Robert Allen Iger offers to extend his term as Disney CEO
February 08, 2017 – Walt Disney and Roy O. Disney founded The Walt Disney Company in 1923; the two brothers initially named the company “Disney Brothers Cartoon Studio.” The company changed the name to “The Walt Disney Company” in 1986. Disney now has three main departments; namely Parks, Media, and Consumer Products departments. It is one of the biggest companies in the world with an annual income over $50 billion. Disney has around 200,000 employees. Robert Allen Iger is currently holding the CEO’s position at Disney. He reached to this position in 2005. He was retiring in 2015, but later decided to continue serving as the CEO of Disney until mid-2018.
Today, Iger said [in a statement] that he is willing to extend his term as Disney CEO if the company thinks that this would be the right move to make. His announcement is coming a day after Disney’s quarterly earnings report was made public. The initial reaction from investors was dovish and it took Disney’s share down approximately two percent. The earnings were little short of what investors were hoping to see. The company’s income is impressive, but investors are comparing it to last year’s [4th quarter] earnings, which were boosted by the huge success of the movie “Star Wars: The Force Awakens.”
Disney released the second movie in the latest Star Wars franchise this year, but it could not bring as much income as the last year’s movie did. As a result, the earning per share is less than the earning for the same period last year. Investors are also worried about the dropping subscribers of ESPN. This famous sports channel fell short on revenue due to drop in advertisement earnings.
To give investors hope, Bob Iger offered to remain the CEO of Disney if that is in the best interest of the company. After his statement, Disney’s share recovered. Investors are eager to know who is going to replace Iger; they will welcome the decision to extend Iger’s term as the CEO. Investors really like Iger because under his management, the company saw huge growth. Disney has already announced that the number of ESPN subscribers will soon increase. They said that they have a plan to improve ESPN’s subscriber database, which will bring in more revenue from advertisements.
The total revenue of Disney in 4th quarter of 2016 was $15.26 billion; in the same period this year, Disney’s revenue dropped to $14.78. Yes, the revenue dropped, but the company is still making huge money. This is a small drop and you have to consider the fact that last year’s Star Wars movie was a huge success.