After once predicting that linear TV was “marching towards a great precipice and would be pushed off,” Bob Iger is one of the few media executives who is choosing not to separate Disney’s networks from the rest of the company.
Following his return as CEO in 2023, Iger suggested that Disney’s linear TV assets “may not be core” to the company — a comment that sent shockwaves through the industry. But he would later walk back the notion, telling employees at a town hall that the assets would not be sold.
In the years since Iger made that decision, Comcast has unveiled plans to spin off its cable network portfolio into a separate, publicly traded company called Versant by the end of 2025, while Warner Bros. Discovery announced this week it was splitting its Global Networks and Studios & Streaming businesses into two separate companies in mid-2026.
“As many others exit that business, I think it gives us a stronger hand to stay in that business,” Iger told CNBC on Tuesday. “We’re very focused. We will have, interestingly enough, a linear television business that’s paired with a streaming business. So, when you think about it, these spinoff companies won’t have the assets from a streaming perspective that we will have. I think that gives us an advantage.”
He then explained that when he returned to the company, he asked his team to evaluate whether to buy full control of Hulu and whether to sell the linear networks. After a lengthy review process, Disney decided to buy the Hulu stake and keep the networks to integrate them with the company’s streaming services.
“What that has enabled us to do is, one, aggregate revenue, both on the sub-fee side and on the advertising side,” Iger said. “Now, there is still enough linear television subscribers to generate a significant amount of revenue in both cases, in advertising and in subscription fees. We program them seamlessly. We manage them in one organization, and so there’s been great economies of scale in doing that. We also aggregate audiences for marketing purposes.”
“What we’ve determined is the combination of both is actually a winning combination for us,” he continued. “It’s one of the things that’s enabled us to turn the streaming business around from a huge loss to profitability, and over the next several years it will enable us to grow margins significantly on the streaming side because, again, the ability to amortize program costs and the ability to essentially aggregate audiences and revenue.”
He further emphasized that there’s “a lot more value” in a broadcast network if it’s paired with a streaming business.
“You think about our core networks, obviously, ESPN is a big one. That will be connected, obviously, fully with ESPN’s digital offering. Disney Channel is connected seamlessly with Disney Plus. FX and ABC have fed Hulu programming very effectively. And now when you think about all four, and we also have Nat Geo, which does the same with Disney Plus,” he said. “When you think about those five networks and how they’re programmed across linear and streaming, you’ve got a business that actually provides us an opportunity to not only grow, but to grow margins in the process as well. So, again, we like the direction we’re going. We like the fact that we’re one of the few that is doing this, because I think it sets us up to be even more competitive in a marketplace that’s becoming even more fragmented.”
In addition to discussing Disney’s linear networks, Iger addressed the agreement to pay an additional $438.7 million to buy Comcast’s minority stake in Hulu following a lengthy appraisal process. The company previously doled out an initial payment of $8.6 billion.
“We’re very pleased with this result,” Iger said. “But now we’re focused on doing what we intended to do once we gain full control of this. And that’s basically to put these apps together seamlessly, to create an experience for the consumer that’s easier to use, easier to buy, to increase engagement, to lower churn, to grow subs and, ultimately, to consolidate more and to save some money in terms of the operation.”
He also said that Disney has considered following Netflix in getting rid of quarterly streaming subscriber disclosures.
“We’re focused on EBITDA and cash flow and growing margins, and that’s, in fact, what we’re doing. I think at some point, what we’re mostly going to disclose is the bottom line,” he said. “Obviously, we’ll talk about trends when they’re relevant … we’ll give the street other salient points for them to digest, but as Netflix did by basically getting out of the sub-disclosure business, we’ve certainly considered it, but I don’t have anything specific to say about it at this point.”
