The company initially refrained from speaking out against the bill publicly but reversed itself after an internal revolt. Mr. Chapek then denounced the legislation, which earned him the ire of conservatives, including Florida Gov. Ron DeSantis. Last month, Republican lawmakers in Florida revoked a 1967 law that allowed Walt Disney World to function as its own quasi government. In the wake of the uproar, Geoff Morrell, who joined Disney in January as its most senior government relations and communications executive, resigned last month.
Revenue at Disney increased 23 percent compared with last year, to $19.2 billion, but missed analyst expectations. Disney said it took a hit from a decision to pull some of its content back from other distributors in favor of its own channels, which meant a reduction of $1 billion in licensing revenue as part of a trade-off to grow its direct-to-consumer business.
Disney reported earnings per share of $1.08, missing analyst expectations of $1.17.
Disney’s theme parks unit came roaring back from a year ago, when the Covid-19 pandemic stunted in-person attendance. Revenue in the division doubled compared with the same period last year, with a new line-skipping system driving increases.
As streaming services look for more subscribers, India is shaping up to be an important market. Deep-pocketed media companies are preparing to bid for rights to show cricket matches from the popular Indian Premier League. Disney currently has the rights to stream the matches on its Hotstar service, which it acquired in its 2019 megadeal with 21st Century Fox. Losing those rights could be a blow. However, Mr. Chapek has said that Disney can reach its subscriber targets even if it does not retain those rights.
On a call following the earnings announcement, Mr. Chapek said that Disney would eventually become more aggressive about moving major live sports onto the ESPN+ streaming service. The cash generated by the lucrative portfolio of ESPN cable channels currently makes that untenable, so the company is taking a measured approach to sports streaming, Mr. Chapek said.
Article source: https://www.nytimes.com/2022/05/11/business/disney-subscribers.html
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