Disney’s stock price is down 45 percent and on track for the company’s worst annual stock performance in nearly 50 years after a somewhat tepid opening for the sequel Avatar: The Way of Water.
The House of Mouse – which is already planning to freeze hiring and cut some jobs – has seen disappointing results beyond the James Cameron film in streaming services Disney+ and other ‘woke‘ flop films like Strange World.
Avatar: The Way Of Water made $434.5 million at the box office during its global debut, according to studio estimates Sunday, after director James Cameron said it needs to earn $2 billion to break even.
While the numbers aren’t a flop, they’re still behind the company’s stock price dropping nearly eight percent and putting it on course for its worst finish since 1974.
Disney’s stock price is down 45 percent and on track for the company’s worst annual stock performance in nearly 50 years after a somewhat tepid opening for sequel Avatar: The Way of Water
The sequel – which has at least one further film in the can and potentially more – made $134 million from North American theaters and another $300.5 million internationally for a $434.5 million global opening.
‘The Way of Water’ tied with ‘The Batman’ as the fourth highest domestic debut of the year, finishing behind several Marvel blockbusters like ‘Doctor Strange in the Multiverse of Madness’ ($187.4 million May), ‘Black Panther: Wakanda Forever,’ ($181 million in November) and ‘Thor: Love and Thunder’ ($144.2 million in July).
Disney was shooting for $500million worldwide, according to Forbes, which has caused a down reaction to the box office results.
It has been a troubling year for Disney, with Disney+ losing money despite increasing subscribers. The streamer lost $1.5billion in 2022, up from $630million in 2021.
Perhaps the biggest hit the company has taken was over outgoing CEO Bob Chapek’s handling of Florida’s supposed ‘Don’t Say Gay’ bill. It was reported that Chapek was fired after receiving several internal complaints from senior staffers that the exec was running the company into the ground.
The former CEO and now replacement, Bob Iger, publicly and privately would state he disliked how Chapek handled everything from the battle with Florida Gov. Ron DeSantis over the so-called ‘Don’t Say Gay’ bill, which led to the company losing major tax breaks to self-governance to Scarlett Johansson’s contract dispute over Black Widow.
Former Disney CEO Bob Iger (pictured left) fought the decision to name his controversial successor Bob Chapek (pictured right), who has since gone on to lead the company through some scandals and political controversies.
Iger and Chapek apparently clashed over the company’s response to COVID and their political decisions, with the two having completely different advisory team
Iger allegedly said he didn’t know Chapek was such a ‘novice’ when it came to handling these issues.
Chapek, for his part, was allegedly angry with Iger continuing to meddle in affairs he felt were his to deal with, especially during COVID, calling Iger saying he was going to help during the pandemic ‘a slap in the face’ according to one executive.
Iger later had regrets about stepping down while COVID continued to hurt the company.
‘If he had known and understood the scope of the pandemic, he never would have stepped down when he did,’ a former Disney executive said.
Chapek took over the company in February 2020 and earned $32.5 million in the year to October 2, 2021.
His compensation was comprised of $2.5 million in salary, $10.2 million in stock awards, and $3.8 million in stock options – plus a $14.3 million bonus.
Bob Chapek, 61, CEO of Disney, is seen on June 2 during the opening ceremony for Avengers Campus inside Disney California Adventure
Chapek was initially unwilling to speak out publicly against the so-called ‘Don’t Say Gay’ bill – something which his predecessor Bob Iger, 71, rebuked him for.
The bill, which Joe Biden called ‘hateful’ but which supporters say protects children, was signed into law by DeSantis in April.
On June 16, Disney announced it was delaying the opening of its Florida tech campus, which would have relocated 2,000 workers from California.
Disney officials insisted the delay had nothing to do with tensions with the clash with DeSantis and said they simply needed more time to build the campus.
It will house digital technology, finance, and product development employees – in the Orlando area and the company wanted to give workers additional time to adjust to the transition.
The new opening date for the Florida campus will be in 2026. The company’s giant theme park resort, Walt Disney World, is located about 20 miles away.
‘While a growing number of our employees, who will ultimately work at the campus, have already made the move to central Florida, we also want to continue to provide flexibility to those relocating, especially given the anticipated completion date of the campus is now in 2026,’ Disney said in a statement.
Chapek has come under fire for his clumsy handling of the row with DeSantis.
On March 7 he released a memo telling staff that Disney hadn’t released a statement sooner because ‘they are often weaponized by one side or the other to further divide and inflame.’
He later apologized for the company’s handling of the bill, saying Disney would pause all political donations in the state and increase support for advocacy groups working to combat similar legislation in other states.
Disney employees staged a series of walkouts earlier in the year in protest at Chapek’s failure to be more vocal on the issue – Disney employs 77,000 people in Florida.
Iger, meanwhile, tweeted his criticism of the new legislation. He told CNN+ that he thought it was a clear-cut issue.
‘A lot of these issues are not necessarily political,’ said Iger. ‘It’s about right and wrong.’
Bob Iger appeared to take a swipe at his successor as Disney CEO and his handling of the ‘Don’t Say Gay’ bill controversy, insisting that the issue was ‘about right and wrong’
Iger (right) is seen with his successor Bob Chapek (left), who took over in February 2021
Iger was asked by host Chris Wallace whether he felt a ‘vanilla’ company like Disney, which is not known for being edgy or political, should weigh in on controversial social issues.
‘I had to contend with this a lot,’ said Iger.
‘And the filter that I used to determine whether we should or should not weigh in, considered a few factors: What would its impact have on our employees, on our shareholders and our customers.
‘And if any one of those three constituencies had deep interest in, or would be affected by, whatever the matter was at hand then it was something that I thought we should consider weighing in on.’
Iger, who has reportedly irritated Chapek with his continued high-profile, setting the two men at loggerheads, said business leaders needed to be courageous.
He said that when dealing with right and wrong, or with something ‘that does have a profound impact on your business,’ he thinks one has to do ‘what is right and not worry about the potential backlash to it.’
Iger added: ‘I think CEOs, you know — one of the things that CEOs accept as a responsibility is that they’re going to have to weigh in on issues, even if voicing an opinion on those issues potentially puts some of your business in danger.’
On February 8, Biden spoke out against the bill, tweeting: ‘I want every member of the LGBTQI+ community — especially the kids who will be impacted by this hateful bill — to know that you are loved and accepted just as you are.
‘I have your back, and my Administration will continue to fight for the protections and safety you deserve.’
Several weeks later, on February 24, Iger tweeted: ‘I’m with the President on this! If passed, this bill will put vulnerable, young LGBTQ people in jeopardy.’
He told Wallace that he spoke out because he felt the bill was ‘potentially harmful to kids’.
‘So I happen to feel and I tweeted an opinion about this ‘Don’t Say Gay’ bill in Florida,’ Iger said.
‘To me, it wasn’t politics, it was what is right and what is wrong, and that just seemed wrong.
‘It seemed potentially harmful to kids.
‘And it seemed as though it would do exactly what it shouldn’t do.
‘And that is to foster compassion, and understanding and acceptance, and enable young kids who might be gay to feel more confident, more comfortable, more part of society, if it could be discussed freely, as opposed to kept in the closet.’
One suggestion for how Iger can repair the financial damage done by Chapek is spinning off TV networks ESPN and ABC into their own companies, which would allow them to focus on their own content and theme parks.
Disney has owned ABC since 1995 and ESPN since 1996.
