Bob Chapek Out, Bob Iger Returns as Disney CEO

Michelle, so good to see you this morning. What do we know so far about the surprise change in leadership here? Well, it does seem that after 15 years at the head helm bob Iger did decide to leave Disney less than 11 months ago and now he is back for another two year tenure. So this surprise decision, as you pointed out, Chloe came down yesterday, the company announcing that the bob check check, who is the current, who was the current Ceo was leaving immediately to be replaced by bob Iger. Now previously was the head of the parks division, but it does signal that the company really is looking to find someone who is more media forward, especially at this time where it's very tenable for the company, especially considering that the box office is coming back. They're changing some plans with Disney plus to add advertising as well as other decisions that lead more into the tv production world, which bob Iger came from. So this does make a lot of sense for him to come back at this time. But definitely it is something that is surprising a lot of people, the markets reacting favorably, I saw was up about 9.5% in premarket trading. Yeah, Michelle and we, as we were discussing earlier, we do know that, you know, she was really Iger's choice for Ceo, but then they kind of moved apart, had a bit of a distancing happening among their strategies but why does Disney turning back to bob Iger this time make sense for the company. Well, you know, there was some good news in the last earnings report for Disney that they actually beat on the number of streaming subscribers that the street was expecting. But overall it wasn't Good news. They missed on a lot of different aspects when the street was expecting more revenue from the streaming division, they were expecting more revenue from the Parks Division and they missed on earnings per share as well as revenue. In fact, while Disney Plus was adding subscribers at a faster rate than the street was expecting, they also earned about $1.47 billion dollars in additional costs when it came to to funding the streaming services. And check, had said in the last earnings call that he expects this number to continue to grow through 2023 although he was confident that the company would be profitable by 2024 there was also signs that the traditional tv linear cable networks weren't adding as much ad revenue as they were doing. I think that the average revenue per user also dropped about 10%. So they, it does seem that Disney is looking for someone who can actually lead their media division, especially because they still see that as their most profitable vehicle going forward with all the uncertainty around Covid, still shutting down parks around the world. And Michelle, you mentioned Disney saying its streaming service should be profitable by 2024 but what major road bumps does it still face on this path? Well, I think the first thing we're going to see definitely is will people adopt the Disney plus with ads model? This is going to start at eight $8 a month. Starting on december 8th. Now this is going to replace the same price point as the Disney without ads, which is getting a $3 bump. We really want to see if uh, if IRS leadership will convince more people to sign up for Disney plus the second thing is will they be able to keep costs down? As I mentioned $1.47 billion spent on content and technology expenses on Disney plus last quarter. They really need to look at whether or not a peck, sorry Eiger can make sure that these costs are effective. You're also looking at who's gonna lead this company. The two people that Iger had handpicked peter rice and kevin Mayer, they're no longer with the company. These are people who are really well respected, both in the ad community and in the media community. Dana Walden has done a great job as the head of content for the linear and cable networks and the entertainment division in general. But we want to see where I go is going to go next. All right, Michelle, thank you so much for that insight this morning. That's cheddar news, senior reporter Michelle Castelluccio