The Walt Disney CEO Co. Bob Iger has reportedly tapped two former execs, Kevin Mayer and Tom Staggs, as consultants to help navigate the company’s transition to a streaming future.
Puck reported that the two will advise Iger, as well as ESPN chief Jimmy Pitaro, on Disney’s streaming strategy as the company faces an existential crisis, with Iger himself recently questioning whether its ABC broadcasting unit is still actually a “core” business, (rattling some nerves in process).
In a wide-ranging interview with CNBC’s Squawk Box earlier this month, Iger admitted that “… the distribution model, the business model that forms the underpinning of that business, and that has delivered great profits over the years is definitely broken. And we have to call it like it is, and that’s part of the transformative work we're doing.”
He also suggested that with the decline of the pay TV bundle, ESPN’s future was as a stand-alone DTC streaming offering. “There’s almost a guarantee that that occurs. It's an advertiser’s dream. There’s a great demographic there and it lends itself to technology in many ways,” he said.
Mayer and Staggs will also advise ESPN chief Jimmy Pitaro as the company courts strategic partners for an ESPN streaming service. But that transition is expected to be particularly painful, sending shockwaves through the distribution industry where live sports is a long-standing cornerstone of the business model. Pundits estimate that, stripped of its cable bundle subsidies, a standalone ESPN would have to charge at least $30 a month just to break even and it’s not clear how many die-hard fans would be willing and able to pony up that much.
Both Mayer and Staggs were once considered top contenders for the CEO position.
Mayer was instrumental in Disney’s M&A spree, snapping up Pixar, Marvel and Lucasfilm. He also spearheaded Disney’s streaming strategy leading up to the launch of Disney Plus. He left in 2020 when he was passed over for the top job in favor of Bob Chapek, whose somewhat disastrous two-year stint as CEO came to an abrupt end in November when the company’s board of directors lured Iger out of retirement with one key priority — find a successor.
The board recently extended his contract through 2026 to give him more time to cultivate an heir to the “Magic Kingdom.”
Staggs previously served as CFO, chief operating officer and head of theme parks. He left in 2016.
In 2020, Mayer and Staggs partnered to form a well-funded special purpose acquisition company (SPAC) to look for targets in the telecom, media and technology space. Blackstone-backed Candle Media has gone on to acquire Hello Sunshine, along with Moonbug Entertainment and a stake in Will Smith and Jada Pinkett Smith’s entertainment company, Westbrook Inc.
