Josh D’Amaro officially takes over as Disney’s chief executive officer during Wednesday’s annual shareholder meeting, inheriting leadership of the entertainment giant during a period of significant industry transformation.
D’Amaro’s successful management of Disney’s profitable theme parks division, which generated 57% of the company’s $17.5 billion in profits last year, propelled him to the top executive position.
Shareholders are looking forward to hearing D’Amaro outline his approach for navigating Disney through the age of artificial intelligence, where technology companies pose threats to traditional media economics, and addressing potential tourism disruptions from Middle East conflicts and rising oil costs.
The new CEO also faces a struggling television division, audience fatigue with major franchises including Marvel and Star Wars, and a fragmented entertainment environment where Disney competes with platforms like YouTube and TikTok for viewer attention. He must also overcome comparisons to Bob Chapek, another former parks division leader whose unsuccessful CEO stint led to Bob Iger’s return in November 2022.
While both D’Amaro and Chapek emerged from the parks business, Disney’s board has partnered D’Amaro with seasoned television executive Dana Walden, who received a promotion to president and chief content officer. TD Cowen analyst Doug Creutz noted that Walden’s established creative experience will complement D’Amaro’s operational capabilities.
“It will however be critical for the two executives to be able to forge a strong partnership,” Creutz stated in his analyst report.
Iger plans to stay on Disney’s board through year-end before his second scheduled retirement.
Following Iger’s company return, Disney stock had plummeted over 40% in one year due to investor worries about streaming division losses. Activist investor Third Point had pushed for spinning off ESPN before recognizing its company value, while Trian Fund Management, led by Nelson Peltz, accumulated shares.
Iger brought stability to Disney by restructuring the organization to empower creative leadership and achieving streaming profitability. He successfully fought off campaigns from Peltz and other activists who claimed the entertainment company had fallen behind in streaming competition.
Under Iger’s guidance, Disney produced five movies earning over $1 billion globally in the last two years, announced a $60 billion investment plan for theme parks and cruise ships, launched ESPN’s streaming platform, and established an OpenAI partnership.
Despite these achievements, Disney’s total return on invested capital reached 11% during his leadership, trailing the S&P 500 Index’s 77% return. The company’s enterprise value currently trades at 10 times the upcoming 12 months of EBITDA, below its two-year median of 12 times EBITDA, according to LSEG data.
Bank of America analyst Jessica Reif Ehrlich expressed anticipation for hearing D’Amaro’s company vision.
When Iger became CEO in 2005, he acted swiftly to establish his leadership style, repairing relationships with activist investor Roy Disney and reconciling with former Pixar CEO Steve Jobs, which enabled Disney’s acquisition of the groundbreaking animation studio, Ehrlich explained.
“Josh is coming from parks. Will he do things quickly? Does he have a plan?” Ehrlich questioned. “If he could at least articulate a growth strategy, that would be super helpful.”
