We’ve all known television has been in a period of upheaval and decline for years. With streaming services spending billions of dollars a year on content and many consumers fleeing cable amidst rising prices, the gradual shift away from linear TV has been collectively accepted as inevitable, but exactly what that meant for the giant companies still involved with linear TV has always been a question mark. Would they stick it out? Would they sell? Well, Disney CEO Bob Iger recently sat for an interview and now, those questions are louder than ever.
The sitdown happened earlier this month with CNBC, and you’ve no doubt seen some of the headlines that came out of it. He talked about Governor DeSantis and Disney’s lawsuit against Florida. He talked about the SAG-AFTRA strike and diluting the Marvel brand with too much content. Also, more quietly, he talked about linear TV and dropped the bombshell that ABC and its other channels “may not be core to Disney,” meaning there’s potentially a future in which they’re either not part of the Mouse House’s extensive portfolio or they’re so insignificant they don’t matter to the overall direction of the business. Here’s what he said…
They may not be core to Disney. Now there’s clearly creativity and content that they create that is core to Disney, but the distribution model, the business model that forms the underpinning of that business, and that has delivered great profits over the years, is definitely broken. And we have to call it like it is. That’s part of the transformative work that we’re doing… The disruptive forces that are preying on that business are greater than I thought.
Bob Iger typically chooses his words very carefully, and if he doesn’t want to talk about a subject, he won’t talk about it. So, the fact that this came out publicly feels like a message he wants people to hear, but exactly what that message is still feels up for debate. Variety asked a variety of insiders both within and outside the company, and there wasn’t anything close to an agreement. Those on social media have been arguing about it for a week, and there’s still no consensus. But it seems like there are two distinct schools of thought.
The first perspective is that Disney is going to sell or at least look around to sell ABC, its local TV stations and its other non-ESPN networks like FX and National Geographic. That would explain why it spun ESPN off as its own business unit. Perhaps Iger is signaling to the market that other companies should make offers but doing so in a way that allows him enough distance in case he doesn’t end up selling ABC. Inferring you may sell something is very different than telling everyone you’re going to sell it.
The other option here is he wants to hold on to ABC and the other stations, but he doesn’t want to constantly be answering questions about how less people are watching and/ or why they’re less profitable. If you say a particular part of the business isn’t core to the future, then it starts to become less pressing to outline its future. Someone is going to keep making money off TV for as long as it exists as a business, and Disney may well decide it’s the right company to do that. It just might want to quietly do that in the background.
I don’t know what Disney is going to do with ABC and its other networks. ESPN was recently rocked by extensive layoffs. Questions are swirling about attendance at the theme parks. There are lawsuit problems in Florida. Collectively, there’s a lot of headwinds right now, which is the whole reason why Iger un-retired and returned as CEO in the first place. It’ll be fascinating to see how he manages it in the next few years. Fortunately, given his long track record, he’s earned the benefit of the doubt.
