Disney Shares Fall On Mixed Quarter Amid Hulu & Succession Overhang; Wall Street Analysts Say Stock Undervalued

EXCLUSIVE: The third wave of layoffs at Disney got under way today, sources tell Deadline.

If the feud between Disney and Florida Gov. Ron DeSantis was going to be escalated yet again, parks chief Josh D’Amaro didn’t seem like he would be the one to do it.

If you figured the war between Disney and Gov. Ron DeSantis was going to take a breather for the weekend, think again.

It was a great night for Disney as Indiana Jones And The Dial Of Destiny had a smash debut in its World Premiere Thursday evening at the Cannes Film Festival where the June 30th release received a warm 5 minute standing ovation, especially for Harrison Ford in his swan song in the title role he started playing 40 + years ago. There noticeably to witness the French love and affection was none other than Disney boss Bob Iger attending his first-ever Cannes Festival (believe it or not) and even taking his own photos during the ovation for the movie. At the Carlton Beach after party I told him Deadline had just been the first to post its review, a rave (from our colleague Stephanie Bunbury) and you could see the absolute relief on his face. “You have made me very happy to hear that, ” he told me, and he meant it. All this came on the same day Disney took another shot at Florida Governor Ron DeSantis by announcing the cancellation of a plan to move several thousand California employees to Florida. The Cannes respite must have been nice.

Just over a week ago, Bob Iger rhetorically asked the adversarial  Gov. Ron DeSantis if Florida really wanted Disney’s considerable business and tax revenue, or not. Now, without mentioning the would-be presidential contender nor his attacks on the company, the Mouse House has pulled some of that business and taxes revenues from the Sunshine State.

Todd Spangler NY Digital Editor Disney has pegged total cash content spending at around $30 billion for this year — but the ongoing Writers Guild of America strike may drive that down, CFO Christine McCarthy said. “If you haven’t noticed we’re in the middle of a writers strike,” McCarthy said, speaking Wednesday at MoffettNathanson’s Technology, Media and Telecom Conference in New York. The WGA walkout may reduce Disney’s cash spending on content for the balance of the year, she said. At the MoffettNathanson conference, MCarthy appeared alongside Disney president of ad sales Rita Ferro. The two Disney execs spoke a day after the media conglom’s upfront presentation in the Big Apple to ad buyers and brands — which was noticeably light on scripted fare, given the writers strike. Marvel’s Kevin Feige previewed upcoming Disney+ series “Secret Invasion,” featuring Samuel L. Jackson and Don Cheadle, and announced premiere dates for “Loki” Season 2 and “Hawkeye” spinoff “Echo.”

It was a tale of two coasts today, as WGA picketers and their allies targeted Disney’s upfront presentation in New York and also the company’s Burbank lot in Los Angeles. And the two scenes were very different.

Rita Ferro, Disney’s ad sales and partnerships chief, urged media buyers at the company’s New York upfront Tuesday to “lean into all aspects of diversity” with their marketing commitments.

The CEO of NBCUniversal parent Comcast said it’s “more likely than not” the company will end up selling its third of Hulu to Disney, after his Mouse counterpart indicated clearly last week that this would be Disney’s preferred outcome. There’s been some grandstanding over the past year as the deadline approaches, but both of Hulu’s parents appear to be on or near the same page now.

Comcast CEO Brian Roberts addressed the company potentially selling its 33% stake in the streamer. “I think it’s more likely than not,” Roberts said. “I’m pretty certain if and when we sell our Hulu stake, it’ll be for more than what we have, and in fact, that’s contractually certain.”Disney currently owns 67% of Hulu with with Comcast’s NBCUniversal holding a minority stake.

The CEO of NBCUniversal parent Comcast said it’s “more likely than not” the company will end up selling its third of Hulu to Disney, after his Mouse counterpart indicated clearly last week that this would be Disney’s preferred outcome. There’s been some grandstanding over the past year as the deadline approaches, but both of Hulu’s parents appear to be on or near the same page now.

Todd Spangler NY Digital Editor Shares of Disney slipped as much as 9% in trading Thursday after the media conglomerate reported earnings for the first three months of 2023. Disney’s earnings report showed progress on the cost-cutting front — with streaming losses narrowing for the quarter — but analysts cited a weak advertising outlook and uncertainty over when its streaming business can contribute to the bottom line. As of 11:30 a.m. ET, Disney’s stock price was $92.86/share, down 8.2%, and off its 52-week high of $126.48. Disney+ lost 4 million subscribers for the quarter ended April 1, including a loss of 300,000 in the U.S./Canada. But the company narrowed its streaming losses by $400 million, down 26% year over year, and Disney said it would remove content from Disney+ to cut costs while also expecting to raise prices on the ad-free Disney+ tier. In addition, CEO Bob Iger announced that the company would launch an integrated Disney+/Hulu “one-app experience” in the U.S. by the end of 2023 — indicating Disney’s desire to hold on to Hulu.

Cynthia Littleton Business Editor Disney is going on a diet — but Hulu is still on the menu. Disney CEO Bob Iger and chief financial officer Christine McCarthy delivered a clear message on Wednesday to Wall Street and to Hollywood during Disney’s quarterly earnings call. Disney will cut the overall volume of content produced for its streaming platforms — primarily Disney+ and Hulu — as it deals with a much tighter macroeconomic environment, not to mention the uncertain impact of the writers strike that began May 2. After spending just under $30 billion on content in Disney’s 2022 fiscal year (which ends in September), Iger has targeted $3 billion in savings for 2023. Of that $30 billion, about 30% is devoted to sports rights for ESPN and ABC Sports.

second fiscal quarter of 2023, CEO Bob Iger addressed the artificial intelligence elephant in the room, making it clear that Disney isn’t shying away from the technological frontier — quite the opposite, in fact.“AI developments represent some pretty interesting opportunities for us,” Iger said. “In fact, we’re already starting to use AI to create some efficiencies and ultimately to better serve consumers.”Beyond confirming that AI has already found a home within the house of the mouse, Iger addressed the natural challenges that come with any new, disruptive technology, including the managerial complexities.“It could be extremely difficult to manage, particularly from an IT management perspective,” Iger said, referring to the tech’s advanced nature.

Disney chief executive Bob Iger weighed in on AI today, staying general but calling the battleground technology good for Disney’s business, but disruptive.

combined into one app offering by the end of the year on Wednesday, Disney CEO Bob Iger has suggested that the future of the hybrid subscription/ad-supported streamer remains in the hands of rival Comcast. Under a 2019 put/call agreement, Disney can buy out the NBCUniversal parent’s 33% minority stake in Hulu as early as January 2024 – and Comcast can require that Disney do so.

What many saw as inevitable has finally come to pass. During the company’s annual earnings call, Disney CEO Bob Iger revealed that the Walt Disney Company will roll out a singular streaming app by the end of 2023.

William Earl Disney CEO Bob Iger criticized Florida governor Ron DeSantis’s political moves in Florida on the company’s May 10 Q2 earnings call. The business-political feud was brought up as a result of a shareholder asking about the parks in Florida while there are political battles with the governor. “Regarding Florida, I got a few things I want to say about that bill,” he said. “First of all, if the case that we filed last month, made our position and the facts very clear, and that’s really that this is about one thing and one thing only and that’s retaliating against us for taking a position about pending legislation. And we believe that in us taking that position we are merely exercising our right to free speech. Also, this is not about special privileges or a level playing field or Disney in any way using its leverage around the state of Florida.

Todd Spangler NY Digital Editor Disney is pulling Hulu tighter into the Mouse House. On Disney’s earnings call Wednesday, CEO Bob Iger said the company will soon launch a “one-app experience” in the U.S. that incorporates Hulu content into Disney+. The new combined offering will launch by the end of 2023, he said. “While we will continue to offer Disney+, Hulu and ESPN+ as standalone options, this is a logical progression of our [direct-to-consumer] offerings that will provide greater opportunities for advertisers while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” Iger said.

Disney+ saw its average monthly revenue per user in the U.S. and Canada surge 20% during the second fiscal quarter of 2023, increased from $5.95 to $7.14 due to an “increase in average retail pricing.” CEO Bob Iger told analysts on the company’s quarterly earnings call Wednesday that a recent increase in the price of the streaming service was “de minimis.”The company continued to see losses shrink in its direct-to-consumer division.