Disney ‘sobered’ by outbreak
‘We’re incredibly resilient,’ Bob Iger says at an annual shareholder meeting.
Walt Disney Co.’s annual shareholder meetings are typically quirky affairs, with a mix of serious business matters addressing executive pay, as well as offbeat questions from children.
At Wednesday’s gathering in Raleigh, N.C., though, the event began on a more subdued note, as Executive Chairman and former Chief Executive Bob Iger addressed growing concerns about the novel coronavirus that has closed theme parks abroad and rattled global markets.
“It’s fair to say we’re all sobered by the concern that we feel for everyone affected by this global crisis,” Iger said in prepared remarks. “These are challenging times for everyone.”
He continued, however, by noting that the company has survived crises, includ
ing wars, economic downturns and natural disasters, during its nearly 100-year history.
“What we’ve demonstrated over the years is that we’re incredibly resilient,” Iger said. “If you think about the world today, what we create has never been more necessary or more important.”
Disney’s meeting of shareholders comes just weeks after the company named Bob Chapek as its new chief executive, replacing Iger after his 15-year run. Iger took on the role of executive chairman, where he is expected to guide the company’s creative endeavors, including programming for its key streaming services Disney+ and Hulu.
Chapek, 60, was previously chairman of parks, experiences and products after stints running Disney divisions including home entertainment and film distribution. At a pivotal moment for the company, Iger is handing the reins to a 27-year Disney veteran who has been steeped in the company’s culture and brands.
Still, Iger remained the master of ceremonies during the 70-minute presentation, where he officially introduced Chapek to investors in Raleigh.
“Bob is someone we know very well, and he certainly knows our company very well,” Iger said of the Disney veteran. “I can’t think of a better person to succeed me in this role.”
The meeting came amid growing concern about the effects of the coronavirus outbreak, worldwide cases of which have passed 125,000, including more than 1,200 in the U.S.
Disney’s parks in Shanghai and Hong Kong have been shuttered for weeks because of the coronavirus threat. The global panic has also disrupted supply chains for toys, including highly anticipated products based on the so-called Baby Yoda character from “The Mandalorian.” Executives did not say when the parks would be expected to reopen, nor did they give guidance about the potential hit for U.S. resorts.
The CEO change comes at a potentially challenging time for Disney’s dominant movie studio, which posted a global box office record last year but is not expected to match those results anytime soon. Coronavirus fears could have an adverse effect on the releases of major movies, including Marvel’s “Black Widow” and the liveaction remake “Mulan.” China, where theaters remain shuttered because of the virus, is a key market for “Mulan.”
Disney did not give any indication that it would adjust release plans for its movies, even after MGM and Sony Pictures delayed the debuts of the James Bond movie “No Time to Die” and “Peter Rabbit 2: The Runaway,” respectively.
Disney also continues to deal with the integration of assets it purchased last year from 21st Century Fox. Executive departures have included Emma Watts, the former president of production at 20th Century Fox whose role was diminished under Disney.
All eyes will continue to be on direct-to-consumer and international Chairman Kevin Mayer, who is tasked with growing Disney+, Hulu and ESPN+. Earlier this year, the firm said Disney+ had reached 28.6 million subscribers, mostly in the U.S., since its November launch. Mayer, 57, was thought to be considered for the CEO job but had far less operational experience than Chapek.
Disney shares fell $5.95, or 5%, to $105.51 in Wednesday trading amid broader market worries about the coronavirus and an oil price war between Russia and Saudi Arabia. The stock has declined 27% so far this year.
During the meeting, Disney shareholders voted 53% in favor of an advisory resolution supporting the company’s executive compensation plan. Disney has been criticized in the past for
Iger’s hefty pay package, which was $48 million in fiscal 2019. Investors rejected a shareholder proposal for greater disclosure of the company’s lobbying activities.
After the business portion, the Disney executives returned to the regular program, with Iger leading the proceedings as the company showed off video clips from Marvel’s Disney+ series “The Falcon and the Winter Soldier,” “Mulan,” “Black Widow,” the Dwayne Johnson comedy “Jungle Cruise” and Steven Spielberg’s adaptation of “West Side Story.”
Iger also announced that Disney will release a new Beatles documentary from Peter Jackson, “The Beatles: Get Back,” which features restored footage from the British band’s recording sessions for the “Let It Be” album. The film will be released in theaters in September.
Iger turned to Chapek to discuss parks initiatives. Chapek touted rave reviews for the Rise of the Resistance ride at Disney’s Star Wars: Galaxy’s Edge attractions in Orlando, Fla., and Anaheim. He also said that the long-awaited Avengers Campus at Disney’s California Adventure, which features Marvel characters including Spider-Man, will open July 18.
The question-and-answer session brought the usual round of eclectic comments from shareholders and activists, spanning inquiries about monorail maintenance and coverage of Formula 1 racing on ESPN.
A representative for a conservative think tank accused Disney’s ABC News of anti-conservative bias, specifically in its coverage of President Trump. He called out Disney’s decision to suspend journalist David Wright after a Project Veritas video showed him criticizing the network’s coverage and leadership.
Chapek defended ABC News, describing a “stellar track record” for objective reporting at the network.
“In terms of Mr. Wright, he said some things that made us question his objectivity,” Chapek said.
On a lighter note, a child attendee asked Chapek what advice he would give a future Disney CEO. Chapek’s response: “Storytelling is at the heart of everything you do.”
Another shareholder asked if the controversial Disney 1946 musical “Song of the South” would ever be available on Disney+ (Iger’s answer: It will not), and as a follow-up, whether Iger would sign a copy of his 2019 book “The Ride of a Lifetime” (answer: Yes.)
One shareholder asked Chapek what excites him most about the future of the company as he takes over as CEO. Chapek responded by acknowledging the challenge of living up to Iger’s run in the top job.
“I do understand the gravity of trying to fill this gentleman’s shoes,” Chapek said, referring to Iger. “But I’m ready for it.”
Iger closed by returning to the topic of the coronavirus, expressing confidence in Disney’s long-term health.
“These are obviously really challenging times,” Iger said. “Stay healthy, please.”