Speaking to investors during a conference call on Tuesday evening, Walt Disney (DIS) CEO Bob Iger said he is "open" to remaining at the head of the House of Mouse past 2018, if it is in the best interest of the company. Iger's contract is up in June of next year, but there is no clear successor to take over the CEO spot.
"While I am confident that my successor is going to be chosen on a timely basis and chosen well, if it is in the best interest of the company for me to extend my term, I am open to that," Iger said on the call.
Disney's previous succession plans disappeared in a puff of pixie dust when former COO Thomas Staggs left the company last year, after Disney's board scrutinized the pick, expressing a lack of confidence in him.
Disney hasn't "made much headway on this second round of succession planning here after Tom Staggs left," Bloomberg Intelligence's Paul Sweeney explained on Wednesday morning's Bloomberg Daybreak: Americas.
"I think the expectation was unless an internal candidate came out of nowhere, or maybe they went out and attracted an external candidate. The more likely scenario is Bob is going to stay as long as he needs to stay until they can find a credible replacement," Sweeney continued.
Most investors were happy to hear that Iger will remain with the company, Sweeney noted. Shares are up 1% to close to $110. Disney's 2017 first-quarter results were mixed, EPS came in above analysts' expectations, while revenue fell short of forecasts. Investors are still concerned about the ESPN subscriber decline problem.
"The question is, is there a silver lining out there? Sweeney asked. "Can ESPN get some of the subscribers back, whether in skinny bundles or maybe going with a direct to consumer app? That would be more of a streaming service and Bob Iger said that is something they will launch into the marketplace sometime later in 2017."
Disney's other businesses are performing "extraordinarily well," Sweeney noted. The company's parks and resorts business is booming, Disney just invested $5 billion in its recently opened Shanghai location. Most investors are expecting the resorts and theme park unit to continue to be a strong profit growth business.
Also giving Disney a boost is its film unit, which has seen almost no volatility and it has done nothing but go up in terms of profitability. Looking at the company's expected film releases over the next several years, Sweeney expects the profit growth to continue and perhaps offset some of the weakness in ESPN.