Who Iger Answers To

Iger at the Gates

One of the highest paid executives on Earth is credited by many in Hollywood with holding unionised creatives to the fire as if it were his personal inclination.  But it is strategy, not animus, that drives experienced CEOs with legacies to protect.

The Walt Disney Company’s CEO, Bob Iger, is now infamously attributed as saying, “Let them loose their houses!” as members of the Hollywood actors’ union, SAG-AFTRA, prepared to join Hollywood’s WGA screenwriters onto the picket lines against income losses to the major Studios.  The apparent analogue to Marie Antoinette’s mis-reported, “Let them eat cake” seems uncanny.  Although Iger has never been quoted as the source of that statement, which first appeared in a Deadline article as coming from a “studio executive”, the animosity generated within the hearts of nearly every human being who does not earn millions of dollars a year was instant.

Waived off by most as posturing for the sake of negotiation, the incendiary comments solidified a public perception of Studio bosses as aristocratic analogues, out of touch with reality and unconcerned for the welfare of those that enable their financial success and power. 

Iger’s actual contemporary remarks were more sober and chosen, reinforcing a position that the Studios were still in transition and not yet ready to share the wealth.  As reported widely by Vanity Fair, Iger was briefly interviewed by CNBC’s Squawk Box on the fringes of the exclusive Allen & Company Sun Valley Conference in Idaho, an annual media finance conference hosted and funded by the private investment firm.

“And they are adding to the set of challenges that this business is already facing that is, quite frankly, very disruptive,” Iger remarked, referring to Hollywood’s writers and actors.  In effect, Hollywood and much of the world perceived Bob Iger as the face of a privileged, over-indulged industry executive class that grossly abuses their bargaining position with absolute disregard for the real-world insecurities of the creative classes in favour of corporate greed that they benefit from directly.

From a professional PR perspective, the messenger may have seemed less than humane, particularly given his celebrated financial rewards for leading one of the world’s largest content distribution businesses.  But corporate communications from highly experienced executives are rarely anything but purposeful and designed for effect.  The message being sent could not have been more clear to an intended audience actively tasking Studio bosses to push Hollywood beyond the confines of Los Angeles County and into a wider world that makes up most of the industry’s markets and revenues.

The message Iger’s words conveyed was, ‘We know what we are doing and they do not.’

An interesting related article for you.

Creatives Can Beat the Studios

Creatives Can Beat the Studios at Their Own Game; And Should

But will they?  The only obstacle to equity in the Media & Entertainment industry is a mindset carefully cultivated by decades of corporate control that is today a mere illusion.

The key to understanding Igor’s words, and the direction of this industry, is in the identity of the intended audience.

Peer Pressure

The Alliance of Motion Picture and Television Producers, or AMPTP, is the trade organisation representing the Studios in the dispute against the WGA and SAG-AFTRA.  The AMPTP represents over 350 American television and film production companies, and certainly voices the interests of the largest.  Each of those largest members are media companies belonging to multi-billion dollar publicly-listed conglomerates. 

Like all publicly-listed companies, the perceived financial value of media brands such as Disney, Netflix and Apple TV+ is reflected in the price at which shares are being traded for on any given business day.  Disney’s share price on the New York Stock Exchange (XNYS:DIS) fell 2.79% over the seven business days from July 12, the day SAG-AFTRA joined the WGA strike action.  That is the equivalent of roughly US$4.48 billion dollars in lost value for Disney. For that same period, the share price of Netflix (XNGS:NFLX) rose 6.04%.

In a Reuters article on July 17th, analysts at SVB MoffettNathanson, Credit Suisse and Insider Intelligence were reported as saying that, “Nexflix’s international production capabilities are a huge differentiator, and a lot of their content comes from countries that are not involved in the strike.” 

Netflix has led its industry peers, including Disney, in production capability outside the US as well as introducing non-US content to mainstream American audiences.  With French shows such as Lupin and Call My Agent becoming recent fan favourites in the US, to Korean films such as Parasite winning multiple Oscars, Netflix has demonstrated a competitive edge derived from international markets that the other Hollywood Studios have not achieved.    

You may find this interesting as well.

Cinema Audience Coming Soon

The Global Appeal of Foreign Content

For well over a century, Hollywood has been exporting American-centric film and television content to the world.  Now the tide seems to be turning as the world exercises its own creativity in telling its own stories.  Those stories are now beginning to

All of the major Studios have spent the past decade building streaming platforms; effectively becoming Netflix to compete with Netflix.  Now they must follow suite again and go global or risk loosing the confidence of investors.  Those investors are increasingly concentrated, with a handful of the largest asset managers in the world holding enough shares to vote board members and CEOs out of office. 

For the CEOs of the major Studios, with compensation packages worth hundreds of millions of dollars and power to rival royalty, keeping the confidence of these institutional investors is all consuming.  

The End Game

The global Media & Entertainment industry is, in the end, a business in transition. 

As a global business, M&E has evolved from analogue to digital.  This present-state of digital creation, digital production and digital distribution has opened new markets and new opportunities that directly challenge a highly-structured system concentrating selection of global content within principally American corporations and production of such content within highly-concentrated pools of talent located primarily in Los Angeles County. 

For decades, investors have benefited from growth in value generated by the largest publicly-listed media conglomerates that effectively control international content distribution into the most lucrative markets.  That distribution has historically been in one direction, from Hollywood to the world.  But transition means change. 

The CEOs and their well-paid teams know that change is coming.  The larger a corporate conglomerate is, the harder it is to effectively manage that change.  As Bob Iger knows all too well.  So hard, in fact that Iger’s employment agreement was extended by two years on the very same day that SAG-AFTRA union members voted to go on strike. 

This article provides some background.

For this reason, professional investors hedge.  They hedge against the hegemony of the major Studios by also investing into smaller companies that can leverage the ubiquity of a global internet to distribute content which Hollywood, as it is currently operating, simply cannot produce.  In particular, Private Equity investors are increasingly supporting emerging streamers seeking to deliver content that reflects younger audiences and international markets which continue to grow and are increasingly affluent.  Content that tells new stories with new voices. 

This article explains much.

Big Investors Eye Media Shakeup in Three Crucial Areas

The Media C-Suite’s survey of Professional Investors point to changes on the horizon for Media & Entertainment.

The largest members of the AMPTP know that in order to meet the demands of increasingly international audiences, and to compete for the attention of investors, they must distribute increasingly international content at quality standards that Hollywood is known for.  They must also distribute more of it.  Everyone within the equation knows that this can be achieved equitably.  However, the largest members of the AMPTP seek to maintain the power of their distribution cabal over the creatives that actually supply them with product. 

The two outcomes may be mutually exclusive. 

For Professional Investors, with capital strategically invested into both status quo and disruption, either outcome may be acceptable.  Human nature dictates that power is a difficult thing to concede.  Attempts by the few to hold power and wealth, achieved at the expense of the many, do not often end well for the few.  At some point, the less concern the Studios have for the sustainability of creatives as partners in this industry, the more likely that disruption of the Studio’s hegemony will occur.

The delivery of that callous, dismissive AMPTP message attributed to a “media executive” was remarkably reminiscent of Jean-Jacques Rousseau’s phrase, “qu’ils mangent de la brioche”, now popularly attributed to Marie Antonnette in the leadup to the French Revolution.  With, “Let them eat cake”, Rousseau portrayed an aristocracy that either held a callous disregard for the insecurity of the peasants that supported them or a foolishly poor understanding of their precarious reality. 

Iger & Marie
Disney CEO, Bob Iger (left) & Marie Antoinette (right).

As Studios continue to leverage distribution to squeeze ever larger percentages of equity value out of entertainment content for themselves, leaving most creatives to struggle financially, maintaining the status quo that serves Studio bosses so well becomes increasingly unlikely. Creatives around the world, but particularly in Hollywood, are more than capable of turning the tables on Studio bosses. 

The aristocracy of France learned a harsh lesson in the realities of inequitable distribution of equity value. The corporate royalty of Comcast, Disney, Netflix and other multi-billion dollar publicly-listed media conglomerates might consider the parallels. 

If called to explain strategies that lead to revolution (read disruption in modern investor speak), then the investors that approve their royally-large pay packages might just reply, “Wrong answer!”.


  1. Last week we learned that the CEOs of the major Studios showed up in person to AMPTP’s negotiations with the WGA. What was meant to be private, AMPTP’s offer to the WGA members, was immediately released by the AMPTP. Trying to create a wedge in the WGA membership, who are clearly suffering financially.

    Last week’s tactics by the AMPTP indicate to me more of an amateurish approach to negotiations than that of highly experienced and very well advised CEOs of multi-billion dollar companies.

    Since they ARE CEOs of multi-billion dollar companies, and very well advised by some of the most expensive corporate communications and strategy consultants available, the only conclusion is that they, the major Studio bosses have an agenda to use the strikes for some strategic purpose beyond terms with WGA and SAG-AFTRA union workers.

    I find this sort of analysis only on the Media C-Suite. Wonder why.

  2. I love the comparison to Marie Antoinette and the term ‘ Let them eat cake’. Indeed squeezing too hard, might lead to a revolution! And that might not be great for the studios!

  3. most producers aren’t represented by the AMPTP,. Netflix and Amazon have tried to eliminate the profit shares traditionally earned not only by actors and writers, but by producers as well. With no back end, producing becomes a service business with income limited to fees, which of course makes production much less interesting for investors, who are looking for the annuity-like earnings that IP library ownership can bring. Netflix is also unique in not having a content library containing any rights created before it began its commissioning bonanza a few years ago (Amazon was similar but has bought MGM). Iger/ Disney is the most aggressive of the studios in the current standoff – there is word on the street that most other studios would quite like to settle but Iger is standing fast. If Disney were to join the others, that could leave Netflix on its own, which is also something that must be very appealing to them all. That said, you make an excellent comment about international content – particularly the younger generation don’t mind subtitles (they even switch these in for English-language shows and turn the sound off). But international writers and actors want a chance to earn profits from their work too, as do international producers, some of whom are actually owned by Hollywood studios (All3Media is owned by Warner Discovery…)

    • Gavin. I agree that the AMPTP does not represent most producers. In a global industry, producers in the UK are just as effected by the “American” dispute seeming exacerbated by the CEOs of the so-called Studios.

      There is corporate strategy being played out by these CEOs with the WGA and SAG-AFTRA members clearly being used as pawns. The Studios are facing serious disruption, since anyone can now build a streaming platform to compete directly with them. Their advantages are waning, and they know it.

      I just don’t see any indication that they know what to do about it other than exploit today’s power imbalance. Love that this article projects a consequence to that.

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