Disney CEO Robert Iger at Town Hall Vows to Focus on Creativity
CEO tells employees that the company needs to chase profitability from streaming rather than new subscribers
Walt Disney Co. DIS -2.78% ’s Chief Executive Robert Iger told employees in a companywide town hall meeting that he will give priority to creativity and that he will chase profitability over growing subscriber numbers at Disney’s streaming services.
The town hall is Mr. Iger’s first since he was reinstated to the top job about one week ago after the board of directors ousted Bob Chapek. Mr. Iger, who was Disney’s CEO from 2005 to 2020, was met with applause when he was introduced at the Monday town hall and he responded by saying he thought he might cry.
Mr. Iger is facing a number of challenges in returning to Disney, including employee morale. Creative professionals in the company’s studio and streaming divisions, the so-called cast members that work in the parks and the engineers that develop and build the park attractions have expressed upset at various times over the past year about how Mr. Chapek was running Disney.
Dressed in a navy cardigan, white dress shirt and navy slacks, the 71 year-old Mr. Iger tried to ease the nerves of employees after a stressful week of shake-ups and uncertainty. Greeted with a large ovation by a few hundred executives invited to attend the town hall in person, Mr. Iger stressed the role of creativity in determining much of the company’s strategy going forward.
Mr. Iger said that he was recently listening to the music from the Broadway musical “Hamilton,” specifically the song “What Did I Miss?” sung by the Thomas Jefferson character, which contains the lines, “There is no more status quo, but the sun comes up and the world still spins.”
Mr. Iger was interviewed at the town hall by KABC-TV Los Angeles newscaster Leslie Sykes.
Mr. Iger said he doesn’t have any plans to alter a hiring freeze that Mr. Chapek had put in place earlier this month, and he added that he is taking cost-cutting measures very seriously. Mr. Iger told employees that travel and other expenses would be scrutinized carefully. Mr. Iger didn’t speak about the possibility of layoffs, which Mr. Chapek had also warned about.
Earlier this month, previous CEO Mr. Chapek announced companywide cost-cutting measures and told division leaders that layoffs were likely. The austerity measures included a ban on all but essential work travel and a freeze on new hires for all but a few critical positions.
Mr. Iger’s statements about seeking profitability rather than subscriber growth at its streaming business signal a shift in direction that investors and Wall Street analysts had been calling for. He said he wasn’t entirely up to speed on Disney’s spending and added he would spend where it will add value for the company.
Under Mr. Chapek and as part of his growth plan for the company’s streaming services, Disney increased its content spending dramatically, to around $30 billion this fiscal year alone. At the same time, it charged customers far less for Disney+ than most of its rivals, including Netflix and Warner Bros. Discovery Inc.’s HBO Max. This strategy helped attract customers, but led to ever-growing losses for Disney’s streaming division, which ballooned to $1.47 billion in the most recent quarter.
Asked about potential transactions, Mr. Iger said he didn’t see any on the immediate horizon.
“Nothing is forever, but I’m very comfortable with the set of assets that we have. I think they can serve our company,” he said, adding “don’t expect any headlines soon about deals.” He declined to comment on reports of a potential eventual sale of Disney to another company such as Apple Inc. but said, “what you’ve read is pure speculation not rooted in any fact.”
On the issue of employees returning to work as the threat of Covid-19 lessens, Mr. Iger said he wasn’t issuing any proclamations but believed people should be in the office and that leads to better creativity and teamwork.
“There is tremendous value of working in the same place,” Mr. Iger said, stressing that he thinks it enables creativity and is extremely important. He also said he believes there could be a negative impact on people who spend less time at the office. He did say, in an acknowledgment to long commutes, that if your drive is shorter at 4 p.m. than at 6 p.m. then leave at 4 p.m.
“I’m going to spend a lot of time here, and I hope it is not lonely,” he said.