Disney battle with Ron DeSantis one of investors' top issues
Investors cited Ron DeSantis, Bob Iger's successor and other areas of concern before the earnings report
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The Walt Disney Company will have the attention of many investors come Wednesday.
The entertainment giant will put out its third-quarter financial results for fiscal 2023 in the afternoon, with a call for analysts and investors slated to follow shortly thereafter. They will mark the third set of earnings that CEO Bob Iger has presided over as CEO since coming back to Disney late last year.
Here are some issues that have been top-of-mind for Disney investors.
Iger Succession
Under the contract extension Iger signed in mid-July to add two years to his current stint at the helm of Disney, the CEO will continue in his role until the end of 2026.
Iger said in a statement about the extra years that Disney’s board "continues to evaluate a highly qualified slate of internal and external candidates." Mark Parker, the chairman of the entertainment giant’s board, has led that effort.
Bob Iger attends a basketball game between the Los Angeles Clippers and the Phoenix Suns at Crypto.com Arena on April 20, 2023 in Los Angeles, California. (Allen Berezovsky/Getty Images / Getty Images)
Reports have suggested Disney Entertainment Co-Chairs Dana Walden and Alan Berman and Disney Parks, Experiences and Products Chair Josh D’Amaro have emerged as potential candidates from within the House of Mouse.
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Iger also reportedly recently rehired Kevin Mayer and Tom Staggs, who have been tasked with giving advice on Disney’s legacy television businesses.
Potential spinoff of TV assets
Iger indicated in a mid-July CNBC interview that Disney could possibly be open to spinning off the traditional TV assets it currently owns. He told the outlet the company was being "expansive" in its thinking, adding that the assets "may not be core to Disney."
DISNEY CEO IGER HINTS AT SELLING MEDIA ASSETS
For ESPN, Iger said Disney was "going to be open minded there too."
In this photo illustration, the American sports media conglomerate majority-owned by The Walt Disney Company, ESPN, logo is seen displayed on a smartphone with an economic stock exchange index graph in the background. (Budrul Chukrut/SOPA Images/LightRocket via Getty Images / Getty Images)
"Not necessarily about spinning ESPN off, but about looking for strategic partners that could either help us with distribution or content, but we want to stay in the sports business," he said, according to a CNBC transcript.
Disney’s linear networks brought in $6.6 billion in the second quarter, marking a 7% decrease from the $7.1 billion they saw in the same period last year.
Disney shares underperforming S&P 500
Disney’s stock has been trailing behind the S&P 500 on both a year-to-date and 12-month basis.
The broad S&P 500 index has experienced an over 17.6% rise from the start of 2023 as of Tuesday’s market close. Comparatively, the value of Disney shares have seen little change, dropping just under 1% in the same timeframe.
Over the past 12-months, Disney’s stock has gone down 18.5%; meanwhile, the S&P has climbed about 9.1%.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DIS | THE WALT DISNEY CO. | 115.67 | +0.94 | +0.82% |
Walt Disney Co
Desantis-Florida conflict
Disney and Republican Florida Gov. Ron DeSantis are currently engaged in a legal battle.
That started after the Florida State Legislature moved earlier this year to pass legislation that made it so that the people on the board running the special tax district encompassing Disney World were appointed by the governor. The new board has since taken over what is now called the Central Florida Tourism Oversight District.
Park guests stroll past the statue of Walt Disney and Mickey Mouse in the Magic Kingdom at Walt Disney World Friday, July 14, 2023, in Lake Buena Vista, Fla. Disney is asking a Florida judge to toss out a lawsuit filed by Gov. Ron DeSantis' appointee (AP Photo/John Raoux / AP Newsroom)
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Iger has accused DeSantis of seeming to be retaliating against Disney’s stance on the Parental Rights in Education law and trying to punish the company. Disney, while led by former CEO Bob Chapek, had expressed opposition to the state law.
Joe Toppe contributed to this report.