Bob Iger Confirms Disney Profits Driven by Entertainment and Parks Rivalry
Disney’s CEO, Bob Iger, has highlighted a competitive dynamic within the company, particularly between its parks and entertainment divisions. During a recent earnings call, he emphasized the significance of both sectors in driving profitability.
Competition Between Parks and Entertainment
Iger noted that Disney is experiencing healthy internal competition. He stated, “we have a healthy competition now in our company in terms of which of those two businesses is going to essentially prevail as the number one driver of profitability.” He expressed confidence that both divisions will see growth due to substantial investments.
Future Leadership and Expansion Plans
The recent discussions come as Disney’s board is expected to announce Iger’s successor imminently. Key candidates for the role include Josh D’Amaro, the chief of Parks & Experiences, and Dana Walden, co-chair of Disney Entertainment.
Reflecting on the past, Iger recalled that in 2005, the return on invested capital in parks was “not impressive and not acceptable.” He attributed this to limited expansion efforts. However, he highlighted the impact of acquiring significant intellectual properties (IPs) such as Pixar, Marvel, LucasFilm, and 20th Century Fox, which led to improved profitability in parks and resorts.
Growth Trajectory in Parks
As Disney expands its global footprint, Iger spoke positively about future projects. He noted a recent visit to Abu Dhabi, identifying it as a strategic location to tap into a large, untapped population. He remarked on the modern, advanced construction methods being utilized for new developments.
“I am very, very bullish on that business and its ability to grow,” he stated. This optimism comes in light of Disney’s overall performance, with the company reporting approximately $24.7 billion in revenue and over $5 billion in operating profit in the last quarter.
Fiscal Highlights
The Parks & Experiences segment played a significant role in these financial results, contributing about 40% or $9.4 billion of the total revenue. This division also accounted for 60% of the operating profit, a total of around $3.11 billion.
As both the entertainment and parks sectors show promising growth, Iger reaffirmed the bright future ahead for Disney, stressing the resilience of the company’s movie and streaming segments following challenges posed by the pandemic.
