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In 2026, Bob Iger will end his second run as chief executive of Walt Disney. The first time he was replaced by head of parks Bob Chapek. This time around the new CEO could come from streaming.
Succession planning is top of mind for Disney’s board. Officially, Nelson Peltz lost his fight against the company when he missed out on a board seat last month. Unofficially, the pressure the activist investor put on the group has already reshaped the company. His priorities included cost cuts and succession planning. Disney is cutting costs aggressively (though the proxy fight itself was expensive) and its share price is up 16 per cent this year. It is now working out who should replace Iger.
Possible internal candidates include Josh D’Amaro, who runs ‘experiences’ (ie parks and cruises) and co-heads of entertainment Alan Bergman and Dana Walden, who run the company’s film and TV businesses respectively.
Parks remain a vast source of operating income for Disney, and the largest area of employment. Average ticket prices are rising and the company is engaged in a push to expand the business — betting on more sales for in-person entertainment. These factors put D’Amaro, a long-term Disney employee, in a good position. On the down side, guidance for parks is not inspiring. In the next quarter, the company expects demand to ‘normalise’ from a post-pandemic high.
Revenue decline in Disney’s traditional TV business in the first three months of the year is a black mark for Walden. Expensive film flops including The Marvels, the latest instalment in Disney’s tired Marvel franchise, are a bad look for Bergman. But they can take credit for entertainment cost cuts that helped the streaming unit to post an operating loss of $18mn in the first three months of the year. This is a big improvement on the loss of $659mn in the same period last year, though it did not save the company from posting an overall $20mn net loss for the quarter.
Streaming success is the result of compromise. The company is licensing content to rivals and cracking down on password sharing. Spending more on content can still wreck gains. See ESPN, where Disney spent more money to add more football games to the slate and operating income fell.
There is one more reason to think an executive connected to streaming might be picked as the next chief executive. Peltz has pointed to streaming as a particular problem with Disney. But Iger, who was CEO when the group introduced it, views it as an inevitable shift. Promoting from the division would prove Disney’s commitment to the business.
