Industry experts are predicting that 2024 will be another big year for changes at the Walt Disney Company. This post covers the anticipated extension of CEO Bob Iger, other executive leadership shuffles, corporate acquisitions, streaming shakeups, and more next year for Disney–along with our nonexpert assessment of each prognostication.
You might recall a post like this last year, and some of those predictions having since come true. Just as last year, these are coming courtesy of CNBC, which for the third year has asked media executives to anonymously give one industry-shaking prediction for 2024. Several of them discussed Disney, with answers involved Bob Iger, streaming service mergers & acquisitions, and the future of the company’s CEO position.
We feel this is worth reporting on because these expert predictions for the Walt Disney Company have an incredibly high success rate. In the past, they’ve called the return of CEO Bob Iger to run Disney the year before it happened. (Not that it matters, but we made that prediction in 2020 when calling Bob Chapek a hatchet man to make unpopular decisions and give the company a reset.) Last year, CNBC’s predictions that Bob Iger would extend and CFO Christine McCarthy would leave proved accurate.
Other predictions from last year’s list were wrong. The media industry didn’t bounce back from recession–even as most other industries did. Netflix didn’t merge with Disney or Paramount. David Zaslav has, somehow, gone unchallenged. Unfortunately, Apple did not ban TikTok from its app store. Paramount hasn’t been sold for parts–but in fairness to this one, there’s still 10 days to go in 2023!
Against that backdrop, let’s take a look at the 2024 predictions pertaining to the Walt Disney Company…
Iger Extends (Again) – One executive thinks that CEO Bob Iger will extend his contract beyond December 31, 2026, his current end date, and stay as Disney CEO for years to come.
Iger has previously announced he would retire, but failed to leave Disney on several occasions. After saying in 2011 that he would retire in 2015, Iger extended his contract on multiple occasions, putting it off as the timing wasn’t right as he sought to complete key acquisitions, fix problems with ESPN, and successfully launch Shanghai Disneyland. Iger most recently extended after Disney’s $71.3 billion acquisition 21st Century Fox assets.
Potential successors didn’t stick around, and the company’s capable CEO candidates shrank with it. That left Chapek as an almost ‘default’ option when Iger opted to abruptly step down in early 2020 without having done much public-facing succession planning and management.
This expert says, “fool me five times, shame on me.” Disney has many strategic problems without easy answers, such as figuring out future business models for ESPN and linear television in an increasingly streaming world. Those problems demand a leader with industry expertise and experience, and there’s no one better than Iger, according to this expert.
Last year, I thought this was a slam-dunk prediction for those exact same reasons–history was on its side, there was a short runway, and no suitable replacement. This time is different. (Famous last words!) There are already wolves at the gates, and they’re howling about Iger’s past mistakes. Most importantly, none of Disney’s challenges can’t be sorted out in the next three years–if Iger hasn’t fixed those problems before 2026, he’ll be out one way or another.
In fact, if I had to bet on either Iger extending again or naming a successor ahead of schedule, I’d put my wager on the latter. I’m highly skeptical that Iger will have the power or even appetite to continue as CEO into 2027. This just seems like an “autopilot mode” prediction that would’ve been a safe bet in the past–but things have changed a lot in only a year.
Nelson Peltz & Jay Rasulo Win Disney Board Seats – Enter the wolves, or ghosts of Disney Parks past returning to haunt Bob Iger, as we previously put it. Activist investor Nelson Peltz and former Disney Chief Financial Officer Jay Rasulo have teamed up to criticize failed succession planning–and a number of other things–as part of a statement announcing their intentions to run for Disney’s board of directors.
One expert predicted that both Peltz and Rasulo will win their campaign and both join Disney’s board. A second guessed only Rasulo will get a spot, perhaps via a settlement before a vote.
My commentary is that the best proxy for success or failure in the proxy fight is the share price. Peltz called it off before in part because he liked the changes he saw from Iger, but also because he saw a narrowing path to victory–because Disney’s stock price had rebounded. In my view, it’s a similar story this time.
If Disney is under $90, Peltz and Rasulo winning seems likely. If it’s over $105, they’re probably going to fail–or settle on one seat. Anything between is toss-up territory. While Iger is obviously in the driver’s seat and Disney has some degree of control over its stock price, much of that will depend on media tumult around it and the broader economy.
Dana Walden Named as Successor CEO – Current CEO Bob Iger and Disney’s board have committed to proper succession planning this time. Iger knows a big part of his legacy–which is of paramount importance to him–is sticking the landing on an orderly transition. He’s not going to screw it up again. (Which is also why I don’t think he’ll extend.)
Accordingly, it’s expected that Iger and Disney will begin choreographing the succession plans as early as late 2024. This doesn’t necessarily mean naming the CEO-in-waiting, but it could mean planting some puff pieces in the trades, NYT or WSJ. It could also mean Iger and this person making highly-visible public appearances.
Anyway, this expert predicted that it’ll be Co-Chair of Disney Entertainment Dana Walden who gets the nod. Iger will again move to a chairman role when Walden takes over as CEO, just as he did with Bob Chapek in 2020. During the Bob Swap, both Walden and Parks Chairman Josh D’Amaro were mentioned as future CEO candidates who weren’t quite ready (in the board’s view) as of late last year when they wanted to oust Chapek.
A second expert threw out a different name to key an eye on: Andrew Wilson, the CEO of Electronic Arts. (As background, this same expert correctly predicted Iger would return as Disney CEO in 2022 and that McCarthy would depart as Disney’s CFO in 2023.)
There are more succession-planning predictions, so I’m going to comment on Walden in those. For now, I’ll just say that I hope that no one from Electronic Arts comes to the top of Disney. While I know nothing about Wilson, EA is an awful video game maker with a terrible track record of exactly the kind of nickel and diming hijinks that grinds the gears of Walt Disney World fans. Disney and EA do have a relationship and that expert has a good track record, so this worries me. I really hope it’s wrong.
Disney Acquires a Company and Ex-Executive – For the second consecutive year, an expert is predicting that Disney will right past wrongs and acquire Candle Media and sell most of its assets–meaning that this would be a talent acquisition. According to this expert, it would be for Kevin Mayer, with Tom Staggs leaving the company.
Bob Iger passed over Kevin Mayer for the Disney CEO role in 2020, prompting Mayer to leave Disney and take a short-lived CEO role with TikTok. Mayer really got unlucky with both moves, and Disney’s decision was confounding given Mayer’s success in launching Disney+ and the company’s future in streaming media. Iger could also get another chance with Mayer’s co-founder of Candle Media, Tom Staggs, who also left Disney when it became clear he wasn’t going to be CEO.
We’ve discussed this scenario many times already. In last year’s 5 Businesses Disney Should Buy or Sell, we suggested that Disney should acquire Candle Media primarily as a talent acquisition play for Mayer and Staggs. That duo serving as co-heads of Disney with an Eisner-Wells dynamic is a dreamlike scenario for us.
At this time last year, it felt like wishful thinking–the kind of happy Hollywood ending that happens in the movies but not the actual industry, where egos are larger than life. Since then, both Mayer and Staggs have returned to Disney–technically only as “consultants” but as part of Iger’s inner circle on streaming strategies and business organization. The kind of stuff that’s not exactly minor–but will determine the future fate of the company. It’s fair to say they wouldn’t do this if there were bad blood, and also that it’s probably a trial balloon of sorts for something bigger.
Circling back to succession planning, a tag team of Tom Staggs and Kevin Mayer is our #1 scenario, but Josh D’Amaro as CEO or a co-head of the company is a close second. (Increasingly, we view D’Amaro’s failure to actually do anything of import or with urgency as a strike against him. We know his hands are tied to some extent by dilemmas with other divisions, but ~4 years later, what are his actual accomplishments?)
Ultimately, we want to see someone as Disney CEO with background in Parks & Resorts. Disney is a media company and that’s understandably integral to their future success, but it’s increasingly clear that Parks & Resorts are the future and the future profitability of legacy media is increasingly murky. Some past leaders have taken Parks & Resorts for granted–as a cash cow to be milked–to focus on Hollywood, even when it didn’t make complete strategic sense. It’s long past time to take Parks & Resorts seriously.
We believed Iger and D’Amaro when they unveiled that Disney Plans to Double Investment to $60 Billion in Disney World, Disneyland & Beyond. But in order for that to be seen through to fruition, there needs to be someone who believes in and has experience with Parks & Resorts. I don’t know much about Dana Walden or her view on parks, but from a background perspective alone, I hope she’s not the next CEO. (At least, not without a co-head who has Parks & Resorts experience.)
Sports Rights and (Lack of) Bidding Wars – There were several predictions made about rights for the NBA, College Football Playoffs, and regional sports networks. This is the part of the post where many of you, who only care about theme parks, have their eyes glaze over. But this is all interconnected, and Disney spending big (or not) on sports absolutely has a bearing on investments in Walt Disney World, Disneyland, and beyond.
Basically, the expectation here is that bidding wars won’t be as “bad” as expected as there won’t be as many bidders. ESPN will end up with NBA rights (in a 3-way deal, which is expected) and the College Football Playoffs.
This seemed like an inevitability when Disney backed out of the IPL bidding over a year ago, signaling that profitability mattered more than subscriber numbers. But since then, stupid sums have been spent on other sports by streaming services.
Still, it seems increasingly difficult to justify giving even bigger deals to these leagues when the business model has changed completely–and is no longer as lucrative. If the tech companies with piles of cash to burn back out or exercise restraint, that should result in Disney and other interested parties spending a lot less. Here’s hoping.
Media Consolidation – Several executives predicted mergers and acquisitions in the streaming space, with possibilities revolving around Paramount, Warner Brothers Discovery, and Comcast/NBCUniversal. There are a lot of possibilities here, and Warners has an incentive to act due to tax implications.
Notably, this is the third consecutive year that experts have predicted Paramount would be acquired. It hasn’t happened yet, and part of that is presumably the economic environment (I would hazard a guess this is the same reason Disney is keeping its linear networks–they couldn’t find a serious buyer.)
However, there have been high-profile talks within the last few days, so it seems like an inevitability at this point. It’s hard to imagine there being as many major streaming services at the end of 2024 as there are right now, but I thought the same thing at this time last year.
Bigger Disney Bundle – Industry insiders have made predictions several years running that streaming will eventually come full circle and look like the cable television it replaced. This once again appeared on the list for 2024, with one expert predicting Disney would agree to bundle its trio of streaming services (Disney+, Hulu and ESPN+) with Max and Netflix to rival cable.
A second expert noted that this would probably need to be championed by an anchor distributor–probably Amazon. That person thought it’d be Paramount+ and Max that would be bundled via Amazon.
As a consumer of streaming services, I view this as a negative. It’ll be pitched as a discount–more choice for less money. In reality, the current economics of streaming just do not work. The monthly fees are too low and there’s too much expensive-to-produce content. But viewers have been “trained” to expect this from the ‘growth-at-all-costs’ era during which each of these companies was willing to lose billions of dollars. The companies want bundles now for cover to scale back on content and reduce churn in the process.
As a fan of Walt Disney World and Disneyland who goes months at a time without opening the Disney+ app, I really hope this happens. I want Disney+ to be viable ASAP not because I am a mega fan who loves the service, but because I couldn’t care less about it. The service trying to squeeze consumers by offering less and charging more is a-okay by me (welcome to being a Parks & Resorts fan!), as it means the company can sooner turn its focus to the aforementioned $60 billion expansion plans for Walt Disney World and Disneyland. That doesn’t happen until Disney+ stops losing hundreds of millions of dollars per quarter.
What do you think of these expert predictions for 2024? Expect Bob Iger to extend his contract again, or have the tides turned on that? Will Disney acquire Candle Media and begin grooming Mayer and/or Staggs to replace Iger, or will it be Dana Walden who is crowned CEO-in-waiting? Expect to see streaming services merge next year? Thoughts on anything else discussed here? Are you optimistic about the company’s future as the Walt Disney Company? Think things will get better in 2024? Do you agree or disagree with our assessment? Any questions we can help you answer? Hearing your feedback–even when you disagree with us–is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!