It’s been an interesting few days following the surprise Sunday night announcement of a change of leadership at The Walt Disney Company. CEO Bob Chapek is out and the man he replaced, Bob Iger, is back at the helm at the house of mouse. While the lackluster financial state of the company is the obvious reason this change was made, more details are coming to light that indicate Bob Chapek may have been making some shady decisions regarding the company’s financials, specifically around Disney+.
In a story in the Wall Street Journal (via WhatsOnDisneyPlus), it’s mentioned that the second season of The Mysterious Benedict Society, a Disney+ original series, was seeing its episodes debut on Disney Channel a day before they appeared on the streaming service. Something similar was apparently planned for the second season of Doogie Kameāloha, M.D. The reason for this, according to the report, was that by premiering the shows on Disney Channel, the production and marketing costs could be shifted to the cable channel, thus shrinking the costs of Disney+.
Disney+ has been losing money for Disney since its inception, something that was known and completely expected, but the streaming service reported a staggering $1.5 billion in losses during the last quarterly earnings call. While then CEO Chapek tried to spin it, saying that losses would only shrink from here, until Disney+ reached profitability in 2024, Wall Street did not respond well to the news. The earnings call is being cited as one of the major factors leading to the Disney Board making the move to bring back Bob Iger.
Walt Disney Company CFO Christin McCarthy was one of the people who was reportedly concerned about this shifting around of costs, she’s also one of the people who apparently had serious concerns about Chapek continuing as CEO and so it sounds like this may have contributed to that view.
If this reporting is accurate, and there’s no reason to believe it is not, then the whole thing is quite concerning. While shifting costs like this may not be strictly speaking illegal, it’s questionable at best. It looks like an intentional effort to make Disney+ look better financially than it actually was. It doesn’t change Disney’s bottom line, but it does make the segment of the company that has been the primary focus of the last two years look better than it is, which is not the sort of thing that stockholders and financial institutions tend to appreciate.
It also creates some interesting questions regarding Disney’s Media & Entertainment Distribution, the new vertical within Disney created by Chapek to manage nearly all of Disney’s media companies, including both Disney Channel and Disney+. Making these cost shifts might have been easier, and less transparent, because of the organization. The head of DMED, Kareem Daniel, left Disney on Iger’ first day back and in an email to employees, Iger said Disney would be returning to a more creator focused organization, indicating DMED may be getting dismantled entirely.
CinemaBlend’s resident theme park junkie and amateur Disney historian. Armchair Imagineer. Epcot Stan. Future Club 33 Member.
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