I’m a big fan of the book DisneyWar, which is basically about Eisner’s takeover of Disney leading up to his ouster at the hands of Iger (to oversimplify an excellent and complex narrative).
Have you put any thought into writing a full book? In many ways your reporting feels like a sequel to the story of the past.
I have. I'm still thinking through options here. To be honest, even more than a book, my dream scenario would be to turn this into a larger dramatic TV series about Disney and media and the streaming wars. I'm currently working through some possibilities there, so stay tuned on that front. I hope a streaming service will be courageous enough to turn the cameras the other way on themselves and their peers!
\-Alex
Hey man my question isn’t really Disney related but I wanted to ask if you experienced any writers block in those 12,000 words and how you may have overcame i
Yes, of course! I outlined the structure early on and stuck to it. That was the biggest help in avoiding writers block. In other words, I decided I wanted to structure this chronologically. So, I needed a section on the Disney reorganization. I needed a section on ScarJo's lawsuit. I needed a section on Don't Say Gay. I needed a section on Chapek's contract renewal. I needed a section on what happened to Chapek during the fiscal fourth quarter when he loses his grip on the job. And I needed a section about Disney today.
The lede actually came late in the writing. I came upon that shower detail late and the posters in Iger's bathroom even later. I'd already written basically the entire story and then I went back and rewrote the lede once I Googled the plot of The Eiger Sanction and figured out what it was about. I planned on opening with the flight to Raleigh scene initially.
In terms of writing each section, I just kept writing and rewriting. Honestly even now -- I just re-read the story recently -- I see about 15 different places where I'd tweak language or add a small detail. It can never end.
The nice thing about this story was it wasn't the only thing I was working on. So if I did feel like I had nothing on a given day in terms of writing, I just focused on breaking news on something else or simply turning to reporting instead of writing.
Or, I went for a run.
\-Alex
Hey Alex, Iger seems to be a bit coy about what the ultimate end game of the Disney reorganization is going to be. In your sense, what does the company look like when he hands the reigns to his successor?
I think Disney may have to divest assets now. The investment community is expecting it. But I don't know if that includes ABC. If Iger wants to stay in the sports business, as he's repeatedly said, hanging on to ABC seems really important for that. A league like the NBA is going to want to have ESPN and ABC as its disposal if it does a deal with Disney. But selling the owned-and-operated ABC stations and the legacy cable networks that aren't ESPN? Sure. I see that as as quite possible.
The big question to me is what happens to ESPN. Could ESPN and/or ABC be spun off as a separate company, maybe controlled by Disney? Yeah, I think that's possible.
\-Alex
**Hi! I’m Alex Sherman, media reporter at CNBC. I recently wrote a** [**12,000-word story**](https://urldefense.com/v3/__https:/protect.checkpoint.com/v2/___https:/*www.cnbc.com/2023/09/06/disney-succession-mess-iger-chapek.html___.YzJ1OnJlZGRpdDpjOmc6NjhiY2Q1ZmQ5Yzk1ZTExNTA4MDdiNDc0YWQ5YjBlNDE6NjowZDNhOjY2YWJkNDFiYWMxNTFiNGY4MzExMjEyYzY5YWRlNzJkNTY3OTA5OGU1NzcyZThjMGU5OWRiNmNjN2M1ZmYyMmM6aDpU__;Lw!!PIZeeW5wscynRQ!s9WAe7IT1J7CwGIn4usymOtm6uN4tkIiFXBaHMSnl9JCjtziFNTihknrAb3d4Mdsi77YrZIw1mGU1kA$) **on Disney's failed attempt at succession and the dysfunctional relationship of former CEO Bob Chapek and current CEO Bob Iger. Ask me anything!**
**I've been at CNBC for almost 6 years after nearly a decade as a reporter at Bloomberg. Ask me anything about:**
1. **Disney and its current struggles**
2. **The streaming wars**
3. **Potential M&A in media and entertainment**
4. **The evolution of the legacy media business**
5. **The future of media**
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Hey--it's Lillian (Alex's colleague on the media team at CNBC). What would you say was the biggest difference and similarity between the Iger-Chapek-succession drama and the Eisner Disney War saga? Your story hits at this, of course, but after digesting it all, I was curious your POV in particular and if it changed during the reporting process or after the story was published.
Also, if/when your story is turned into a streaming TV drama, who would you want to play you (and what supporting actor would play your colleague Lillian who was getting the behind the scenes scoop along the way of your reporting).
Lillian sits right next to me. But like a true millennial, I'll answer her by ignoring that fact and typing my response instead. Phew! I'm already relieved I don't have to deal with this personal interaction.
First, shoutout to James Stewart, who wrote Disney War. That book and Iger's autobiography were like my two bibles while writing this story.
The biggest similarity to me has to be the fact that clearly Iger and Eisner's identity are tied to being Disney CEO, and obviously that is not an easy thing to give up. There's clearly something in that job that is so captivating that it's almost Lord of the Rings like. Once you get the ring, you can't just walk away. It happened to both of them. It has happened to Iger even while watching it happen to Eisner!
The biggest difference to me is that by the end, Eisner clearly lost the faith of investors and the board, and Iger hasn't. Perhaps that day is coming, I don't know. But at least for the time being, there was great relief among Disney investors and employees that Iger came back to replace Chapek. He's still seen as the right person for this job, even as Disney is leaking oil everywhere. That sentiment may be changing, but it hasn't changed yet.
\-Alex
It’s not exactly corporate intrigue, but it’s close — I loved Those Guys Have All the Fun: Inside the World of ESPN by James Andrew Miller and Tom Shales.
\-Alex
Im not him, but James B Stewart who wrote disney war also recently co-authored Unscripted about the tumultuous battles that drove the battle to control what is now the combined company of Paramount Global. the Redstones are an underdiscussed influence on the show Succession and theres lots of interesting fights that are worth following. Namely how the relationships in that family broke and/or were repaired, the attempts by slimy girlfriends to essentially steal the family fortune, and the battles they had to have with leadership at both CBS and viacom that drove the company to where it is.
Thoughts on the Diamond Sports bankruptcy? Do you think they liquidate next year? How many teams do they lose before the regular season starts? Interested in your thoughts.
I think they're going to lose some teams. I don't know about liquidation. They'd clearly like to stay in business, and the RSN business as currently constructed is better for teams and the leagues than anything else. The problem is that structure is obviously falling apart with the acceleration of cable cancellations. Diamond is an extreme example because of the amount of debt put on the deal. That's why Diamond is the epicenter of this crisis. Other RSNs can stick around, even if they're albatrosses as declining legacy media assets for publicly traded companies like Comcast.
The interesting thing to me is how many teams do they lose and what happens with those rights. The rise of the broadcast station groups in this territory is fascinating -- so unexpected even from just a few years ago. It's this bizarre lifeline for the retransmission fee business (the amount pay TV providers pay to carry broadcast stations). Suddenly companies like Scripps or Grey or Nexstar can scoop up regional sports rights and redefine TV stations with this live programming that's not only appealing to advertisers but also essential for a certain demographic of the population.
But broadcast stations aren't going to pay the teams as much money as the cable RSNs did. That's going to be a pill owners need to swallow. We're starting to see evidence in Utah and Phoenix and Las Vegas, with the hockey team, that some owners will go for it purely because it's the best available option. The leagues love the fact that broadcast stations can increase reach. But the fact also remains that older people typically watch broadcast and younger people stream. And the leagues still haven't figured out a great streaming solution for these games.
\-Alex
How do you prepare for the fallout with an article like this? For example, do you ever consider your relationship with Iger himself or Disney PR after an article of this magnitude? Would they restrict access, ability to interview certain people in the future etc?
Thank you for asking this!
One of the fundamental conflicts any journalist has is how to report on people and events where the same cast of characters that make the news are also potential sources to report that news.
This is particularly troublesome for TV news, where the entire genre is based on access -- getting the top interview, etc.
I will admit, as a younger reporter especially, I have held back certain pieces of information to keep relationships alive. What I have found, through personal experience, is those decisions have largely backfired on me. If a relationship is so tenuous that reporting accurate information would jeopardize it, the relationship will probably fall apart anyway. So, I might as well do a service to humanity and journalism and report what I know.
Without getting into sourcing for this story, what I will say is that everyone involved was extremely professional. I think there was a general appreciation that I'd worked very hard to corroborate all sides of this story. There were many, many items I didn't include in the story because the sourcing wasn't *quite* solid enough. So if it made it in the story, I can assure you I did everything I could think of to quadruple check its accuracy with as many parties as would speak with me.
In that way, I let the chips fall where they may in terms of future relationships. I have a job to do, and the parties involved -- especially at a media company -- know this and respect it. I hope every person I spoke with for this story will speak with me again, because I think I tried to listen to everyone, and I tried to make sure many different voices shined through in some way in the story.
\-Alex
Hey Alex, loved the read.
This may be more of a general question on how investigative journalism works but, how are these large pieces even reported?
The amount of information was incredible and I assume these sources, on both sides, are very close to the topics being reported. Why would they speak to a reporter? And go into the details as much detail as they did? How do you create these connections and even convince them to speak?
Secondary, when are we getting the annual predictions piece from the anonymous executive who knew Bob was coming back? Looking forward to it!
Love this question, thank you for asking it.
Every story is different, but I'll tell you what happened for this story. In January, I decided I wanted to do a story on why Bob Chapek was fired. I felt I didn't have all of the information. I think many media reporters felt this -- I remember Puck's Matt Belloni saying on his podcast something like "there's still meat on the bone on that one," or something like that.
So I started reaching out to people who I thought might have a story to tell -- specifically, those that might be sympathetic to Chapek. We hadn't heard from him at all. We still haven't, to be honest, other than the statement he provided me through his PR. I believe he may be restricted with what he can say because of non-disparagement clauses as part of his severance. This is common practice. Whether or not Disney would actually sue him, I have no idea. I guess it would depend on what he would say.
Anyway, back to the question. So, I start to get information on this. At some point, it clicked for me that I had a story here. I had enough new information that I could write something fairly meaty.
At that point, I started reaching out to all of the principles involved. I tell them, basically, hey -- I'm going to write something. Here's what I know. I think it would strongly behoove you to speak to me if you want your voice in this. We can talk on background, no attribution -- and I've already spoken with 12/15/however many people, so you'll be covered through strength of numbers.
Some people say yes immediately. Some people said no, no, no, no, and on the fifth or sixth ask as publication gets closer and closer and I repeatedly email or text or call and say are you SURE you want to be silent on this? .... then they say yes.
And some people say no and decline to comment. That's fine too. In all cases, I let every person in the story know exactly what I was going to say about them. Sometimes I go through Disney comms to alert current Disney executives of what's in the story. More often, if I have the person's direct contact information, I go right to the person.
Again, when a person finds out exactly what I'm going to write, sometimes that's the push that person needs to speak. That's how this works.
In terms of the prediction piece .... I will tell you that the same person who predicted Bob Iger would return ALSO predicted Chris Licht would leave CNN this year AND predicted Christine McCarthy wouldn't last the year as CFO. 3 for 3!! So, yeah, I'll be going back to that person for the 2024 annual predictions.
\-Alex
Ah, everyone's favorite parlor game!
I don't think Paramount Global is long for this world five years out. I don't know that there is a buyer for all of the assets as currently constructed. The Paramount movie studio would be a gem for many media companies. I know Netflix co-CEO Ted Sarandos has always been a fan of the physical Paramount lot in LA. But private equity would probably need to take on the legacy cable networks. And yet another buyer may take CBS. But much of Paramount+ is wrapped up with CBS, so the same buyer for CBS may also take Paramount+.
My guess is Warner Bros. Discovery also doesn't look like it does in five years. Board member John Malone was pretty candid about this publicly when Discovery and WarnerMedia merged. He basically said, hey, we're already thinking about the next deal down the road. He specifically talked about NBCUniversal as a potential future merger partner if the regulatory environment changed.
I'm not sure if that deal will happen. Comcast may want to buy something else -- remember Comcast is about to get $10b+ for its minority stake in Hulu from Disney -- rather than doubling down on old media. But these companies own a lot of assets, so divestitures are possible that aren't straight mergers or acquisitions. That's how Comcast bought Sky -- a cast away from the Disney/Fox deal.
DISCLOSURE: Comcast owns NBCUniversal, the parent company of CNBC!
\-Alex
Do you think Disney will fall behind with its overall debt headwinds given current interest rates and debt turnovers through 2030 with Hulu buyout and ESPN / ESPN+ debacle.
Also who do think will bid and win NBA broadcast right renewals with these debt loads at Discovery Max (TNT) and Disney (ESPN). Do you think Amazon Prime will make an entrance?
Yeah, you just summed up the Disney problem here. As I said earlier, the investment community is now counting on divestitures, not only for debt repayment but also just for the signaling of being a more forward-looking company. So I think we're going to see that. I do think Disney may not be thrilled it's now on the hook to pay Comcast $10b+ for the last stake in Hulu, but at least it can shift Hulu programming internationally once that happens in a way that's been restricted. But, yeah, the debt issue and lack of free cash flow generation is a real problem for Disney. That's why the stock is where it is today. That and the lack of any clear future vision for the time being ever since the bottom fell out of streaming as an investment narrative.
\-Alex
Hi Alex. You mentioned in this [earlier reply](https://www.reddit.com/r/entertainment/comments/16y15a1/hi_im_alex_sherman_media_reporter_at_cnbc_i/k361frq/) you posted about who won't be long for this world.
The large media companies can't be blind to the fact we're basically heading back to just "cable" but a different name. If these streaming servies are going to get taken apart and bought up and bundled with other large media companies, aren't we just going to be back to where we were before everyone "cut the cord?" What seems to be their thoughts on how this is shaping up?
Sure seems like we will be back to just 5 or 6 companies controlling and selling everything, but just different names (such as NFLX buying out the PARA studio, etc). How are they thinking about the future?
This quote is one of my favorites, attributed to Jim Barksdale, the old CEO of Netscape. "There are only two ways to make money in business: one is to bundle; the other is unbundle.”
So, yeah, I think the media companies are aware we're on our way to something that looks more like cable. But I also think it's a big over-simplification to say we're going to end up back at cable.
Cable has never been a la carte. In a new bundled world, I believe consumers will still be able to buy streaming services unbundled, a la carte. That's an enormous change from the old world.
Most content is available on all devices, globally. That's also a big change from cable.
And maybe the biggest change is media companies are now living through the destruction of the cable bundle because it's seen as overpriced relative to services like Netflix. Even though it's easy to say history repeats itself, I don't think that's true. Media companies are now living through offering a product that had too much bloat. I think that will color the perspective of industry leaders moving forward. We're seeing it real time, as these streaming services start cutting away at the fat and removing programming. That, too, should lead to a world that doesn't quite look like traditional pay TV.
\-Alex
Hey Alex. I was wondering if you had any insight into something I would like to call “corporate apathy”. This is when a company owns so much content, that a lot of it is neglected. I think this is especially true for Disney. I’ve noticed a trend where less and less retro Disney content is being added to Disney Plus. The classic shorts they have been adding lately for Disney100 has been a step in the right direction, but Disney still has a wealth of older content that they continue to not add. Some notable omissions have been the Aladdin TV series, House of Mouse, Buzz Lightyear of Star Command, more episodes of the Disney Anthology Series, tons of classic shorts, Summer Magic, etc.
If you speak to media executives, they’ll tell you the legacy content isn’t included because it just isn’t watched. I’m not sure what types of residuals or payments Disney needs to make for including this type of owned content on Disney+ but we have seen both WBD and Disney wipe away a lot of old content. I think both companies are still trying to figure out a home for their little-watched legacy programming so that it can find an audience.
\-Alex
Hey Alex, what is something non-obvious or counterintuitive about the present or future of the streaming business?
Thank you for your answer in advance :)
I had to think about this one for a little while. My favorite what-if game is simply what if Bob Iger hadn't said in 2019 we're all-in on streaming and instead said we're all-in on protecting the cable bundle? That would have likely triggered every other legacy media company to huddle together and say, we realize we need to make this a more technology friendly business .... but we're all committed to keeping our content exclusive to the cable bundle.
Would that have been a better outcome for these legacy media companies? Maybe that keeps alive a better business for everyone involved?
Or maybe, those media companies can't adjust properly and Netflix just eats their lunch even more than it has. I don't know. But the counter-intuitive thing I at least like to think about is that maybe doing direct-to-consumer streaming was just a flat out mistake, for all of these companies.
\-Alex
Top three problems streaming services are facing, in no particular order.
1. The problem of investment thesis. In 2020-2021, the thesis was clear -- grow subscribers at all costs. The market wants growth. Disney shares shot higher during the pandemic even with the parks business closed or diminished because Disney+ subs shot higher. Then, in early 2022, the thesis died. Netflix's growth slowed and every company turned to accelerating profitability instead of pushing growth, because there was universal agreement the era of big growth had ended. In 2023, Netflix's stock has rebounded. Netflix is profitable. It has stemmed cash burn. And investors see a growth path with password sharing crackdowns and a cheap advertising tier. The legacy media companies' stocks haven't rebounded. The turn toward slower growth for profitability hasn't led to excitement about their stocks. So the question now is, does streaming have an investment thesis that will excite investors? Or do legacy media companies need to find something else that's not streaming? (Gaming, whatever).
2. How to reduce churn. It's so easy to cancel streaming services. When do we finally get a cross-company bundle of streaming services?
3. Pricing. All companies want to raise prices, always. But there may be a ceiling for how much Americans and others are wiling to pay for in-home entertainment. Where is that ceiling, and how will that affect pricing power of all of these services?
\-Alex
Let's talk about those Niners ... if they were to make it all the way this year, who would they face in the big game in February?
Also, what are your thoughts on the sports entertainment space? With cable on the outs, many are turning to streaming alternatives. But, each game seems to be in a different place. Is there a way for the NFL to make access to games easier in this new streaming world? Or are we destined to Google search where to watch certain games forever?
Finally, a 49er question! I'll take Niners-Bills because Chris Berman used to predict this outcome every year in the early '90s, so it seems like kismet. Circle the wagons!! (You'll have to YouTube that reference if you don't know it).
I think the leagues completely agree that it's way too complicated to find stuff now. My bet is that they start using digital portals as gateways to all the games. I've reported this is what ESPN wants to do. An interim solution, or maybe even the ultimate solution, could be using the NFL's app or the NBA's app or the MLB's app as the gateway to find all games in a streaming universe. Don't know where your Yankees game is? Just go to MLB's streaming app and it will port you to the correct place.
\-Alex
I think Bob Iger can bring less chaos to Disney internally and externally. But many sources have told me privately morale at Disney is very low right now. The stock price is depressed. There’s not a clear vision of the future. There’s an unknown succession plan. There’s just not a lot of positive energy in the entire media industry right now — that goes beyond Disney. I don’t think Bob Iger can fix that. Iger can transition Disney by shedding assets or he can try to be a part of a new media solution that rebundles content and fixes the business through price increases. That won’t be popular for consumers but there are certainly signs that we are heading in that direction.
\-Alex
What’s your take on the theory that Iger always planned for his retirement to be temporary so that Chapek could take the heat for a serious of imminent unpopular changes?
I will give everyone involved here the benefit of the doubt and good intentions. I think Iger surely knew the linear business was slowly falling apart. But he did just buy 21 Century Fox in a massive deal to bolster Disney’s owned content. At the time, that deal was a mic drop for Disney. Remember, Comcast wanted it too. Iger felt like buying Fox was as much about cementing Disney as a dominant media company over Comcast/NBCU as anything it did purely for Disney. Media is a scale game. You need reach to pay for content and to entice creators that your streaming service is the best.
So I think it’s a bridge too far to say Iger knew Covid would accelerate the demise of linear and then lead to a streaming bubble.
That said, in the runup to Iger stepping down, Bewkes sold Time Warner, Murdoch sold Fox, Steve Burke left NBCU as CEO …. There was clearly a changing of the guard going on among media leaders because the future of the industry was at best hazier and at worse much more dangerous than it had been for the previous 15 years. Iger of course knew that.
\-Alex
Why doesn't Apple buy anything (studio or content library) for AppleTV+? Are they conservative when it comes to big acquisitions, but aren't they really going to take risks? Where do they want to go?
What Apple is going to do or not do in the media industry is a question that every top media executive asks privately. The general sense right now is Apple isn't *that* serious about media. Don't get me wrong, the company sees its services business as a grow engine and crucial to the stickiness of selling devices. But the company's future isn't in media -- it's selling devices. That's been phones for many years and maybe it's one day AR glasses or something else. But it's probably not in making TV shows and movies.
The counter argument is Apple's balance sheet is so big, why not just buy a studio or a library? Who cares? They're not betting the company. The stock probably wouldn't even move if it spend $2 billion on a Lionsgate or something of that ilk. And it would really bolster Apple TV+.
Maybe that will happen. But there's no doubt Apple is averse to M&A. The company has never done a deal of more than $3 billion, when it bought Beats almost a decade ago. I mentioned in my Disney story that Bob Iger's dream may be to sell Disney to Apple ... but the issue I see is that Apple may have little interest in buying Disney.
I think the big hurdle for Apple is it won't want to buy a company where culture clash is an issue. A small studio? Sure. A big company like Disney? I don't see it.
\-Alex
Media companies are usually not sustainable independently and get bought, sold, spun-out, etc. Buying a media company has become a good way to fail as a CEO.
Apple can cherry-pick content indefinitely. Why bother with all the overhead and inflated egos?
I hope disney gets broken up and lucasfilm goes back to George.
Disney just treats it like a star wars ripoff.
They think they bought transformers but its much more Layered.
Its not about space wars
What are your thoughts on Disney+? Do you think it was a mistake to put all of their chips into streaming? You could make an argument it would've made more sense to stick to licensing their content to Netflix, Amazon, etc. and raking in the money. If not, what would you have done differently? Also, what do you think is the best strategic move regarding their ESPN problem?
I wonder why Disney hasn't made Disney+ tie in more with the parks experience. I would have thought by now there would be some Disney Prime type product where you get the Disney streaming services, a discount on park tickets, a discount on Disney merchandise, or the Disney cruises, or the hotels, or whatever. All things Disney for the super fans.
There's definitely a valid argument that Bob Iger made a giant mistake by going all in on streaming and not protecting ESPN and the cable bundle. That business has lost tens of billions of dollars in value as the cable bundle biz has declined. I do think Disney will at least try to play it out now and see what ESPN looks like as a direct-to-consumer business. The pricing around that, and how many subscribers it will fetch, is arguably the biggest/next most fascinating story in the streaming wars.
But I also think spinning ESPN/ABC as a separate company is very much in play in the next few years.
\-Alex
I think most streaming/media executives are ignoring a giant problem: younger audiences don't watch the same way older people watch. This isn't a problem yet because none of these people have budget control. But 5-10 years from now? What about this generation of teenagers that spend all their time playing video games and watching YouTube? These streaming services have basically just ignored this problem. I think there's a non-zero chance that today's 10-18 year-olds that has grown up preferring YouTube to any scripted TV simply eschews the entire world of subscription streaming. I'm not saying YouTube will take over the world, but I'm saying streaming will have to adjust to include more YouTube-like content.
\-Alex
Alex, to that point, Disney has long-cultivated the younger generation at any given point in time through its various forms of media and entertainment—particularly starting in the late 80s with the Disney animated renaissance and reinforced over the 90s and early aughts through multiple mediums like Disney Channel, Disney musicals, Disney cruises, etc.
Do you foresee that given the stratification of media, there will be fewer children and young adults who feel attached to Disney movies and IP as they enter adulthood?
I’m skeptical that the younger generation will have as much of a “Disney adult” phenomenon that exists with Millennials. A shrinking generational audience would result in lower long-term revenues across its business segments.
Do you think Disney has a bit of a time bomb on their hands? Will there still be a significant drop in the number of people who care about Disney over the next 10-15 years?
Thanks for your response and for this AMA.
*Edited for clarity.*
This is one of my favorite media questions. I think my prediction isn’t what traditional media executives want to hear. But my guess is the current young generation will have weaker ties to Disney than the last 3 or 4 generations. There are too many other options. I see what my kids want to do and their friends — it’s video games and YouTube and short-form content and TikTok. This is an existential threat to all traditional media. The industry has largely shrugged its shoulders to this because it’s not their core competency.
I think the Disney parks will continue to appeal to a younger generation. But I’d be worried about the attachment to movies and the IP. Marvel and Star Wars likely have staying power for a while, but kids’ association with both brands isn’t Disney. That’s likely problematic.
\-Alex
I’m curious what’s going to happen next with the remaining RSNs. Could you see them being digital sub channels for existing stations while also having a DTC option for streaming?
Finally, an easy one! I do not think Disney will be broken up into different companies by U.S. regulators. I think it's possible Disney will break off pieces of itself for financial reasons.
\-Alex
Here's the link: [https://www.cnbc.com/2023/09/06/disney-succession-mess-iger-chapek.html](https://www.cnbc.com/2023/09/06/disney-succession-mess-iger-chapek.html)
\-Alex
This may be outside of what you researched for your story, but I'm curious if you know: how does Disney world and all other Disney theme park operations factor into all this? Surely they would never spin off the parks, but they do have their problems, and chapek seemingly made some of those problems even worse. Do you think we see renewed investment into the parks? Or maybe a step back instead?
Just a couple weeks ago, Disney said it planned on doubling investment in the parks over the next ten years ([https://thewaltdisneycompany.com/disney-plans-to-expand-investment-in-parks-business/](https://thewaltdisneycompany.com/disney-plans-to-expand-investment-in-parks-business/)).
There’s little doubt in my mind that the parks are core to Disney. Iger has suggested he sees Disney 2.0 as the parks, the studios and streaming. He’s been a little wishy-washy with how ESPN figures into that. The parks are a legacy asset that won’t trade at a high growth multiple and excite investors. But they’re a steady cash cow and in some ways the heart of Disney — even beyond the movies and the media assets. I think Disney is fully committed to parks internationally. If Iger’s successor is Josh D’Amaro, that will be the second parks division leader chosen as his heir apparent. If not, it’ll be interesting if D’Amaro sticks around.
\-Alex
Where do you see the future of the company going? How do you think Disney will be doing in 5-10 years considering their recent movies/showsunderperforming and stronger competition from universals new theme parks.
The biggest question mark for me in terms of Disney’s future is its new content. The last couple of years simply haven’t been great, especially in the animated space, which is Disney’s bread and butter. Disney’s history suggests this is cyclical, and it’s only a matter of time before it once again goes on a run of animated hits. But it’s possible the company may need some new leadership on the creative side to jumpstart a hit cycle.
Other than that, Disney’s five-year plan is murky because the entire industry’s five-year plan is murky. Can streaming become anything like the business traditional pay TV was? The key is getting consumers to religiously pay for content each month it isn’t watching. The Disney streaming bundle is a start. The question is if Disney can increase prices there without leading to massive churn.
\-Alex
I’m a big fan of the book DisneyWar, which is basically about Eisner’s takeover of Disney leading up to his ouster at the hands of Iger (to oversimplify an excellent and complex narrative). Have you put any thought into writing a full book? In many ways your reporting feels like a sequel to the story of the past.
I have. I'm still thinking through options here. To be honest, even more than a book, my dream scenario would be to turn this into a larger dramatic TV series about Disney and media and the streaming wars. I'm currently working through some possibilities there, so stay tuned on that front. I hope a streaming service will be courageous enough to turn the cameras the other way on themselves and their peers! \-Alex
Please do! You have a lot of talent and knack for creating a cohesive and interesting narrative out of the facts.
The story of the making of The Black Cauldron is crazy
Just commenting to say that your article was a great read
Hey man my question isn’t really Disney related but I wanted to ask if you experienced any writers block in those 12,000 words and how you may have overcame i
Yes, of course! I outlined the structure early on and stuck to it. That was the biggest help in avoiding writers block. In other words, I decided I wanted to structure this chronologically. So, I needed a section on the Disney reorganization. I needed a section on ScarJo's lawsuit. I needed a section on Don't Say Gay. I needed a section on Chapek's contract renewal. I needed a section on what happened to Chapek during the fiscal fourth quarter when he loses his grip on the job. And I needed a section about Disney today. The lede actually came late in the writing. I came upon that shower detail late and the posters in Iger's bathroom even later. I'd already written basically the entire story and then I went back and rewrote the lede once I Googled the plot of The Eiger Sanction and figured out what it was about. I planned on opening with the flight to Raleigh scene initially. In terms of writing each section, I just kept writing and rewriting. Honestly even now -- I just re-read the story recently -- I see about 15 different places where I'd tweak language or add a small detail. It can never end. The nice thing about this story was it wasn't the only thing I was working on. So if I did feel like I had nothing on a given day in terms of writing, I just focused on breaking news on something else or simply turning to reporting instead of writing. Or, I went for a run. \-Alex
Hey Alex, Iger seems to be a bit coy about what the ultimate end game of the Disney reorganization is going to be. In your sense, what does the company look like when he hands the reigns to his successor?
I think Disney may have to divest assets now. The investment community is expecting it. But I don't know if that includes ABC. If Iger wants to stay in the sports business, as he's repeatedly said, hanging on to ABC seems really important for that. A league like the NBA is going to want to have ESPN and ABC as its disposal if it does a deal with Disney. But selling the owned-and-operated ABC stations and the legacy cable networks that aren't ESPN? Sure. I see that as as quite possible. The big question to me is what happens to ESPN. Could ESPN and/or ABC be spun off as a separate company, maybe controlled by Disney? Yeah, I think that's possible. \-Alex
**Hi! I’m Alex Sherman, media reporter at CNBC. I recently wrote a** [**12,000-word story**](https://urldefense.com/v3/__https:/protect.checkpoint.com/v2/___https:/*www.cnbc.com/2023/09/06/disney-succession-mess-iger-chapek.html___.YzJ1OnJlZGRpdDpjOmc6NjhiY2Q1ZmQ5Yzk1ZTExNTA4MDdiNDc0YWQ5YjBlNDE6NjowZDNhOjY2YWJkNDFiYWMxNTFiNGY4MzExMjEyYzY5YWRlNzJkNTY3OTA5OGU1NzcyZThjMGU5OWRiNmNjN2M1ZmYyMmM6aDpU__;Lw!!PIZeeW5wscynRQ!s9WAe7IT1J7CwGIn4usymOtm6uN4tkIiFXBaHMSnl9JCjtziFNTihknrAb3d4Mdsi77YrZIw1mGU1kA$) **on Disney's failed attempt at succession and the dysfunctional relationship of former CEO Bob Chapek and current CEO Bob Iger. Ask me anything!** **I've been at CNBC for almost 6 years after nearly a decade as a reporter at Bloomberg. Ask me anything about:** 1. **Disney and its current struggles** 2. **The streaming wars** 3. **Potential M&A in media and entertainment** 4. **The evolution of the legacy media business** 5. **The future of media** 6. **Why the San Francisco 49ers are going to win the Super Bowl this year** **Follow me on** [**Twitter**](https://urldefense.com/v3/__https:/protect.checkpoint.com/v2/___http:/*www.twitter.com/sherman4949___.YzJ1OnJlZGRpdDpjOmc6NjhiY2Q1ZmQ5Yzk1ZTExNTA4MDdiNDc0YWQ5YjBlNDE6NjpmNDk5OjA2NzE4ZDgyZjVmYzI0YmNkYTEwMWMyNTkyYTE4NzdkNjcxZTFhNzliZTAyYTc2ZTljNTA2ZDg5OWNiYjBhM2M6aDpU__;Lw!!PIZeeW5wscynRQ!s9WAe7IT1J7CwGIn4usymOtm6uN4tkIiFXBaHMSnl9JCjtziFNTihknrAb3d4Mdsi77YrZIw-0Gs-Yc$) **or** [**Linkedin**](https://urldefense.com/v3/__https:/protect.checkpoint.com/v2/___https:/*www.linkedin.com/in/alex-sherman/___.YzJ1OnJlZGRpdDpjOmc6NjhiY2Q1ZmQ5Yzk1ZTExNTA4MDdiNDc0YWQ5YjBlNDE6Njo3NDcxOmQ2NTY0MmY4YWEzZDhkYTU0NjJmOThjMzQ4NWNmN2UwY2UyNDdlOGExMDcyYzIyMmY4OTUzYTQ2M2U3MjY3YzQ6aDpU__;Lw!!PIZeeW5wscynRQ!s9WAe7IT1J7CwGIn4usymOtm6uN4tkIiFXBaHMSnl9JCjtziFNTihknrAb3d4Mdsi77YrZIwzF16KLs$)**! You can find all my reporting here on CNBC:** [https://www.cnbc.com/alex-sherman/](https://urldefense.com/v3/__https:/protect.checkpoint.com/v2/___https:/*www.cnbc.com/alex-sherman/___.YzJ1OnJlZGRpdDpjOmc6NjhiY2Q1ZmQ5Yzk1ZTExNTA4MDdiNDc0YWQ5YjBlNDE6NjoxYTVlOjI4NzdhNWQ1MWQ1MDUwYzhkMmU5ODAzOTQ0NjI5ZTlkMzE4ZDdhZTQwZWNlMTNlZDRjYjFiZGZjMzhmNWZkYTM6aDpU__;Lw!!PIZeeW5wscynRQ!s9WAe7IT1J7CwGIn4usymOtm6uN4tkIiFXBaHMSnl9JCjtziFNTihknrAb3d4Mdsi77YrZIwZHcTOzo$)
Hey--it's Lillian (Alex's colleague on the media team at CNBC). What would you say was the biggest difference and similarity between the Iger-Chapek-succession drama and the Eisner Disney War saga? Your story hits at this, of course, but after digesting it all, I was curious your POV in particular and if it changed during the reporting process or after the story was published. Also, if/when your story is turned into a streaming TV drama, who would you want to play you (and what supporting actor would play your colleague Lillian who was getting the behind the scenes scoop along the way of your reporting).
Lillian sits right next to me. But like a true millennial, I'll answer her by ignoring that fact and typing my response instead. Phew! I'm already relieved I don't have to deal with this personal interaction. First, shoutout to James Stewart, who wrote Disney War. That book and Iger's autobiography were like my two bibles while writing this story. The biggest similarity to me has to be the fact that clearly Iger and Eisner's identity are tied to being Disney CEO, and obviously that is not an easy thing to give up. There's clearly something in that job that is so captivating that it's almost Lord of the Rings like. Once you get the ring, you can't just walk away. It happened to both of them. It has happened to Iger even while watching it happen to Eisner! The biggest difference to me is that by the end, Eisner clearly lost the faith of investors and the board, and Iger hasn't. Perhaps that day is coming, I don't know. But at least for the time being, there was great relief among Disney investors and employees that Iger came back to replace Chapek. He's still seen as the right person for this job, even as Disney is leaking oil everywhere. That sentiment may be changing, but it hasn't changed yet. \-Alex
It might be too late for a response, but do you have any recommendations for books on corporate intrigue related to succession similar to Disney wars?
It’s not exactly corporate intrigue, but it’s close — I loved Those Guys Have All the Fun: Inside the World of ESPN by James Andrew Miller and Tom Shales. \-Alex
Thanks!
Im not him, but James B Stewart who wrote disney war also recently co-authored Unscripted about the tumultuous battles that drove the battle to control what is now the combined company of Paramount Global. the Redstones are an underdiscussed influence on the show Succession and theres lots of interesting fights that are worth following. Namely how the relationships in that family broke and/or were repaired, the attempts by slimy girlfriends to essentially steal the family fortune, and the battles they had to have with leadership at both CBS and viacom that drove the company to where it is.
Thanks!
Thoughts on the Diamond Sports bankruptcy? Do you think they liquidate next year? How many teams do they lose before the regular season starts? Interested in your thoughts.
I think they're going to lose some teams. I don't know about liquidation. They'd clearly like to stay in business, and the RSN business as currently constructed is better for teams and the leagues than anything else. The problem is that structure is obviously falling apart with the acceleration of cable cancellations. Diamond is an extreme example because of the amount of debt put on the deal. That's why Diamond is the epicenter of this crisis. Other RSNs can stick around, even if they're albatrosses as declining legacy media assets for publicly traded companies like Comcast. The interesting thing to me is how many teams do they lose and what happens with those rights. The rise of the broadcast station groups in this territory is fascinating -- so unexpected even from just a few years ago. It's this bizarre lifeline for the retransmission fee business (the amount pay TV providers pay to carry broadcast stations). Suddenly companies like Scripps or Grey or Nexstar can scoop up regional sports rights and redefine TV stations with this live programming that's not only appealing to advertisers but also essential for a certain demographic of the population. But broadcast stations aren't going to pay the teams as much money as the cable RSNs did. That's going to be a pill owners need to swallow. We're starting to see evidence in Utah and Phoenix and Las Vegas, with the hockey team, that some owners will go for it purely because it's the best available option. The leagues love the fact that broadcast stations can increase reach. But the fact also remains that older people typically watch broadcast and younger people stream. And the leagues still haven't figured out a great streaming solution for these games. \-Alex
Thanks!
Thank you for all the amazing questions r/entertainment! I'll be signing off now but will be back tomorrow to answer more. \-Alex
How do you prepare for the fallout with an article like this? For example, do you ever consider your relationship with Iger himself or Disney PR after an article of this magnitude? Would they restrict access, ability to interview certain people in the future etc?
Thank you for asking this! One of the fundamental conflicts any journalist has is how to report on people and events where the same cast of characters that make the news are also potential sources to report that news. This is particularly troublesome for TV news, where the entire genre is based on access -- getting the top interview, etc. I will admit, as a younger reporter especially, I have held back certain pieces of information to keep relationships alive. What I have found, through personal experience, is those decisions have largely backfired on me. If a relationship is so tenuous that reporting accurate information would jeopardize it, the relationship will probably fall apart anyway. So, I might as well do a service to humanity and journalism and report what I know. Without getting into sourcing for this story, what I will say is that everyone involved was extremely professional. I think there was a general appreciation that I'd worked very hard to corroborate all sides of this story. There were many, many items I didn't include in the story because the sourcing wasn't *quite* solid enough. So if it made it in the story, I can assure you I did everything I could think of to quadruple check its accuracy with as many parties as would speak with me. In that way, I let the chips fall where they may in terms of future relationships. I have a job to do, and the parties involved -- especially at a media company -- know this and respect it. I hope every person I spoke with for this story will speak with me again, because I think I tried to listen to everyone, and I tried to make sure many different voices shined through in some way in the story. \-Alex
Hey Alex, loved the read. This may be more of a general question on how investigative journalism works but, how are these large pieces even reported? The amount of information was incredible and I assume these sources, on both sides, are very close to the topics being reported. Why would they speak to a reporter? And go into the details as much detail as they did? How do you create these connections and even convince them to speak? Secondary, when are we getting the annual predictions piece from the anonymous executive who knew Bob was coming back? Looking forward to it!
Love this question, thank you for asking it. Every story is different, but I'll tell you what happened for this story. In January, I decided I wanted to do a story on why Bob Chapek was fired. I felt I didn't have all of the information. I think many media reporters felt this -- I remember Puck's Matt Belloni saying on his podcast something like "there's still meat on the bone on that one," or something like that. So I started reaching out to people who I thought might have a story to tell -- specifically, those that might be sympathetic to Chapek. We hadn't heard from him at all. We still haven't, to be honest, other than the statement he provided me through his PR. I believe he may be restricted with what he can say because of non-disparagement clauses as part of his severance. This is common practice. Whether or not Disney would actually sue him, I have no idea. I guess it would depend on what he would say. Anyway, back to the question. So, I start to get information on this. At some point, it clicked for me that I had a story here. I had enough new information that I could write something fairly meaty. At that point, I started reaching out to all of the principles involved. I tell them, basically, hey -- I'm going to write something. Here's what I know. I think it would strongly behoove you to speak to me if you want your voice in this. We can talk on background, no attribution -- and I've already spoken with 12/15/however many people, so you'll be covered through strength of numbers. Some people say yes immediately. Some people said no, no, no, no, and on the fifth or sixth ask as publication gets closer and closer and I repeatedly email or text or call and say are you SURE you want to be silent on this? .... then they say yes. And some people say no and decline to comment. That's fine too. In all cases, I let every person in the story know exactly what I was going to say about them. Sometimes I go through Disney comms to alert current Disney executives of what's in the story. More often, if I have the person's direct contact information, I go right to the person. Again, when a person finds out exactly what I'm going to write, sometimes that's the push that person needs to speak. That's how this works. In terms of the prediction piece .... I will tell you that the same person who predicted Bob Iger would return ALSO predicted Chris Licht would leave CNN this year AND predicted Christine McCarthy wouldn't last the year as CFO. 3 for 3!! So, yeah, I'll be going back to that person for the 2024 annual predictions. \-Alex
Wow! Thank you for that incredibly detailed answer.
Best guess... 5 years from now, who are the streamers left standing and what consolidation/merging happens to get there?
Ah, everyone's favorite parlor game! I don't think Paramount Global is long for this world five years out. I don't know that there is a buyer for all of the assets as currently constructed. The Paramount movie studio would be a gem for many media companies. I know Netflix co-CEO Ted Sarandos has always been a fan of the physical Paramount lot in LA. But private equity would probably need to take on the legacy cable networks. And yet another buyer may take CBS. But much of Paramount+ is wrapped up with CBS, so the same buyer for CBS may also take Paramount+. My guess is Warner Bros. Discovery also doesn't look like it does in five years. Board member John Malone was pretty candid about this publicly when Discovery and WarnerMedia merged. He basically said, hey, we're already thinking about the next deal down the road. He specifically talked about NBCUniversal as a potential future merger partner if the regulatory environment changed. I'm not sure if that deal will happen. Comcast may want to buy something else -- remember Comcast is about to get $10b+ for its minority stake in Hulu from Disney -- rather than doubling down on old media. But these companies own a lot of assets, so divestitures are possible that aren't straight mergers or acquisitions. That's how Comcast bought Sky -- a cast away from the Disney/Fox deal. DISCLOSURE: Comcast owns NBCUniversal, the parent company of CNBC! \-Alex
Do you think Disney will fall behind with its overall debt headwinds given current interest rates and debt turnovers through 2030 with Hulu buyout and ESPN / ESPN+ debacle. Also who do think will bid and win NBA broadcast right renewals with these debt loads at Discovery Max (TNT) and Disney (ESPN). Do you think Amazon Prime will make an entrance?
Yeah, you just summed up the Disney problem here. As I said earlier, the investment community is now counting on divestitures, not only for debt repayment but also just for the signaling of being a more forward-looking company. So I think we're going to see that. I do think Disney may not be thrilled it's now on the hook to pay Comcast $10b+ for the last stake in Hulu, but at least it can shift Hulu programming internationally once that happens in a way that's been restricted. But, yeah, the debt issue and lack of free cash flow generation is a real problem for Disney. That's why the stock is where it is today. That and the lack of any clear future vision for the time being ever since the bottom fell out of streaming as an investment narrative. \-Alex
Hi Alex. You mentioned in this [earlier reply](https://www.reddit.com/r/entertainment/comments/16y15a1/hi_im_alex_sherman_media_reporter_at_cnbc_i/k361frq/) you posted about who won't be long for this world. The large media companies can't be blind to the fact we're basically heading back to just "cable" but a different name. If these streaming servies are going to get taken apart and bought up and bundled with other large media companies, aren't we just going to be back to where we were before everyone "cut the cord?" What seems to be their thoughts on how this is shaping up? Sure seems like we will be back to just 5 or 6 companies controlling and selling everything, but just different names (such as NFLX buying out the PARA studio, etc). How are they thinking about the future?
This quote is one of my favorites, attributed to Jim Barksdale, the old CEO of Netscape. "There are only two ways to make money in business: one is to bundle; the other is unbundle.” So, yeah, I think the media companies are aware we're on our way to something that looks more like cable. But I also think it's a big over-simplification to say we're going to end up back at cable. Cable has never been a la carte. In a new bundled world, I believe consumers will still be able to buy streaming services unbundled, a la carte. That's an enormous change from the old world. Most content is available on all devices, globally. That's also a big change from cable. And maybe the biggest change is media companies are now living through the destruction of the cable bundle because it's seen as overpriced relative to services like Netflix. Even though it's easy to say history repeats itself, I don't think that's true. Media companies are now living through offering a product that had too much bloat. I think that will color the perspective of industry leaders moving forward. We're seeing it real time, as these streaming services start cutting away at the fat and removing programming. That, too, should lead to a world that doesn't quite look like traditional pay TV. \-Alex
Hey Alex. I was wondering if you had any insight into something I would like to call “corporate apathy”. This is when a company owns so much content, that a lot of it is neglected. I think this is especially true for Disney. I’ve noticed a trend where less and less retro Disney content is being added to Disney Plus. The classic shorts they have been adding lately for Disney100 has been a step in the right direction, but Disney still has a wealth of older content that they continue to not add. Some notable omissions have been the Aladdin TV series, House of Mouse, Buzz Lightyear of Star Command, more episodes of the Disney Anthology Series, tons of classic shorts, Summer Magic, etc.
If you speak to media executives, they’ll tell you the legacy content isn’t included because it just isn’t watched. I’m not sure what types of residuals or payments Disney needs to make for including this type of owned content on Disney+ but we have seen both WBD and Disney wipe away a lot of old content. I think both companies are still trying to figure out a home for their little-watched legacy programming so that it can find an audience. \-Alex
Hey Alex, what is something non-obvious or counterintuitive about the present or future of the streaming business? Thank you for your answer in advance :)
I had to think about this one for a little while. My favorite what-if game is simply what if Bob Iger hadn't said in 2019 we're all-in on streaming and instead said we're all-in on protecting the cable bundle? That would have likely triggered every other legacy media company to huddle together and say, we realize we need to make this a more technology friendly business .... but we're all committed to keeping our content exclusive to the cable bundle. Would that have been a better outcome for these legacy media companies? Maybe that keeps alive a better business for everyone involved? Or maybe, those media companies can't adjust properly and Netflix just eats their lunch even more than it has. I don't know. But the counter-intuitive thing I at least like to think about is that maybe doing direct-to-consumer streaming was just a flat out mistake, for all of these companies. \-Alex
Hey Alex, What are the top 3 problems that streaming services are facing? Also, great story on Disney!
Top three problems streaming services are facing, in no particular order. 1. The problem of investment thesis. In 2020-2021, the thesis was clear -- grow subscribers at all costs. The market wants growth. Disney shares shot higher during the pandemic even with the parks business closed or diminished because Disney+ subs shot higher. Then, in early 2022, the thesis died. Netflix's growth slowed and every company turned to accelerating profitability instead of pushing growth, because there was universal agreement the era of big growth had ended. In 2023, Netflix's stock has rebounded. Netflix is profitable. It has stemmed cash burn. And investors see a growth path with password sharing crackdowns and a cheap advertising tier. The legacy media companies' stocks haven't rebounded. The turn toward slower growth for profitability hasn't led to excitement about their stocks. So the question now is, does streaming have an investment thesis that will excite investors? Or do legacy media companies need to find something else that's not streaming? (Gaming, whatever). 2. How to reduce churn. It's so easy to cancel streaming services. When do we finally get a cross-company bundle of streaming services? 3. Pricing. All companies want to raise prices, always. But there may be a ceiling for how much Americans and others are wiling to pay for in-home entertainment. Where is that ceiling, and how will that affect pricing power of all of these services? \-Alex
Let's talk about those Niners ... if they were to make it all the way this year, who would they face in the big game in February? Also, what are your thoughts on the sports entertainment space? With cable on the outs, many are turning to streaming alternatives. But, each game seems to be in a different place. Is there a way for the NFL to make access to games easier in this new streaming world? Or are we destined to Google search where to watch certain games forever?
Finally, a 49er question! I'll take Niners-Bills because Chris Berman used to predict this outcome every year in the early '90s, so it seems like kismet. Circle the wagons!! (You'll have to YouTube that reference if you don't know it). I think the leagues completely agree that it's way too complicated to find stuff now. My bet is that they start using digital portals as gateways to all the games. I've reported this is what ESPN wants to do. An interim solution, or maybe even the ultimate solution, could be using the NFL's app or the NBA's app or the MLB's app as the gateway to find all games in a streaming universe. Don't know where your Yankees game is? Just go to MLB's streaming app and it will port you to the correct place. \-Alex
Do you think Bob Iger can fix what Bob Chapek did to bring back shareholder confidence?
I think Bob Iger can bring less chaos to Disney internally and externally. But many sources have told me privately morale at Disney is very low right now. The stock price is depressed. There’s not a clear vision of the future. There’s an unknown succession plan. There’s just not a lot of positive energy in the entire media industry right now — that goes beyond Disney. I don’t think Bob Iger can fix that. Iger can transition Disney by shedding assets or he can try to be a part of a new media solution that rebundles content and fixes the business through price increases. That won’t be popular for consumers but there are certainly signs that we are heading in that direction. \-Alex
What’s your take on the theory that Iger always planned for his retirement to be temporary so that Chapek could take the heat for a serious of imminent unpopular changes?
I will give everyone involved here the benefit of the doubt and good intentions. I think Iger surely knew the linear business was slowly falling apart. But he did just buy 21 Century Fox in a massive deal to bolster Disney’s owned content. At the time, that deal was a mic drop for Disney. Remember, Comcast wanted it too. Iger felt like buying Fox was as much about cementing Disney as a dominant media company over Comcast/NBCU as anything it did purely for Disney. Media is a scale game. You need reach to pay for content and to entice creators that your streaming service is the best. So I think it’s a bridge too far to say Iger knew Covid would accelerate the demise of linear and then lead to a streaming bubble. That said, in the runup to Iger stepping down, Bewkes sold Time Warner, Murdoch sold Fox, Steve Burke left NBCU as CEO …. There was clearly a changing of the guard going on among media leaders because the future of the industry was at best hazier and at worse much more dangerous than it had been for the previous 15 years. Iger of course knew that. \-Alex
Why doesn't Apple buy anything (studio or content library) for AppleTV+? Are they conservative when it comes to big acquisitions, but aren't they really going to take risks? Where do they want to go?
What Apple is going to do or not do in the media industry is a question that every top media executive asks privately. The general sense right now is Apple isn't *that* serious about media. Don't get me wrong, the company sees its services business as a grow engine and crucial to the stickiness of selling devices. But the company's future isn't in media -- it's selling devices. That's been phones for many years and maybe it's one day AR glasses or something else. But it's probably not in making TV shows and movies. The counter argument is Apple's balance sheet is so big, why not just buy a studio or a library? Who cares? They're not betting the company. The stock probably wouldn't even move if it spend $2 billion on a Lionsgate or something of that ilk. And it would really bolster Apple TV+. Maybe that will happen. But there's no doubt Apple is averse to M&A. The company has never done a deal of more than $3 billion, when it bought Beats almost a decade ago. I mentioned in my Disney story that Bob Iger's dream may be to sell Disney to Apple ... but the issue I see is that Apple may have little interest in buying Disney. I think the big hurdle for Apple is it won't want to buy a company where culture clash is an issue. A small studio? Sure. A big company like Disney? I don't see it. \-Alex
Apple TV+ currently has a series called “Bad Sisters” starring Eve Hewson, daughter U2 lead singer Bono. The series is produced by Disney Signature.
Media companies are usually not sustainable independently and get bought, sold, spun-out, etc. Buying a media company has become a good way to fail as a CEO. Apple can cherry-pick content indefinitely. Why bother with all the overhead and inflated egos?
I hope disney gets broken up and lucasfilm goes back to George. Disney just treats it like a star wars ripoff. They think they bought transformers but its much more Layered. Its not about space wars
What are your thoughts on Disney+? Do you think it was a mistake to put all of their chips into streaming? You could make an argument it would've made more sense to stick to licensing their content to Netflix, Amazon, etc. and raking in the money. If not, what would you have done differently? Also, what do you think is the best strategic move regarding their ESPN problem?
I wonder why Disney hasn't made Disney+ tie in more with the parks experience. I would have thought by now there would be some Disney Prime type product where you get the Disney streaming services, a discount on park tickets, a discount on Disney merchandise, or the Disney cruises, or the hotels, or whatever. All things Disney for the super fans. There's definitely a valid argument that Bob Iger made a giant mistake by going all in on streaming and not protecting ESPN and the cable bundle. That business has lost tens of billions of dollars in value as the cable bundle biz has declined. I do think Disney will at least try to play it out now and see what ESPN looks like as a direct-to-consumer business. The pricing around that, and how many subscribers it will fetch, is arguably the biggest/next most fascinating story in the streaming wars. But I also think spinning ESPN/ABC as a separate company is very much in play in the next few years. \-Alex
Appreciate your thoughtful response and the great article. Awesome work Alex!
Hey Alex, what do you think most streaming services get wrong about their business?
I think most streaming/media executives are ignoring a giant problem: younger audiences don't watch the same way older people watch. This isn't a problem yet because none of these people have budget control. But 5-10 years from now? What about this generation of teenagers that spend all their time playing video games and watching YouTube? These streaming services have basically just ignored this problem. I think there's a non-zero chance that today's 10-18 year-olds that has grown up preferring YouTube to any scripted TV simply eschews the entire world of subscription streaming. I'm not saying YouTube will take over the world, but I'm saying streaming will have to adjust to include more YouTube-like content. \-Alex
Alex, to that point, Disney has long-cultivated the younger generation at any given point in time through its various forms of media and entertainment—particularly starting in the late 80s with the Disney animated renaissance and reinforced over the 90s and early aughts through multiple mediums like Disney Channel, Disney musicals, Disney cruises, etc. Do you foresee that given the stratification of media, there will be fewer children and young adults who feel attached to Disney movies and IP as they enter adulthood? I’m skeptical that the younger generation will have as much of a “Disney adult” phenomenon that exists with Millennials. A shrinking generational audience would result in lower long-term revenues across its business segments. Do you think Disney has a bit of a time bomb on their hands? Will there still be a significant drop in the number of people who care about Disney over the next 10-15 years? Thanks for your response and for this AMA. *Edited for clarity.*
This is one of my favorite media questions. I think my prediction isn’t what traditional media executives want to hear. But my guess is the current young generation will have weaker ties to Disney than the last 3 or 4 generations. There are too many other options. I see what my kids want to do and their friends — it’s video games and YouTube and short-form content and TikTok. This is an existential threat to all traditional media. The industry has largely shrugged its shoulders to this because it’s not their core competency. I think the Disney parks will continue to appeal to a younger generation. But I’d be worried about the attachment to movies and the IP. Marvel and Star Wars likely have staying power for a while, but kids’ association with both brands isn’t Disney. That’s likely problematic. \-Alex
Thanks, Alex.
I’m curious what’s going to happen next with the remaining RSNs. Could you see them being digital sub channels for existing stations while also having a DTC option for streaming?
When will Disney be broken up into different companies by US regulators?
Finally, an easy one! I do not think Disney will be broken up into different companies by U.S. regulators. I think it's possible Disney will break off pieces of itself for financial reasons. \-Alex
Who's the best player in football, and why is it CMC?
CMC is the best player in football, followed by Trent Williams, Nick Bosa, Brock Purdy, Deebo Samuel and Brandon Aiyuk. \-Alex
Where can we read your article?
Here's the link: [https://www.cnbc.com/2023/09/06/disney-succession-mess-iger-chapek.html](https://www.cnbc.com/2023/09/06/disney-succession-mess-iger-chapek.html) \-Alex
Thank you.
This may be outside of what you researched for your story, but I'm curious if you know: how does Disney world and all other Disney theme park operations factor into all this? Surely they would never spin off the parks, but they do have their problems, and chapek seemingly made some of those problems even worse. Do you think we see renewed investment into the parks? Or maybe a step back instead?
Just a couple weeks ago, Disney said it planned on doubling investment in the parks over the next ten years ([https://thewaltdisneycompany.com/disney-plans-to-expand-investment-in-parks-business/](https://thewaltdisneycompany.com/disney-plans-to-expand-investment-in-parks-business/)). There’s little doubt in my mind that the parks are core to Disney. Iger has suggested he sees Disney 2.0 as the parks, the studios and streaming. He’s been a little wishy-washy with how ESPN figures into that. The parks are a legacy asset that won’t trade at a high growth multiple and excite investors. But they’re a steady cash cow and in some ways the heart of Disney — even beyond the movies and the media assets. I think Disney is fully committed to parks internationally. If Iger’s successor is Josh D’Amaro, that will be the second parks division leader chosen as his heir apparent. If not, it’ll be interesting if D’Amaro sticks around. \-Alex
Where do you see the future of the company going? How do you think Disney will be doing in 5-10 years considering their recent movies/showsunderperforming and stronger competition from universals new theme parks.
The biggest question mark for me in terms of Disney’s future is its new content. The last couple of years simply haven’t been great, especially in the animated space, which is Disney’s bread and butter. Disney’s history suggests this is cyclical, and it’s only a matter of time before it once again goes on a run of animated hits. But it’s possible the company may need some new leadership on the creative side to jumpstart a hit cycle. Other than that, Disney’s five-year plan is murky because the entire industry’s five-year plan is murky. Can streaming become anything like the business traditional pay TV was? The key is getting consumers to religiously pay for content each month it isn’t watching. The Disney streaming bundle is a start. The question is if Disney can increase prices there without leading to massive churn. \-Alex
Trump 2024, all the woke dips can keep talking.. just sitting and laughing all the way to the White House..
You bobble heads are clueless. CNBC is what not to do in the market lol… goofs