Disney CEO Announces Major Investments and Streaming Plans
Activist Investor Pressure
Walt Disney CEO Bob Iger has responded to activist investors by revealing a $3 billion share repurchase program and a 50% increase in dividends. These announcements follow pressure from activist investor Nelson Peltz to improve the company’s streaming business and box-office performance. The moves have led to a nearly 7% increase in Disney shares in after-hours trading.
New Investments and Streaming Service
Disney has authorized a $3 billion share repurchase program and a 50% increase in dividends. The company also announced a $1.5 billion investment in “Fortnite” maker Epic Games and plans to launch an ESPN streaming service in 2025. Additionally, Disney revealed a joint venture with Fox and Warner Bros Discovery to launch a streaming sports service.
Response to Activist Pressure
Disney CEO Bob Iger has addressed the pressure from activist investor Nelson Peltz, stating that the quarterly results and new initiatives demonstrate the team’s motivation and focus. Iger emphasized that the company remains optimistic about its future and aims to avoid distractions from activists with different agendas.
Financial Performance and Streaming Business
Disney posted earnings of $1.22 per share, exceeding analysts’ forecasts, and cut $500 million in costs. The company reaffirmed guidance that its streaming business would reach profitability by September and reported a significant improvement in streaming operating losses. However, Disney+ lost 1.3 million subscribers after a price increase in October.
Entertainment and Theme Park Results
The Entertainment unit’s streaming business reported revenue of $5.5 billion, with theme park results buoyed by new attractions at Hong Kong Disneyland and Shanghai Disney Resort. The unit reported revenue of $9.1 billion and operating income of $3.1 billion, demonstrating resilience in the face of challenges.