A recent report alleges Disney’s ex-CEO Bob Chapek attempted to make Disney+ appear more profitable by shifting the budgets of various projects.
Per The Wall Street Journal, “people familiar with the matter” shared that shows intended to be (and billed as) Disney+ originals, including The Mysterious Benedict Society and Doogie Kameāloha, M.D., were aired first on other networks, such as the Disney Channel, so their production and marketing budgets wouldn’t be counted against Disney+. In this way, the streaming service was seen as losing less money on original content. Chief Financial Officer Christine McCarthy, who was reportedly one of the voices behind Chapek’s removal, was “concerned about this strategy.”
Chapek had a lot riding on Disney+, as he had promised investors that Disney’s streaming division, which also includes Hulu and ESPN+, would be profitable by 2024. However, 164 million subscribers for Disney+, roughly two-thirds of Netflix’s current number, and $30 billion invested in content in 2022 alone haven’t been enough to stop losses from increasing for the last four quarters. Overall, the streaming division has lost more than $8.5 billion since Disney+ launched in 2019.
In a surprising announcement on Nov. 20, 2022, Disney confirmed Chapek would be stepping down after less than three years on the job and would be replaced by his predecessor, Bob Iger. The returning executive, who held the top job at Disney for 15 years, oversaw such momentous moments for the company in the 21st Century as the acquisitions of Pixar, Marvel, Lucasfilm and 21st Century Fox. Since the announcement, rumors have been circling about why Disney’s board found Chapek’s leadership to be unsatisfactory. These include Disney+’s unpopular price hike and disparaging remarks he made about animation, which reportedly angered and alienated staff in Disney and Pixar’s animation departments.
There were also rumors in March 2022 that Chapek would be ousted over his mishandling of Florida’s “Don’t Say Gay” bill, which saw Disney employees stage a walkout amid Chapek’s refusal to condemn the bill and the revelation that Disney financially supported some of the Florida politicians behind the anti-LGBT law. Also of concern to investors was Scarlett Johansson’s lawsuit against the company for the direct-to-streaming release of Black Widow, which violated the contract she held with the entertainment monolith. According to insiders, many members of the board believe Chapek’s handling of the situation left much to be desired.
Source: The Wall Street Journal
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