Now, shareholder meetings do tend to be a rather friendly affair, typically. I wonder what this one is going to be like and what he's going to say to them.
I know. Me, too. And this is very anticipated. Iger, he came back to the company end of November. And already, he's enacted some pretty serious layoffs at the company. You mentioned 7,000 jobs are going to be eliminated by this summer. That's going to happen in three rounds. The first round is underway this week. Second round will be the largest in April, and then the third round right before the summer.
Now, as part of this first round happening this week, we saw Disney dissolve its Metaverse division, along with the exit of Isaac Perlmutter, who was the chairman of Marvel Entertainment. This is separate from Marvel Studios, Marvel Entertainment responsible for consumer products, comic book publishing. So layoffs a clear part of Iger's strategy. Bob Iger has stressed that he wants to get this company back on track. He wants to make sure that Disney+ can hit its profitability target by 2024.
And on the topic of streaming, Iger has made it clear that he is a fan of differentiated content, not general entertainment, which has suggested that Hulu might be on the chopping block. This is a clear turn from what we saw in the past when everyone largely thought Disney would buy out Comcast shares in Hulu. Disney currently owns 2/3 of the company, Comcast controlling the rest.
But now it seems like Iger might want to do away with Hulu completely. Macquarie analyst Tim Nollen was out with a new note this week saying that Hulu's future might actually be tied to ESPN'S future and Iger's desire to make ESPN+ a full over the top platform, so perhaps taking that money from a Hulu sale and dumping that into ESPN. Iger has made it clear that he is a fan of ESPN. He restructured the business into three different divisions-- entertainment, ESPN, and parks.
So when the next earnings report comes out, we will see subscriber numbers. We will see revenue for all those three divisions. So, you know, a lot of questions on the table heading into this shareholder meeting, but so far, investors seem confident in Bob Iger's plan. The stock is up more than 5% since he took over the company and up more than 12% year to date. So we'll see if Bob Iger can keep up this momentum, but Wall Street clearly loves him.
BRAD SMITH: And then another kind of Disney surrounding story, the latest on governor-- Florida governor Ron Desantis's attempt to gain control of Walt Disney World's governing board in Florida, a little bit of a roadblock there.
ALLIE CANAL: Yeah, and we'll see if this comes up at the shareholder meeting. Iger hasn't really talked about this too much. He did briefly bring this up during an employee town hall in January, saying there's still more research he had to do since the drama of this all happened before he came to take over the company. However, there were several developments this week with the current oversight board. This was a board hand-selected by Florida governor Ron Desantis, accusing the previous board of passing a last minute agreement with Disney that created a loophole to essentially strip them of their power.
Now, this last minute bill was signed February 8, so just one day before this new committee was appointed, and transferred much of the power to Disney. There was a copy of this agreement published by the Orlando Sentinel. And according to the document, Disney can veto any major changes to the parks. It prohibits the board from using Disney's name or characters, like Mickey Mouse, without the corporation's approval. And it also invoked something called a royal lives clause, which lives in perpetuity or until, quote, "the death of the last survivor of the descendants of King Charles III, King of England, living as of the date of this declaration." This was an actual quote in the agreement.
Now, Disney gave a statement to the Associated Press saying all agreements signed between Disney and the district were appropriate. Yahoo Finance did reach out to Florida governor Ron Desantis and Disney for comment, but has yet to hear back.
JULIE HYMAN: Did you reach out to King Charles for comment?
ALLIE CANAL: I should have. I should reach out to the royals, get them involved. I mean, what does this mean for them coming to Disney? Maybe they'll get some free passes. Who knows?
BRAD SMITH: Oh, maybe. Red carpet for sure.
ALLIE CANAL: Exactly.
BRAD SMITH: Allie Canal, thanks so much for breaking down all things Disney for us here today.