Conflict at Walt Disney Company: A Distant Memory?
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Even in the midst of a severe recession that has de- pressed tourism and a digital
revolution in the media business, Disney is faring better than many of its rival companies.
Although spending at its theme parks is down and fewer people are buying DVDs of recently
released Disney movies (e.g., Bolt and Beverly Hills Chihuahua), Disney has positioned itself
well to ride out the recession by having a broad mix of businesses in its portfolio. For example,
Disney’s sports cable network, ESPN, and ABC Family and Disney channels have reported an
increase in operating profits in 2009. The creation and marketing of well-known franchises such
as the Jonas Brothers is helping to fuel the company’s success. The Jonases have already
performed onstage to over a million people, sold over 750,000 copies of a book, starred in their
own TV show on the Disney Channel, and will star in an upcoming full-length movie. Also, in an
attempt to capture a larger share of the growing online viewer market, Disney recently bought an
equity stake in Hulu, the online video platform. In addition, the Disney Pixar creative partnership
(Disney bought Pixar) is continuing to produce popular and profit- able animated movies such as
Wall-E and Up.
To what degree have these business decisions been successful? Disney was ranked 67th in the
Fortune 500 list of largest companies in 2008. Also, it surpassed other media companies,
including Time Warner and News Corp., in terms of its stock performance and return on invested
capital. Disney has become the largest media conglomerate in the world with a market value of
about $40 billion.
Who has been the driving force behind many of these business decisions? Robert (“Bob”) Iger
took over as CEO in 2005. Known to many as “hard- working and likable,” Iger has not only had
to make a...