Iger rides again at Disney
Investors breathed a sigh of relief Monday after Bob Chapek was ousted at Disney. Shares jumped more than 5% after the company said on Sunday night that it was bringing back Robert Iger as head of Mouse House.
Iger will not have it easy. It brought Disney into its current structure with four major acquisitions: Pixar, Lucasfilm, Marvel, and the entertainment business of 21st Century Fox. The $71 billion purchase of Fox saddled the company with debt that forced it to suspend its dividend. The question remains open whether the current mastodon is really governable or whether it should be dismantled.
Despite speculation that Iger may have his eyes set on Netflix, it’s unlikely that Iger could usher in a new era of acquisitions. For one thing, antitrust regulators are unlikely to approve further consolidation in the entertainment industry. On the other hand, high interest rates likely preclude any new debt issuance to finance a major purchase.
It should not be forgotten that Chapek was handpicked by Iger as his successor. One of Iger’s most important tasks as CEO of Disney will be grooming the next leader. Keeping other talented executives on board while selecting an executive as the designated heir can be extremely difficult. Disney’s rivals will likely seek to poach executives alienated by the process. Either way, until Iger clarifies what he thinks went wrong with Chapek’s choice, there’s no reason to be convinced he can have more success with it. the following.
The internal pressures at Disney to move more and more towards enlightenment will certainly not diminish. On the contrary, Chapek’s overthrow will likely embolden Disney’s far left. That’s a problem for the company because the woke politics undermine the quality of its products and drive out the conservative families that Disney needs as customers. Whether Iger has the strength of character to push back remains to be seen. It will certainly be tested.
Fed Minutes Wednesday
The Federal Reserve is expected to release the minutes of its November monetary policy meeting on Wednesday. Fed watchers will be scanning the minutes for clues as to where the Fed will see its rate target land next year. After the November meeting, Powell indicated that Fed officials now see the rate rising beyond what they saw at the September meeting, when economic projections were last released.