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Strike Pressure, Iger’s Desperation, & the ‘Barbie’ Effect

Photo: RB/Bauer-Griffin/GC Images
Matthew Belloni
August 11, 2023

It’s hard not to look at Disney C.E.O. Bob Iger’s recent moves as knee-jerk plays for quick cash: his reveal of big price hikes for ad-free Hulu ($18 a month) and Disney+ ($14, bundled for $20), both designed to meet Bob Chapek’s 2024 profitability goal; the fire sale in TV; and the quixotic quest for a deep-pocketed investor for ESPN. Now, most troubling: the Worldwide Leader’s sad $2 billion gambling gambit with Penn Entertainment, an also-ran, downmarket gaming outfit that incinerated $850 million in a terrible deal with the scumbag Barstool Sports impresario Dave Portnoy and is now looking to the Walt Disney Co. for a lifeline. Disney really shouldn’t be in business with a company like Penn, especially on this scale, but Iger has few alternatives.

I know, Disney’s interim C.F.O. Kevin Lansberry insisted the company’s cash reserves and leverage amid the cratering TV business are not problems, but Iger genuinely seems scared—scared of the expenses required in the streaming business; scared of the Wall Street investors who have pushed down the stock and asked growth and profitability questions he can’t really answer; and scared of the upcoming Hulu buyout. (Many analysts have pegged the deal as a $10 billion or so expenditure, but the valuation negotiation with Comcast could put a much higher price tag on the asset.) And then there’s the upcoming NBA rights negotiation, where Iger will almost certainly face off with Apple and Amazon, and maybe even Google.