Bob Iger Talks About Trian Partners’ Activist Moves At Disney

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Following is the unofficial transcript of a CNBC exclusive interview with Disney CEO Bob Iger on CNBC’s “Squawk on the Street” (M-F, 9AM-11AM ET) today, Thursday, April 4.

Disney CEO Bob Iger on succession: It’s really important to have a good transition process

Disney CEO Bob Iger: Nelson Peltz didn’t bring any new ideas

Disney CEO Bob Iger on streaming: We have to turn it into a growth business

Disney CEO Bob Iger on joint sports streaming venture: We want to serve sports fans in multiple ways

DAVID FABER: Thank you. Yeah, I’m here on the Disney lot or is Mr. Iger just called Walt’s House. It’s good to have you Bob, Bob Iger of course, CEO of Disney, emerging victorious from slugfest of a proxy fight. You won by substantial margins. But I do wonder Bob 31% of shareholders did say they liked to have Peltz on the board. Do you listen in any way differently to that shareholder base? Does it make you think about the things you’ve done any differently? All right, you won you won big but 31% still said hey, you know what? We prefer to have this guy on the board.

BOB IGER: Well, this whole process gave the board and some members of management an opportunity to engage with many shareholders, perhaps on an even deeper level, and have a good honest, candid dialogue where we had an opportunity to describe the shareholders, what our priorities are and what our various processes are including succession. And we had an opportunity to listen to them and hear what was on their minds as well. So I think if anything came of this from that it’s positive is that it did in fact, increase the engagement that we’ve had with shareholders in this and that’s a very good thing.

FABER: Yeah. I mean, you spent a lot of time with those shareholders over these last few weeks and months.

IGER: Yes

FABER: I wonder is there was there one or two themes in particular that, as you mentioned this, that that sort of helped you kind of focused more than you might have previously?

IGER: Well, I think what we heard was, was, surprisingly, maybe consistent with exactly what our priorities are maybe not surprising, by the way. Clearly, shareholders are interested and care very much about succession. It is the board’s number one priority. They’ve been spending a significant amount of time on that we have a succession committee, that Mark Parker, our Chairman chairs and James Gorman, who just joined our board is on. They met seven times last year. They intend to meet even more this year, that they are confident they will choose the right person at the right time. And they have some time to do that. But it again, they’re treating it with a sense of urgency because it is so important. Clearly shareholders care about that, given what the company has been through these last few years.

FABER: Yes.

IGER: As you’d expect, they care about what ends up being our top priorities strategically. They want to know about the future of ESPN. They want to know about streaming and how that can be profitable. They care about the quality of our films, and they’re very interested in growing our parks and resorts business, where we said we’re going to spend $60 billion over the next 10 years amazing consistency in terms of subject matter and the list of priorities

FABER: And all things we’re going to talk about in the in the time to come here

IGER: Well but make no mistake, though, because you mentioned the 30% a few times. This was decisive in terms of what how shareholders voted, as I think, a true endorsement of the board and management and the direction we’re taking this great company

FABER: stock went up. The first time he had a proxy fight, the stock went up, then it came down when Peltz went away. It went up again during this process he seems to believe in part that he’s helpful in terms of getting you guys to focus and or there would be those who say, Well, an activist is helpful in getting management to focus and actually it has a good effect on the stock price. How do you react to that argument?

IGER: Well, first let’s talk about the stock price. The stock is up over 40% since the beginning of October, there was a slight bump when he announced his interest in basically the second proxy fight. And then actually the stock drifted down after that, and then it went up when we announced our November earnings. He then mentioned the slate and named a slate had drifted up slightly and then went down again. And then we had our February earnings which were sensational and it went up significantly. The market is reacting to how this company is performing. It was not reacting really to the activist.

FABER: Right and not the idea, though, that you’re going to be even stronger in your communications even more focused in terms of articulating what it is you’re trying to do and or you’re more focused on it as a result of somebody on your back.

IGER: I came back about 16 17 months ago and immediately established a set of well first of all wanted to stabilize the company could have been through a tough time immediately established a set of strategic priorities, with great alignment with the board actually. And we’ve been executing against those priorities since early in my second tenure, and I think the results of implementing them and we’re just at the beginning in many respects, but the results are already being felt in a positive way by the company. I think it’s reflected in our performance, particularly in our November earnings and our February earnings. So if you’re asking me whether this caused us to have any greater sense of urgency about those priorities or any more focus absolutely not, if anything, it was distracting. It took time when we should be spending our time on those priorities. And one of the things that you know, I feel great about right now today is put the victory aside, that I can spend all of my time with the management team and the board on executing against those things that are really important

FABER: Yeh I have made the point many times and have in other campaigns as well. It is an enormous distraction potentially for management takes a lot of time. I assume that was the case for you as well.

IGER: It did take a lot of time. I continue to spend a lot of time on those priorities. You have to still watch the films and engage with our businesses on what their strategies are and execute against them. So if you can’t take your eye off the ball, but another great subject is introduced that. It does dilute your time to some extent.

FABER: Yeh you’ve got to travel, you got to get in front of shareholders. You got to spend a good amount of time just thinking about it. I mean, did it become personal for you? Know it involved like Perlmutter, you and I have talked about this in the past that this very spot I think there’s no love lost between the two of you. Was it a personal kind of contest in some way beyond just a proxy contest?

IGER: On my side no meaning I was supporting the interests of the company, not my personal interests and defending what the company and the board was doing as opposed to defending myself against criticism from Nelson and the people who were backing him. If you’re asking whether it was personal on their side, you probably should ask him, he probably would say no, I think there probably was, to some extent a degree of personal animus that was on the table here,

FABER: You did fire him. I mean he didn’t like that.

IGER: Well, we closed the Marvel offices and it did result in Ike leaving the company but I’m not going to put words in his mouth at all. I had my my opinions about it all but again, we were defending the company against the criticism of Mr. Peltz in this case. And actually tried not to consider it a personal attack on me because I didn’t think that was really of great benefit to Disney.

FABER: No but you’re a very competitive person and you wanted to crush them, didn’t you?

IGER: I wouldn’t put it that way. If you’re asking me whether I wanted the company to prevail. Yes, because I you know, I knew exactly what was important to the company. I knew what we were doing. And I was extremely confident I remain confident and very optimistic about what we’re doing. And I just didn’t think it was necessary to essentially to essentially bring Nelson Peltz onto the board nor did the board feel that but given the fact that he didn’t bring any new ideas, and he wasn’t going to have an impact on the company that we’ve deemed was going to be positive anything there was a belief that it could be a distraction, and ended up being more destructive than productive.

FABER: Well I’m curious on that, because there had been speculation that were he to have won a seat on the board, you might have accelerated your own departure from the company. Is that true?

IGER: Well, he didn’t win a seat on the board, and I am back to where I was before all this happened, which is spending 100% of my time on this company, and I will just leave it at that. it’s important for

FABER: It is instructive to think about how you were thinking about things if in fact that happened.

IGER: It’s important for the management team and working very closely with the board to have the ability that includes the time to focus on the most important matters. And anything that occurs that takes away from that, that is that distracts us in some form is a negative and so as I said his presence on the board we believe the board believes could be distracting, and that might have made it very, very difficult for us to do our jobs the way we feel they need to be done.

FABER: Finally on succession, which ended up being – sort of it did, especially towards the end, the real focus here and ISS made it a focus of their decision to recommend Peltz for the board. Have you changed your approach at all? You mentioned the seven meetings. I’m just curious, is the process been accelerated in any way? What updates can you give us beyond the fact that you’re focused on it?

IGER: Well, the board engaged in a succession process the moment I came back and a very – they’re taking it very, very seriously. I don’t think it has changed because of the activism battle at all. They established this as their number one priority from the moment I came back, they formed a committee right away, they’ve been meeting regularly, they’re gonna meet even more regularly going forward, because I’m not going to be here forever and –

FABER: You are for another two and a half years though, right?

IGER: Well, but I think it’s really important to name the right person at the right time and to create a transition process that is healthy.

FABER: How long do you see that transition process?

IGER: I can’t say.

FABER: I mean, is it a year? Is it, you know –

IGER: Not determined. But I think it’s really important to have a good transition process. You know, this is a big complicated company. And not only is it important to choose the right person, but it’s really important to give that person all the opportunity in the world to be successful in the job. And the board is very focused on who the person is, when the decision should be made, and essentially how the handover of sorts will take place.

FABER: How does the failure to have done a successful transition last time inform your own actions this time?

IGER: Well, look, the transition the last time around – could not have happened at a worst moment for the company and in the world. Covid hit soon after Bob Chapek was named CEO. I think one of the things that I don’t think has been as understood as it should have been over these last few years is what happened to this company during that period of time. Probably suffered more than most companies in the world, given the fact that people were not going to the movies. People were not going to theme parks. Initially live sports were not occurring. And just as important production wasn’t going on. There were no movies or television shows being produced. This company was hit very, very hard. And it handed my successor a set of challenges that were enormous in nature, and hopefully that will not be the case the next time around. I don’t think that the – there’s much more I can add in terms of the process itself or the transition. Obviously, you know, we all have learned from the past and we’re eager for this process to be successful not just in the choice of my successor but ultimately how that person takes over.

FABER: Right. I guess when you say you’ve learned from the past, is there anything you can share in particular –

IGER: No.

FABER: –about the decision making?

IGER: Not really, no.

FABER: Because it’s not like you hadn’t spent a lot of time with Chapek. We’ve talked about it. I mean, you spent a lot of time with him.

IGER: Yeah, I think look, that was – now it’s 2024, that was implemented four years ago. I said we’ve learned from it, we’re focused on the future, not the past at this point. I think that’s also really important. If you can’t do anything about what happened, you just have to make sure it doesn’t happen again.

FABER: We’ll talk about the future now because as we always do. Let’s talk about streaming. Continue the long conversation we’ve had or I remember I think in fact, our first – when you first introduced it we did our interview –

IGER: Yeah. 2017. No, I think 2017.

FABER: Is it ’17 or ’18? $6.99. I remember the –

IGER: A long time ago.

FABER: Yeah, the price point was a long time ago, too. But, you know, you cut the losses dramatically in the last quarter. You mentioned the stock moving of course, in part, I think a lot of it moved on that idea that this business is going to be profitable, and it really will be. You’ve been talking about it becoming a growth business. You haven’t really given specifics on what your expectations are on margins. But I am curious at this point now and you know, you mentioned some positive things a month ago at a Morgan Stanley conference, what can you tell us in terms of how things are shaping up for the direct to consumer business, which is such an important component of investors view of the company?

IGER: It is. Maybe I can provide a little bit more specificity. First of all, you know, we’ve done really well in terms of streaming in the sense that we launched Disney+ only in 2019. So it’s just over four years ago. In a very, very short period of time we find ourselves second to Netflix in terms of global subscribers for pure streaming business. We know that we ended up losing a lot of money on that. More so than we expected initially. Part of that was because we were chasing sub growth and not as focused as we needed to be on the bottom line. I came back, the losses were around $4 billion a year. It was clear that that was not sustainable and not acceptable. And the goal was, first let’s reduce those losses. And as we’ve said, we’re going to be profitable in our fiscal fourth quarter this year. We lost I think 130 some odd million dollars in the last quarter. That’s a huge, huge improvement. And we know exactly how we delivered that improvement. Now what we have to do is turn in not just into a profitable business, but into a growth business. A business that has margins that this company and our shareholders would really be proud of–

FABER: Double-digit margins then, right? –

IGER: Eventually, eventually, yes. Double digit margins, of course. The way to do that is actually very, very clear to us. It’s very, very clear that we need more engagement in terms of consumers spending time on the platform. We just launched, which is a very compelling product, which is Hulu on Disney+ that came out of beta last Friday, actually, and I can tell you that it is doing extremely well. We’ll have more to say about that in our next earnings call. But we feel great about the engagement of those Disney subs who are not getting Hulu who are now watching more programs that were on Hulu including Shogun as a for instance, which is which is a great hit. So we have to increase engagement. We need the technological tools to lower churn, create more stickiness. It’s things like recommendation engines, getting to know our customers better. We need to reduce the cost of marketing, we need to reduce the cost of customer acquisition to get the margins up obviously. I think we have to program more smartly, particularly outside the United States, which is to pick the markets where we could really move the needle and program with really strong local programming. We’ve had some success there. We need more success. Password sharing is something else. In June we’ll be launching our first real foray into password sharing –

FABER: You will?

IGER: Just a few countries in a few markets, but then it will grow significantly with a full rollout in September.

FABER: Cracking down on password sharing, essentially.

IGER: Yes. And all of that, obviously, all the things that I mentioned are components of what will turn this business into a business that we feel really good about.

FABER: Well you sound like you’re describing what Netflix already is. I mean, do you ever get to a point where you can actually have margins that Netflix has?

IGER: Well, I think it’s a little – it would be a little premature for me to say yes to that. You know, I’d certainly – we would certainly be great if we could. We aim as I said for this business to be a growth business for the company with margins that our shareholders will feel good about. We know how to run businesses well, high margin businesses, parks and resorts a great example of that as a for instance. I’m confident that we’re on the right path but we still have a lot to –

FABER: You want to clearly be the clear number two though, to Netflix. And I mean you already are. You probably don’t even like to hear me say number two. I know you. But that’s what you are. And that wouldn’t be a bad place to be.

IGER: That would be fine. But I think – I wouldn’t say that’s necessarily the goal, but I – look, Netflix is the gold standard in streaming. They’ve done a phenomenal job and a lot of different directions. You know, I actually have very, very high regard for what they’ve accomplished with, you know, if we can only accomplish what they’ve accomplished that would be great –

FABER: I guess when I mention –

IGER: But the good news here is that we know what we have to do. And look, we start with a very strong hand. Obviously we’ve talked about it for years, but Pixar and Marvel and Lucasfilm and Disney and the array of content that we have – the acquisition of 20th Century Fox looms large in this process because we get control of Hulu, we get significantly more content, including, you know, Family Guy and The Simpsons and Avatar and I could go on and on. We get great talent that came with it as well, and a global footprint that is broader and deeper in the number of markets. So I think we have the goods and now we’ve got to execute.

FABER: I mentioned too in part, and I think of Apple and Amazon separately. What I wonder is, do you think the other streamers can effectively compete, you know, does there need to be more scale in general, would it help you if in fact there was more consolidation among some of the competitors?

IGER: I don’t know if it would. I think we know what you need to be successful in streaming and not everybody has that. And I’m not sure everybody can get it. We know that we can, given everything that I’ve discussed, given what you know, obviously, the content that we have, and the technology that we’re building and the brands that we have I don’t think everybody does, though, I think that there’s got to be some consolidation in the business.

FABER: You know, I want to talk about those sports joint venture, but it occurs to me, given the bundling, essentially, that you’re doing there. Is there a time you can imagine a bundling of streaming products entertainment streaming, products, so that Disney Plus is bundled with Max, for example? And even with a Netflix, is that a real possibility?

IGER: Well, let’s take a step back because you mentioned sports. We are bundling right now with ESPN Plus but when he has been ultimately as launched as what we call a flagship product which is basically the full suite of ESPN services, there will be a great opportunity for a bundle of ESPN with Disney Plus and Hulu and a bundle that is very consumer friendly meaning part of.

FABER: Understood. Do you ever see a day when there could be a bundle not of you know but of competitors in a sense, to make it easier for the consumer in the same way that you are bundling sports with Warner Brothers Discovery and Fox.

IGER: Yes, I think there are possibilities there. Sure.

FABER: You do. On the sports JV, where do we stand right now in terms of, I know there’s an antitrust question. You have a new CEO for it. Price hasn’t been announced yet. Right?

IGER: No. We have an idea. We’re proceeding as though this is going to clear basically government scrutiny. You mentioned we hired a CEO. They’re iterating in terms of what the what the experience will look like and feel like and I think – I don’t know that we’ve announced the date yet. I can’t –

FABER: You talked about the Fall.

IGER: I think that’s right. We have no more specifics on that. We feel good about it. We think it’s actually a sports fans delight in terms of being able to watch all those sports in one place. Very pro-consumer.

FABER: Any trust issues that you know, are being raised by potential competitors?

IGER: Well, we know that some are raising the issues. We’re proceeding as though we’ll prevail.

FABER: Price, do we have a sense there?

IGER: Too soon. Yes, I do. I have a sense.

FABER: Mid 40s?

IGER: Not gonna say. It’s too soon.

FABER: You keep bringing up ESPN flagship and I do wonder and again, I know you’re not going to talk price. But why have that anymore? If I as a sports consumer have access to this joint venture. Let’s say I’m paying 45 bucks. Why am I going to spend another 30 on an ESPN over the top product? I don’t quite understand what that is for the consumer.

IGER: Well first of all, we haven’t gotten specific about how the pricing will work. I think you have to assume that if someone is already buying the joint venture product, that will take it into be taken into account if someone wants to buy so called flagship. What we’re trying to do is basically serve sports fans in multiple ways, if sports fans want, who are not part of current multi-channel bundles already or were and basically cancel their subscriptions, that’s certainly one way to serve them. If they’re not interested in that and they just want ESPN and by the way, what ESPN so called flagship service will be significantly more than what the ESPN component of the joint venture will be. If they liked that, they’ll be able to get that too and what we’re trying to do is serve sports fans in multiple ways and create real convenience too.

FABER: So you don’t see it as a reason not to do an ESPN over the top flagship product as you describe it, which I think you’ve talked about potentially as soon as 2025 hitting the market.

IGER: Correct.

FABER: The existence of this JV. Do you have a name for this JV yet?

IGER: No, if you got any ideas, please. We have a suggestion box.

FABER: But you see them being able to access both because we talked so often about when you would take ESPN, eventually over the top and I just I still do find myself wondering well, with the existence of this product, does it make it less of a need?

IGER: Look ESPN over the top, again, it’s gonna have multiple features to it. There will be fantasy sports, the opportunity to bet on sports basically right off the app. There’ll be significantly more consumer engagement and interaction, interactive capabilities so it’s not the same thing again, what ESPN is trying to do is serve the sports fan in multiple ways.

FABER: Are you still looking for an investor for ESPN? I mean that was something we discussed at Sun Valley this summer. The NFL network – is that still out there?

IGER: We’re looking for strategic partners. We don’t need an investor.

FABER: Sorry, strategic partner. Is that still happening?

IGER: We’ve had ongoing discussions. Nothing more to add.

FABER: No but it feels like it’s gone on for a while –

IGER: It’s complicated.

FABER: Do you think there’s really a chance that something could happen?

IGER: Look, I don’t want to predict. we’re engaged in conversations. We think if we can, if we can reach the right agreement with the right partner, that it’s a really worthy thing to do.

FABER: I want to move on to some other news because we’re already running short on time. You’ve settled up with Florida, is that over and done with that? Are you happy with the new arrangement there?

IGER: There’s still a federal case so over and done, not completely. There’s still the free speech case. But you know, we view what we did there is really, I mentioned on our annual meeting call the other day, I guess it was just yesterday it was like a month ago, that we call it a win win. This is a good thing for the state of Florida and a good thing for the Walt Disney Company. We settled the matter on a state level. And this gives us an opportunity to engage more effectively and more deeply with the oversight board, which has also been reconstituted to some extent and make the kind of investments that we need to make in that business not only to grow our business but to grow in terms of the state of Florida, create more jobs, more revenue for the state of Florida. It’s a good thing that we did.

FABER: It is and so we can expect no more hostilities between Governor DeSantis and the company.

IGER: Well, I would hope not but I can’t speak for Governor DeSantis in that regard.

FABER: You know, speaking of hostilities, I mean, I know you are aware of Elon Musk and what he’s been, continues to say or at least post on his X platform. How do you approach that? You know, somebody who’s got such a big microphone as Musk kind of coming after you all the time.

IGER: I ignore it.

FABER: You do?

IGER: Yeah. Just there’s no, there’s no relevance to the Walt Disney Company or to me.

FABER: So, when he says I would, you know, buy shares if Peltz was on the board and—

IGER: Next subject.

FABER: Comes after you as being because he’s on his anti-woke campaign.

IGER: People have been coming after me and the company for years. And it’s just, I don’t get distracted by those things.

FABER: But the woke thing has had more of an impact. I mean, you’ve said to me that you would love to be just out of the culture wars. Do you feel like you’re succeeding in that?

IGER: Well, I think yes, I mean, I think the noise has sort of quieted down. I’ve been preaching this for a long time at the company before I left and since I came back that our number one goal is to entertain. I think, but the term woke is thrown around rather liberally. No, no pun intended in that regard. I think a lot of people don’t even understand really what it means. The bottom line is that infusing messaging as a sort of a number one priority in our films and TV shows is not what we’re up to. They need to be entertaining and look, we’re the Disney company can have a positive impact on the world whether it’s, you know, fostering acceptance and understanding of you know, people of all different types, great. But, generally speaking, we need to be entertainment, an entertainment first company and I’ve worked really hard to do that.

FABER: You have.

IGER: I have and—

FABER: In what way? What do you mean when you say that?

IGER: Engaging with our our executives, engaging with the creative community, you know, returning to our roots, you know, making sure that everybody’s aligned on what our priorities are, you know, and understanding that look, we’re trying to reach a very, very diverse audience. And on one hand in order to do that, what you, the stories you tell have to really reflect the audience that you’re trying to reach, but that audience because they are so diverse, really, first and foremost, they want to be entertained and sometimes they can be turned off by certain things and we just have to be more sensitive to the interest of a broad audience. It’s not easy, you know, so that you can’t please everybody all the time.

FABER: Right. Does the prospect of a Trump presidency change your approach at all or concern you at all given that may raise the volume yet again on this anti-wokeness kind of?

IGER: Look, the Walt Disney Company is 100 years old. You know, obviously—

FABER: And you’ve worked there for more than half of that now.

IGER: I have. I know that’s hard to believe. It’s a very special company with a, you know, a mission to entertain in a world let’s let’s pause for a moment and understand that the world needs to be entertained today. And I don’t know how many presidents have been in office since Disney was founded in 1923. I know that nine have been in office since I started in 1974. That’s pretty extraordinary.

FABER: It is pretty extraordinary. It’s pretty extraordinary that you’re still doing this.

IGER: Yes.

FABER: 1974.

IGER: Richard Nixon was president when I started. Yeah, it’s a long time ago.

FABER: Well, he was almost on its way out. You still gonna be able, you’re good for the next two and a half years?

IGER: Yes, I look, this is a great job.

FABER: It doesn’t seem like it’s been that great of a job lately.

IGER: It’s still a great job, and I will not lose sight of that. It’s a great company and a great job. We have a lot to do. I’m excited about a lot of what we’re doing. I’m optimistic that we’re going to accomplish all the things that we’ve talked about and more.

FABER: You have that you have that you have that confidence at this point.

IGER: I do.

FABER: I mean, again, we’re still waiting on a lot of the things for you to deliver on, some you already have in terms of—

IGER: Well, we’ve already—

FABER: Buybacks and dividend increases and the like.

IGER: Yes, absolutely. Just look at the bottom line, delivering more than 8 billion dollars in free cash flow this fiscal year, almost double what we delivered last year. You mentioned the dividend, buying stock back, investing the right amount of money in the right businesses like our experiences business which has had tremendous returns on invested capital. ESPN is a phenomenal brand. You know, a lot’s been said about ESPN in terms of skepticism about its future and basically the reliance on the old business model.

FABER: Yeah, well, we’ve talked a lot about it—

IGER: Friday—

FABER: Since August of ’15.

IGER: Friday night ESPN put, had a doubleheader women’s college basketball game. The game one which is Iowa versus LSU, which is a rematch of the championship last year, highest rated college basketball game ever on ESPN, men’s or women’s. That game rated higher than every game of the World Series, four I think of the games of the NBA Finals, the Golden Globes, I could go on and on. They’re very very, that to me, speaks volumes about ESPN as a brand and as a business.

FABER: Although it’s not nearly the contributor it was to the company years ago.

IGER: ESPN still—

FABER: I mean I know it’s profitable.

IGER: ESPN is still highly profitable. Their ratings have been up the last couple of years, their operating income has been up the last couple of years. We’re engaged in basically positioning ESPN well for its future. But it starts basically with a great foundation. How can you not be optimistic if you’re running the Walt Disney Company?

FABER: Oh, well, I mean, my god, you’ve just recently with Julia, you were going through all the things that you encountered when you first came in, they didn’t sound like a great list. I mean you want me to quote you? I mean it went on and on.

IGER: These jobs come with as you can imagine a lot of challenges and a lot of complexity, but I wouldn’t trade this job for any other job in the world. So maybe no job I don’t know.

FABER: Yeah, well, maybe we’ll get back to that one day. Real quick, I, the one thing I also the Epic announcement from last quarter and gaming, I did want to just get you to weigh in on that. I mean, how important do you see that in terms of gaming overall given the time spent and whether you’re going to make an even larger commitment down the road?

IGER: Soon after I came back, Josh D’Amaro runs our experiences business and his head of games came to me with basically a demographic analysis of who was playing games and essentially what the trends have been and I was blown away that something like 32% of screen time among young people meaning Gen Alpha and Gen Y, Gen Z, Gen Z I’m so old I forget my my my alphabet. And they were spending as much screen time on that as watching movies and television. Obviously, when you’re managing a company like this, you got to manage for operational excellence today. You have to prepare the company for the future as well. So it’s foot in the present, foot in the future. Thinking about the future, if we don’t engage with those demographics, then where are we? And so it seemed not not just of interest, but in but incredibly important, vital almost that we enter that space more aggressively and we’ve been licensing and doing well. But we haven’t really been investing that significantly for a long time. And so the opportunity to engage with Epic came up because they had been part of an incubator program or an accelerator program at Disney some time back. We had a relationship with them already. A lot of Disney goods were being sold on Fortnite and so I had lunch with Tim Sweeney, I think in June, who founded Epic and then we started talking about what was possible and over lunch, we kind of designed the Disney universe that could live next to Fortnite. We engaged immediately after that in negotiation and announced something in November which we’re really excited about, including an equity investment of modest in Epic, and look, could it expand? Possibly. Right now, our goal is create the universe that’s going to live next to Fortnite, make sure that successful and if it is and hopefully it will be then look to see where we can invest further beyond that.

FABER: Bob, we’re out of time, but I look forward to future conversations.

IGER: Nice to see you David.

FABER: Nice to see you as well. And thank you for having us.

IGER: Pleasure.

FABER: Bob Iger, the CEO of Disney. Carl, back to you.

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