Amidst the outbreak of the coronavirus pandemic and a dropping stock price, former Walt Disney Co. CEO Bob Iger has returned to his post, only one month after leaving the position, to help save the company. Iger is joined by Bob Chapek, the new Disney CEO, and has been developing new strategies to keep business going during this time of uncertainty.
Iger has come onto the scene with a variety of fires to put out. One of these is dealing with the drop in the company’s most profitable division, parks and resorts. Revenue brought in by Disney parks and resorts in 2019 was $26.23 billion dollars, which represents 37.7% of total revenue for the year, according to Statista. With all Disney parks and resorts, which includes Disney Cruises, closed since mid-March due to the pandemic, there is uncertainty over how this will impact future revenue.
Another issue impacting one of Disney’s divisions is studio entertainment. As the pandemic was reaching the United States, Disney was set to release the live action remake of Mulan, which cost an estimated $200 million to produce, according to CNN. It was lined up to crush the box office in China, the second-biggest movie market behind the United States.
Iger and Disney took the initiative and chose to delay the release of live-action Mulan to July 24 , 2020. This is an attempt by Iger to salvage the remains of what was supposed to be their biggest movie of the year. Still, revenue predictions also haven’t taken into account the movies that Disney has planned for the next several years and where production has been postponed.
Iger has been taking this time to also ramp up the other segments of Disney, including media networks. The company’s networks brought in an estimated $24.83 billion in revenue in 2019, which accounted for around 35.7% of total revenue that year.
Media networks have been hit particularly hard, as Disney-owned ESPN has not been able to function due to the pandemic affecting sports like men’s college basketball and the start of the NFL’s season.
While there remain many issues to iron out, , Direct-to-Consumer and International has been generating the steadiest revenue out of Disney’s subsidiaries, mainly with their online streaming product Disney+. With the addition of new content in quick succession, Disney+ might be the salvation that the company has been looking for, as the country and world remain stuck at home.
On April 15, Disney announced that subscriptions for the streaming service have grown over 50 million, up 56% from its previous figure. With live-action movie studios and subsidiaries such as AMC Theatres shuttered or only partially open, Disney+ will be Disney’s most important product during the pandemic, and Iger plans on milking the service for all its worth.
During Iger’s tenure at Disney, he has faced many challenges, but the coronavirus will surely be the toughest of them. Chapek will be taking the reins of Disney again as permanent CEO once the pandemic comes to a conclusion, but the company will look very different from the start of the year, depending on the outcomes of Iger’s strategy for the next few weeks.
