Disney earnings: Twitter has thoughts on layoffs, password-sharing, and streaming prices
In After the Call, Yahoo Finance’s Allie Canal discusses the conversation on Twitter and social media in reaction to Disney’s first-quarter earnings call.
SEANA SMITH: Allie Canal, who covers the company here at Yahoo Finance for us, taking a look at that on social media, across social media. Allie, what did you find?
ALLIE CANAL: Oh gosh, guys. There's a lot of reaction to this earnings report. But let's focus in on those layoff announcements. 7,000 workers will be cut in an effort to slash $5.5 billion worth of cost. I have this tweet here from a user KattVonKitten1 in response to these layoffs who wrote, quote, "Too bad they will be the ones that actually were out in the trenches working and not the ones sitting in the ivory tower."
And this is an interesting point, considering the backlash Disney has received when it comes to executive compensation. We have current Disney CEO Bob Iger, salary of about $27 million a year. Then the former, Bob Chapek, he was ousted. Paid $24.2 million in 2022. And guess what his severance payment was? More than $20 million.
And then it's not just the C-suite, because we had Jeff Morel. You guys remember that, the head of corporate affairs, received a whopping $3.4 million a month for just a three month stint at the company. That's $150,000 per day.
So it's these executives making these boatloads of money. And on top of that, we have Disney service workers rejecting a plan to hike pay by $1 an hour. That's in the background of all of this. So it's this reality that you're laying off 7,000 workers, but still spending aggressively in other areas, especially on the salaries of those higher level executives.
BRAD SMITH: Yeah. We heard a little bit more about what they're doing in the succession plan. And much of that had already kind of been telegraphed. Mark Parker, who is going to be the executive chairman once the vote continues or once the vote finally goes through, he's going to be leading that succession committee. I mean, is it clear at all who we can expect them to try to select or try to even bring up through the board in order to run this company at Disney, Allie?
ALLIE CANAL: I would say those that are in those big divisions. I mean, Dana Walden, Josh D'Amaro. Those come to mind. I mean, if you think about--
BRAD SMITH: Chapek didn't work last time. Chapek didn't work out.
ALLIE CANAL: That's true. Chapek didn't work last time. And that was a big thorn in Iger's side. And I think whoever it is, it's going to be very carefully selected, very highly debated. Because you can't have the same thing that happened with Iger happen with Chapek. But analysts have told me too it's almost a catch-22 because a lot of these executives that do come in to succeed Bob Iger, they might be looking over their shoulder being like is Iger really gone or is it going to come back?
And listen, after this earnings call, I get it. I get why Wall Street loves him. I get why analysts love him. He's a straight shooter. He tells it to you like it is and it makes it very easy for the investor to make decisions.
SEANA SMITH: Yeah. It does make it very easy for the investor to make decision. All right. We talked about the layoffs. Allie, I know you have a couple more tweets.
ALLIE CANAL: Yes.
SEANA SMITH: What's next?
ALLIE CANAL: So another tweet is by Robert. He says, quote, "I feel Disney is going to announce a password sharing crackdown real soon." No obviously this is alluding to Netflix and its very controversial move to curve password sharing, but I like this tweet because it's a perfect representation of what's happening in media right now, right? All of these companies prioritizing profitability. They're making money over subscribers.
Another example of that is Bob Iger saying on this call that there will be no more long-term subscriber guidance. That's something that we've also heard from Netflix. They are not going to be providing that going forward. And on the profitability side, Iger did say that Disney Plus will achieve profitability by the end of fiscal 2024. And he seems pretty staunch in hitting that target.
But I mean, you have password sharing crackdowns from Netflix. You have Disney cutting 7,000 employees looking to slash $5.5 billion of costs. This is something that's happening across the sector.
SEANA SMITH: Yeah, I don't know from the backlash though that we heard from Netflix, you would think Disney might think twice before implementing something very similar. I mean, it hasn't even come to the US yet and people are up in arms already.
ALLIE CANAL: Oh, I know. And I have received emails about this. I'm like the Netflix therapist. I said this on the show before. People are so concerned about this. And I don't-- you have to think that the competitors are watching Netflix really closely. But everyone's trying to strategize right now what their next move is.
BRAD SMITH: Wow. All right. This has been awesome. Allie, if we got one more tweet, just very quickly here. I know we've got to go.
ALLIE CANAL: Right. Real quick. One user writing, "How about you stop jacking the price up, Bob." And this one is focused on pricing. And Brad, I know you alluded to this. Iger admitting that there were elements of pricing that he got wrong. He said, quote, "Some initiatives were alienating to consumers."
And that takes a lot for a CEO of a major company like Disney to admit. Of course, a lot of that was related to the Chapek era. And we know that Iger and Chapek don't quite get along. Iger was a very, very clear that he was fine calling out Chapek's policies. He said that the former structure severed that link to creativity and it must be corrected. But I just think Iger made it very, very clear that he's going to really take a hard look at the park pricing, at the streaming pricing, and adjust need be in order to more appeal to the consumers.