Bob Iger’s CEO Contract Extended (Again), The Bob Iger Question, Iger Hints at Divestitures and Partnerships

Hello everyone. It’s good to be a back after a mini summer vacation.

We kick things off where we left off: with Disney. There was quite a bit of news on the Disney front and Apple is once again being pulled into the story. The update begins with Neil’s thoughts on Bob Iger’s CEO contract being extended for another two years. We then look at the question that needs to be asked regarding Iger and Disney. The discussion concludes with the major takeaways from Iger’s interview with CNBC at Sun Valley.

Let’s jump right in.

Bob Iger’s CEO Contract Extended (Again)

Back in November 2022, the Disney board fired CEO Bob Chapek and appointed his predecessor Bob Iger, as his replacement with a two-year contract.

One of Iger’s top priorities was said to be identifying his successor – something that he supposedly spent years doing prior to hand-picking Chapek to succeed him. This past February, Iger told CNBC he had no intention in staying longer than two years.

It looks like Iger needs more time to find that successor. In a press release issued on July 12th, here’s Disney:

"The Walt Disney Company Board of Directors announced today that Robert A. Iger has agreed to continue to serve as Chief Executive Officer through December 31, 2026. In voting unanimously to extend Mr. Iger’s contract by two years, the independent members of the Board of Directors noted that Iger’s extension provides continuity of leadership during the Company’s ongoing transformation, and allows more time to execute a transition plan for CEO succession, which remains a priority for the Board."

This marks the fifth CEO contract extension for Iger, going back to 2013. In the 2010s, a Bob Iger contract extension was accompanied by confidence and relief that Disney got to benefit from Iger’s expertise for more time. Today, it’s the opposite. An extension only raises more questions and doubt about the company’s leadership and lack of succession. The explanation given by Iger last week

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Disney Earnings, Disney’s Anti-Netflix Strategy, Apple Got It Right With TV+ (Daily Update)

Hello everyone. We will kick things off with Disney earnings. The discussion includes Iger’s strategy for Disney+ and how Disney is following an anti-Netflix strategy. We conclude with the ways Apple got paid video streaming right with Apple TV+. Let's jump right in.

Disney Earnings

It’s been nearly three months since Disney board’s brought Bob Iger back to replace Bob Chapek. Last week’s earnings release represented Iger’s first one back as CEO.

In what has been a recurring earnings theme with Disney, the Parks segment results were stellar (21% revenue growth and $3B of operating income) while Direct-to-Consumer experienced a $1.1B operating loss. Linear networks (U.S.) saw flat revenue and $0.9B of operating income, testaments to how legacy TV continues to hang on.

Here are Disney’s DTC subscription totals (as of December 31st, 2022):

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More on Apple’s Buyback Plan, It’s All About Apple Free Cash Flow, Iger vs. Chapek (Daily Update)

We begin today’s update with a few additional takeaways from Neil’s new report on Apple’s share buyback program. The discussion then turns to a key different between Bob Iger and Bob Chapek and what it means for Disney’s approach to blockbuster movies.

Hello everyone. Welcome to a new week. It’s good to be back after a few days off.

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Let’s jump into today’s update.

More on Apple’s Buyback Plan

The newest Above Avalon Report examined where things currently stand with Apple’s share buyback program and what the future will likely bring.

In recent years, somewhat of an understanding has taken hold when it comes to Apple’s buyback. Wall Street is not as doubtful about Apple’s ability to fund both share buyback and its investment opportunities (capex, R&D, M&A). This doesn’t mean that Apple’s share buyback lacks unknown.

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Disney CEO Talks ESPN’s Future, Apple’s Sports Play, Apple Watch Ultra Reviews (Daily Update)

Hello everyone. Let's begin today's update in the live sports world.

Disney CEO Talks ESPN’s Future

Last week, Disney CEO Bob Chapek, who recently had his CEO contact extended by three years, sat down with CNBC’s David Faber to talk about ESPN and where live sports goes from here.

Here’s Chapek:

“We're hard at work in our offices, both on the east coast and the west coast, figuring out how we make it more friction-free sports environment for our viewers. And obviously, some of these things take the cooperation of a lot of the people in the ecosystem, whether they be the leagues, other broadcast partners, but we foresee a world where ESPN, even more than ever, is the pinnacle of all your broadcast needs and we’re excited to continue working on that and at some point, when we’re all fully backed, we’ll come back.”

Chapek referred to four broad working areas as to where Disney is focusing ESPN's energy:

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Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

The daily updates have become widely read and influential in the world of Apple and technology. They are unmatched in the marketplace in terms of comprehensive analysis and research on all things Apple. Members reside in 60 countries and hold a diverse range of backgrounds and occupations. They include Silicon Valley executives and investors, the largest Apple shareholders, and the leading Apple journalists in the business.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.