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In the fall of 1984, a middle-aged Hollywood exec named Michael Eisner got a royal welcome as he walked through the gates of Cinderella's Castle at Disney World. There was a live marching band and a crowd full of company employees cheering him on as he walked onto the stage locked arm in arm with the tuxedoed Mickey Mouse. Looking a bit shy, Eisner took center stage. Thank you very much. Let's, uh...
Tremendous pleasure to be here. There was a reason for all this pomp and pageantry. Eisner had just been named the CEO of the entire company, a company that desperately needed his help. In 1983, 84, Eisner was the CEO of the company.
Disney was in deep trouble. That's Larry Murphy. He was one of a handful of executives handpicked for Eisner's new administration to help fix Disney's ailing businesses. You know, at the time, the studios were moribund. Epcot had opened and overstretched the company from a financial standpoint. And the management was, to say they were tired is ridiculous.
being kind. So there were takeover specialists circling the company. Lots of them. There were sometimes known as corporate raiders, super big in the Greta's Good 80s. This was a new era of corporate giants, and the name of the game was eat or get eaten. Disney's financial troubles put a huge target on its back. Even old school companies like Marriott and Coca-Cola were reportedly drawing up plans to take over Disney, which probably looked pretty good to the company's increasingly restless shareholders.
This kind of situation is a perfect feeding ground for corporate raiders. Scoop up a struggling company and figure out how to squeeze out profits for themselves, maybe by gutting it and selling it for parts. But Disney managed to dodge all that by making some key hires, people who might just be able to bring Disney into this new era, including Michael Eisner, a guy who'd been working in Hollywood for years. Michael Eisner and Frank Wells as the CEO and president of the company.
Their mandate was to fix the place. And so when Michael Eisner stood in front of Cinderella's Castle that day, he stood there not just as another CEO of an entertainment company. He was a potential savior, restoring hope to a battle-fatigued dynasty. A dynasty with deep roots in creativity, entertainment, and the American imagination.
Eisner seemed to clock how important this legacy was right away. "I can assure you that I did not come to this organization to watch it be dismantled." In fact, he pitched the opposite. "I came here to try and continue what Walt Disney and his associates set in motion 50 years ago. And that is very simply this: It is essential to maintain the old, to respect the old, to replenish the old, to enhance the old,
Moving forward would eventually mean one thing. Getting bigger. Much bigger. In order to survive in a land of giants. This is Land of the Giants, the Disney Dilemma, and I'm Joe Adalian. I've covered the television industry since the early 90s, and now I report on the streaming business for New York Magazine and Vulture.
Over all that time, I've watched as Disney's corporate shadow has grown, acquisition after acquisition. Disney is now enormous, a box office behemoth with a market cap making it one of the largest companies in the world, and also, arguably, the most beloved brand. It went from the dark days of the pre-Eisner 80s to now a nearly $200 billion company.
This season, we'll be taking a deep look at whether this explosive growth has ultimately helped Disney and created new generations of Disney fans, or hurt the company Walt and his big brother Roy created a century ago. Today, what made all that growth possible in the first place? Think of it as the acquisition that started all the other acquisitions.
And no, it's not Marvel, it's not Lucasfilm, or even Pixar. No, no. What made all those purchases possible was a deal that almost never happened, of a company you've likely never heard of. But it's the deal that restructured Disney's fundamental DNA and changed the course of the company's future forever. When I first joined Disney, I took over as CFO. And it was a broken company, and I'd never really seen a broken company before.
This is Gary Wilson, Eisner's chief financial officer. And when he says broken, he means there was no leadership figuring out how to make profits go up. In some ways, it was just simple math. The company was spending too much and not making enough. But the bigger, scarier problem was that it was also kind of lost.
Disney's problems were most clearly shown in its struggles at the box office. The company's movie output had been on a steady decline since the 1970s, and by 1984, it released fewer movies than any other major Hollywood studio. And the movies it did put out? Well, not great.
Since the passing of Walt Disney and his brother Roy, the company hadn't quite found its creative stride. It started experimenting with new kinds of movies, edgier sci-fi flicks like Tron or The Black Cauldron. But the lifeblood of the company, beautifully animated kids' movies like Cinderella and Fantasia, were for the most part M.I.A.
Before joining Disney in 1985, Gary Wilson was a takeover specialist himself, a corporate raider. He helped buy out and restructure companies all over the world. But when it came to Disney, he agreed with the vision Eisner laid out at the Magic Kingdom.
Even in disarray, the company already had everything it needed to right itself. The whole idea is that we weren't going to do anything new. We were just going to make better what Walt Disney did. Yeah, Walt Disney was the strategic genius here. The strategy that Walt Disney had set up years ago was the right strategy. It just needed to be implemented. In other words, they had to quit experimenting and get back to the basics of what made Disney, Disney.
Larry Murphy again. We were very much a stick-to-the-knitting company. So we had the studios, which were most importantly generating Disney-branded animation and live-action films. And there was the theme parks, which were a big part of the company. And then, of course, you had consumer products. You know, the licensing of the Disney brand for all the consumer products all over the place.
Three arms of the business. And in healthy times, each arm would work to build up the other arms. Great movies mean lots of successful merch and maybe a popular new ride at a theme park. It was a strategically beautiful business that Walt had created. There was another way these arms were connected, maybe the most important part of the business. The brand was like gold.
It was an incredibly powerful brand with an extraordinary essence. As chief strategic officer of Disney, Larry Murphy was responsible for managing that brand, which was serious business. People around the world had deep emotional connections to Disney the brand. And what other companies can you say that about? I said, I have to be objective about this. I have to be really thoughtful about this because it's the most important thing I'm probably going to do.
And I said, we need to do some research on the brand. This is a funny idea. So instead of aliens from outer space, it's men in suits crawling all over the house of mouse they've just inherited to try to understand what is this company that makes cartoon movies and amusement parks? And why do people lose their minds over it? Murphy came up with a survey full of questions for Disney fans. I've never seen anything like it. First of all, people...
were, I mean, enthusiastic is an understatement. People loved Disney. They loved the Disney brand. They loved the park experience. They loved the animated films. Their kids watched the same film a hundred times. It was the most effusive, profound respect and love and appreciation for a brand that you could imagine. He asked every participant of his survey this question. What does the Disney brand mean to you?
Almost every one of them said in so many words, usually using these words, magical entertainment. Disney is magic. Magic. Like when its movies create a universe of boundless imagination. Think Snow White and her woodland creatures. Now you wash the dishes, you tidy up the room, you clean the fireplace, and I will use the broom.
Or when a child steps foot into Disneyland for the first time and is enveloped in a new world. No other company had ever figured out how to package and sell magic quite like Disney. And the survey reminded the suits that people still wanted that from the company. They didn't want dark sci-fi movies. Leave that to George Lucas. They wanted magic, and they were going to get it. We rejiggered every area of the company and expanded it greatly.
Disney expanded its parks, its hotels, and seized on those kids wanting to watch their movies on repeat by increasing its home video business. They were growing, but always, always with a careful eye for keeping things magical.
Take the question on how to expand the hotel business. Are we going to have Marriott hotels on our property, or are we going to brand them Disney? Outsourcing the job to Marriott would be faster, easier, definitely a whole lot cheaper. All we have to do is build boxes like Marriott does, and we'll make a fortune because we could charge enormous rates. But would it be magical? It came down to a hard-fought debate about
And Michael said, we're going to do Disney branded hotels and they're going to be themed. And we're going to hire great architects and they're going to come in and each of the hotels is going to have a theme. And so now you've got
every imaginable branded hotel. And that became the philosophy of building out the property. What Eisner realized was that families don't go to a Disney hotel to have a Marriott experience. They go to a Disney hotel to be lifted up from the mundane stuff you can get anywhere else in the world. So what really drove the strategy going forward was, is this magical or not?
It was a winning strategy. In 1989, a Newsweek cover story declared Eisner, "'More Walt than Walt.'"
Creating magic would continue to serve them well in the 90s as the studio started churning out hit after hit. Think The Little Mermaid, Beauty and the Beast, The Lion King. Back to basics, beautiful animation that did not miss. We ignited the whole company. I mean, the whole company went on fire. Speaking to 60 Minutes Australia in 1995, Eisner gave himself a pat on the back. Stock has gone up, I don't know.
1,700% or something since 1983, which our shareholders, I think, don't resent. But we've had phenomenal success. In the 10 years since his coronation on Cinderella's stage, Eisner had kept to his promise. Disney's market cap had grown from $2.5 billion in 1985 to $23 billion in 1995. He'd saved the company, restored the magic, and he'd done it all by, quote, sticking to the knitting, as Larry Murphy likes to say.
Expanding, certainly, but never departing from the company Walt Disney had set up decades earlier. And if it had been up to Murphy, that's what they would have kept doing. But Eisner had different plans. Michael changed the brand from Walt Disney Productions to the Walt Disney Company, which I think was kind of anticipating that someday maybe we would have a broader umbrella of assets.
Here's the thing about Michael Eisner. As successful as he'd been at Disney, more Walt than Walt at the Walt Disney Company, he never really stopped missing his roots. Michael was a page at NBC, and it was in his blood. He loved being a page at NBC. He loved the network business. He then was at Paramount, where he created television programming.
And so he felt like he could do that successfully. Eisner's love for network TV was kind of legendary, as are some of the stories about his time there. Like the one where he was snowed in at Newark Airport in 1971 and came up with the idea for a sitcom set in the 1950s. How come you don't get to pay anything? How come? Because I'm the Fonz. Yep, happy days started with Eisner.
He was a TV guy, and after he got to Disney, he was still a TV guy. One of the first things Eisner did when he got to Disney was to sell ABC a new weekly anthology of Disney movies to be hosted by Michael Eisner. Ted Harbert was the ABC exec who oversaw the Disney Sunday movie, and even then, he could see how obsessed Eisner was with network TV.
Plain and simple, this guy wanted to run a network. He wanted to run a network since he was a VP in 1976. Gary Wilson, Eisner's CFO, saw it too. Oh yes, he brought it up constantly. Michael was a very open guy and very emotional about certain things, and he made very clear what he would like. And we made it very clear what we thought about it.
To Wilson and Murphy, Eisner's confidants and business realists, network television was not Disney. Network TV was Seinfeld or Good Morning America. It was popular, no doubt. But was it Disney? Was it magic? It was a major deviation. We didn't believe in network TV, and this was going to be a very big expenditure on what we viewed was an asset that doesn't have much of a strategic future because it's going to die eventually.
They'd spent the previous 10 years building wild shareholder value by staying in Disney's lane, movies, theme parks, merch. To swerve into the world of network TV ownership felt unnecessary and off-brand. But by the early 90s, the world was changing yet again.
Here's Wall Street Journal media reporter Robbie Whelan. So what's happening is Michael Eisner is looking around the landscape and he's seeing this landscape that is just full of consolidation. Consolidation made possible by deregulation. New legislation was chipping away at rules that once discouraged gigantic media conglomerates.
We went from having 50 or 60 companies owning all of the TV networks to having just six or seven. You know, it's basically tighter control by a number of large corporations. One obscure rule was particularly relevant to Disney.
Called the FinCEN rule, this law had always prohibited studios from getting into the TV business. The idea was that one company should not own the content and the means of distributing the content. That would veer too much into monopoly territory. In 1993, FinCEN was abolished. So this idea forms in the industry that owning a network to distribute your content and to put your TV shows on is starting to feel really important.
And companies were already starting to move on this. Viacom, a major TV company, had just bought Paramount, Eisner's former home. So if you're Michael Eisner, you're thinking, my God, look at all the financial power that's being consolidated among our competitors. What had been Eisner's fantasy was beginning to look more like an existential imperative. By 1995, Gary Wilson had left Disney to run Northwest Airlines, and Larry Murphy was left on his own. I was, in many ways, the holdout
on the whole thing because I thought the issue was manageability. Murphy feared that Disney didn't have enough leadership to manage adding on an entirely new network business while also keeping the rest of Disney's magical kingdom ticking. But for Eisner and most everyone else in the Disney C-suite, the writing was on the wall. Disney had dug itself out of a hole by going back to the basics and making magic again.
But now it needed to move forward. Eisner yearned for it, and the business landscape demanded it. So the new strategy was, take the plunge into TV. Now the only real question left was... How big should we get? Who should we buy? Should we buy CBS or should we buy Capital Cities, which is the owner of ABC?
Or should we shoot even higher and maybe go for Time Warner? And it kind of got winnowed down at some point to they should either go for CBS or they should go for ABC via Capital Cities. We were meeting quite incessantly because we had a sense it was the time to zero in and make it happen.
And they had a deadline. All the key players would be gathered at the bougie Allen & Company conference in Sun Valley, Idaho that summer, an annual meeting of the biggest corporate executives in the world. And we sort of agreed at what we could offer. And Michael said, OK, I have my assignment. I'm going to convince them to let us make a bid. But who was they?
Would Eisner strike a deal with CBS, home to 60 Minutes and Murder, She Wrote? Or would he aim bigger and try to buy Capital Cities? The latter owned ABC and a bouquet of other media properties, including an up-and-coming cable channel focused on sports. They couldn't have known at that point how big ESPN would become. But, I mean, a decade and a half later, ESPN really was the central financial engine of the Walt Disney Company.
When we come back, how Disney's TV era turbocharged the growth of the entire company, and how ESPN became the rocket fuel that made it all possible.
On September 28th, the Global Citizen Festival will gather thousands of people who took action to end extreme poverty. Watch Post Malone, Doja Cat, Lisa, Jelly Roll, and Raul Alejandro as they take the stage with world leaders and activists to defeat poverty, defend the planet, and demand equity. Download the Global Citizen app to watch live. Learn more at globalcitizen.org.
From ABC, this is World News Tonight with Peter Jennings. Good evening, everyone. We begin tonight with news about us. Just two weeks after Eisner arrived in Sun Valley, Disney surprised the world. We learned early this morning that Walt Disney is buying Capital City's ABC. This was literally a big deal. The combined companies will form the world's largest entertainment and information company.
Ann Sweeney arrived the day the federal regulators approved the merger. And I walked into an amazing company. She was hired to lead Disney's new push into TV land, heading up a bunch of new cable channels across the suddenly supersized portfolio. This was a seminal moment in the history of media because this is a studio buying a platform.
They had broadcast, they had cable, and they had radio. And we've seen what's happened since. You know, the consolidation started, but I think there was a realization of controlling your destiny. Controlling your destiny meant owning both the production of a show and the platform where people see it. And at the time, no platform was greater than broadcast television.
Do you remember yourself what you thought of this deal going in? What really stood out to me was the acquisition of ABC.
because ABC was a broadcast powerhouse that I had grown up with. So ABC really dominated the conversation. Even at that time in the mid-90s, there was already discussion about, it's the end of broadcast TV. I think since the 70s, people have been saying, it's the end of broadcast TV for years. But it was still obviously seen as a way to make a lot of money. You know, people at Disney clearly thought so. Joe, I think it boils down to reach. You can reach everyone with broadcast television.
Disney bought capital cities for $19 billion. That was a lot of money back then. It was the second biggest takeover in U.S. history. And most of that value was placed on ABC. That network beamed into homes through the free public airwaves and attracted tens of millions of eyeballs every night. Cable, on the other hand, you had to pay for. So fewer people watched it. And even fewer watch premium cable channels like HBO or the Disney Channel.
The Disney Channel had been around since the early 80s, but it was kind of a backwater at the company, not central to the business yet. I wanted to grow and I wanted to grow fast because I had a small audience at home that was not watching Disney Channel.
Instead, Anne Sweeney's two little tykes were watching Nickelodeon, the cable channel she'd got her start at before coming to Disney. 90s kids imprinted on Ren and Stimpy or characters like Angelica Pickles from Rugrats. You dumb babies! So not Disney. But these kids were Nickelodeon kids. The reason? Any parent who sprang for cable, even the most basic package, got Nickelodeon piped into their home as part of the deal.
But Sweeney wanted the next generation to be Disney kids. Not possible if the Disney Channel remained walled off in premium cable land. So to get there was really to take the basic cable route and take it quickly. But negotiating cable deals is not quick. Unless you have something those cable providers really want in their basic package. Then you have leverage. And the newly supersized Disney had that. My name is Steve Bornstein.
I worked at ESPN from its early inception. ESPN was founded in Bristol, Connecticut in 1979 as the first ever 24/7 sports channel. Bornstein joined the company a few months later when it was airing whatever it could get its hands on. Things like slow-pitch softball and previews of the Grambling Tigers football games.
not exactly a magnet for advertisers. We had sustained pretty substantial losses between 1980 and 1987. There were times when we thought that the whole business would be shut down. But in 1985, a company called Capital Cities, sound familiar? Bought ESPN's parent company for a few billion dollars. ESPN used the new infusion of cash to strike a deal with a sports league that does attract a lot of attention, advertising and otherwise. The NFL.
In 1987, ESPN became the first cable channel to air an NFL game. Touchdown!
And things just got better from there. In 1995, ESPN was doing quite well. By this time, Bornstein was ESPN's CEO. And ESPN had expanded its NFL portfolio to include half of all Sunday night football games. It had successfully launched ESPN 2. So we now had two fully distributed linear networks. We were very aggressive internationally. So yeah, ESPN was looking a whole lot better than it ever had before.
But even then, when Disney was looking at buying capital cities, ESPN's success wasn't the top selling point. Larry Murphy. When we looked at ESPN, we valued it very conservatively. But maybe it should have been. I don't believe they understood the potential until they got in under the hood and they recognized what kind of pricing power we had in the marketplace.
Here's what he means. If a cable company, like Comcast, wants to include a channel in its lineup, it has to pay for that channel. Each cable channel, like ESPN, negotiates with the cable company on the price. These deals can get pretty complicated. But they can also end up extremely lucrative, which is what happened with ESPN about a year before Disney bought it. We offered them a deal, you know, to quote the godfather, they couldn't refuse.
ESPN offered a bunch of stuff that looked really good to the cable companies, like giving them more content for the same price. But there was this other clause buried deep in the contract that not a lot of people really paid attention to.
It was like this little sleeper agent just waiting to get called up for duty. In the circumstance of getting a full season of Sunday night football games from the National Football League, we had built in the ability in our contracts to raise our rates up to 20% a year. Raising rates 20% a year would mean ESPN's profits would grow exponentially. That's the power of compound interest, right? It would be a bigger windfall every year, guaranteed.
But it was also unlikely this clause would ever be triggered. Airing NFL games was highly profitable. Why would TNT, which owned the other half of the NFL's Sunday night football rights, ever give them up? So the sleeper agent was likely to stay sleeping and the cable operators signed the deal. Here's Mark Shapiro. I don't think people knew what they were doing, to be honest with you.
Today, Shapiro is the president and COO of Endeavor and TKO. But in the early 90s, he was a production assistant at ESPN. It wasn't like they were so powerful and the brand was so powerful and the programming was so powerful and SportsCenter was so powerful and Dan Patrick and Keith Olbermann were so powerful that they had to have ESPN so they'll pay anything to renew. No. It was early days of cable. Deals were being negotiated.
somebody brilliantly like thought up, hey, let's put in annual increases of 20% and this will just feed itself. And okay, it sounds good. So unlikely? Yes. Impossible? No. Because sometimes in business, things come down to a series of fortunate events. They had an epiphany of cost control and we had the ability to actually try to do this. The they Steve Bornstein is referring to is, of course, TNT.
Time Warner had just acquired TNT's parent company in a spendy merger, so the newly formed giant was low on cash. Meanwhile, Disney was in the middle of its box office golden age, swimming in profits and now bigger than ever. Eisner was ready to open his checkbook. Michael was the champion and he put his thumb on that scale and we got the support and we made the bid. Disney ended up offering the NFL the largest contract in the league's history.
With it, ESPN secured the full regular season of Sunday Night Football and awoke the sleeper agent planted in the contract years before. The true scale of cash this could bring in even took Michael Eisner a few years to grasp. Mark Shapiro remembers one notable meeting. By this time, he'd become head of programming at ESPN. Michael was actually in Bristol.
And it was time to show him the business plan. And I remember the affiliate fees and the idea of this concept that we had contractual 20% year-over-year increases came up. And I distinctly remember Michael at the head of the table, well, what are you talking about?
Well, no, we have annual increase. I understand, yeah, you take care of ESPN and they do multi-years and every time there's a renewal, I got it, there's increases. What do you mean? No, we have 20% increases, year-over-year increases. For how long? Presumably forever. It's in the deals. It feeds itself. We're adding more properties. Soon, we'll have enough properties that they can't live without ESPN. In renewals, it'll just continue.
I swear to you, it was a 15-minute conversation. Like, what do you mean? I don't understand. What do you mean 20%? What do you mean year over year? What do you mean automatic renewals? What do you mean? What do you mean? What do you mean? One million, two million, three million, four million.
This is the point where Scrooge McDuck's, I mean Michael Eisner's, eyes turn into dollar signs. It was just beginning to hit home. It was so unfathomable that ESPN was getting such a high sub fee month after month, year after year, so distanced from the competition that it was almost something you couldn't believe. Too good to be true. And the growth fed itself.
ESPN eventually picked up TV rights to every major American sport. More games meant more eyeballs, meant more money, meant more subscribers. We grew from 50 million to 100 plus million over the next decade. And each new subscriber paying a little bit more every year. By 2012, the average cable channel was getting 20 cents per subscriber every month, while ESPN was pulling in a whopping $5 a pop.
And all of that new money and power got plowed back into Disney.
Mark Shapiro. All of a sudden, they started to use the ESPN strength and leverage to grow out all the other assets and get those renewals where they wanted to be. Remember Ann Sweeney's plan to get the Disney Channel into everyone's home every day? The conversion of the Disney Channel from a premium distributed television network to a basic cable network was done on the back of the ESPN renegotiation with the cable operators.
With basic cable unlocked, the Disney Channel's growth skyrocketed. Increasingly, we had operators who came to us and said, hey, our basic subscribers are growing because we now have Disney Channel. And we added one million basic cable subs every month for five years. If 90s kids were raised on Nickelodeon, kids of the aughts were the Disney Channel generation. With Lizzie McGuire, Hannah Montana, and High School Musical,
So you can thank ESPN for Zac Efron. But even if you weren't a Disney Channel kid, you were probably, even if accidentally, becoming a Disney adult. Because the Disney TV empire had spread everywhere. Besides ABC, ESPN, and the Disney Channel, Disney owned large stakes in Lifetime, A&E, and the History Channel. Then those channels spawned new channels, SoapNet, Disney Junior, ESPN News, and ESPN Classic, and a dozen other networks.
Ever binged Grey's Anatomy or Lost? Or watched Desperate Housewives with your friends? That's all Disney, folks. Was it magical? Who cared? In 2011, 75% of Disney's operating income came from cable and ABC.
And all this money from TV got plowed back into Disney, becoming the engine that powered the rest of the company. It was a great time, and I think it provided a lot of rocket fuel for some of the acquisitions that happened. There was Pixar, Marvel, Lucasfilm. The cable division was a great contributor to the company coffers. And no single channel was more valuable than ESPN.
For a while, just like Mark Shapiro said, it seemed like cable, Disney's growth engine, could last forever. But that's not how engines work. I'd like to address an issue that has been receiving a fair amount of interest and attention these days, and that's the rapidly changing media landscape, especially as it relates to ESPN. In 2015, Bob Iger, Eisner's successor and current CEO of Disney, got on a quarterly earnings call with investors to deliver some bad news.
ESPN has experienced some modest sub losses. Cord cutters were starting to make a dent. Many were sick of paying $100 a month for bundles full of channels they never watched, including the most expensive channel of all, ESPN. Because all this time, most of those automatic price increases just got passed along to the subscribers.
Iger was quick to qualify the minor losses with an optimistic outlook. Overall, though, we believe the expanded basic package will remain the dominant package of choice for some years to come. But over the next few years, subscriptions kept dropping. We're starting to see this engine that Disney had relied on for at least 15 years or so really kind of sputter out.
In 2023, ESPN lost nearly 1 million subscribers in a single quarter. And Bob Iger sat down with CNBC and where else? Sun Valley. The tiny Idaho resort town that not only got Disney into the TV business, but brought Bob Iger himself into Disney. He was the top executive at ABC Cap Cities when Disney bought it.
I would say that in some cases, the challenges are greater than I had anticipated. By this time, Iger wasn't as optimistic about cable's future. Let me ask you about it. We're talking, I guess, ABC, the network, the stations, but then the cable networks as well. Is it possible you would look to sell them? We're going to be expansive. I think if you can, you can interpret what that word means. You know, we're just getting at that work, but we have to be open-minded and objective about the future of those businesses. Yes.
Meaning that they're not core to Disney? That they may not be core to Disney, yeah. When he said that, I was watching it live, and I think I remember my jaw kind of dropping because saying that TV was not core to Disney's business was...
In a way, it was saying the quiet part out loud. Robbie Whelan again. It was a recognition that this era of distributing TV via broadcast networks and cable bundles is kind of over. And it's the model that Bob Iger grew up in at ABC in the 80s. It's the model that Michael Eisner first made his splash in.
Working at ABC, it was his first job. Both of these guys started their careers. The two CEOs or the two long-term CEOs that Disney has had over the last 40 years, both started their careers in the traditional TV world. And think about that for, for, for one of them to go on TV and say, that world is dead is, is really seismic. I think for the, for the company and for the industry.
Iger has since said that the TV networks are not for sale. But regardless, another era is coming to an end at Disney. This time, it's the era of Cap City's ABC and basic cable. Of Disney being, maybe surprisingly if you weren't looking close enough, a TV company more than anything else. TV built Disney into one of the largest media conglomerates in the world. But now it's got new giants to contend with. Apple, Amazon, and Netflix.
and they're all vying to dominate a new era of mass entertainment. It's almost like...
Disney's entire TV business is in this sinking ship and everyone knows the ship is sinking and they know what the land they're trying to get to so they don't drown looks like. And that land is the land of streaming. Disney did make meaningful moves to get into streaming before a lot of its competitors. But there aren't enough lifeboats in a sense, and there's not enough time to teach everybody how to swim to get to the shore in time.
We'll spend the rest of the season exploring how Disney can overcome the tide of the streaming wars. Will it buy? Will it sell? And will it find its magic again? Maybe in the parks, which have replaced cable as Disney's most profitable division.
So next week, we're going to Disney World to see how the company has used its parks to shape its brand and our entire cultural imagination. The Disney visit is the American rite of passage, right? We don't have a communal religion. We don't have these communal sort of ceremonies by which we mark time. We do have this Disney visit that we sort of assume if your family could afford it, you did.
Land of the Giants, The Disney Dilemma is produced by Vulture and the Vox Media Podcast Network. This episode included clips from the Disney Theme Park video channel, ABC News, Walt Disney Productions, Nickelodeon, and CNBC. Charlotte Silver is our lead producer. Jolie Myers is our editor. Claire Cronin is our fact checker. Our theme music was composed by Brandon McFarlane, who also mixed and scored this episode. Neil Janowitz is the editor-in-chief of Vulture.
Art Chung is our showrunner. Nishat Kerwa is our executive producer. And I'm Joe Adalian. If you liked this episode, tell a friend. And follow us to hear our next episode when it drops next Wednesday.