In assuming the role of Walt Disney CEO, Josh D’Amaro doesn’t just get the keys to a $185 billion media giant; he also inherits the responsibility of navigating the company through a whole new world — one that isn’t always happy.
The entertainment industry is in flux, and Disney will need someone with a deft hand if it is to survive and thrive. The business is consolidating around just a few superpowers, many of whom have the luxury of giant tech businesses to fall back on (see: Google and Amazon). The rise of AI is disrupting everything, and Disney has had a mixed track record in this area. Then there are the potentially thorny political situations, with another Jimmy Kimmel-like controversy threatening in the distance.
There’s also the evolution of Disney itself, which has successful theme parks and film businesses but also shrinking linear TV assets while dealing with rising programming costs, constant disputes with providers like YouTube TV and the need to reinvigorate marquee franchises like Marvel.
One thing’s for sure: D’Amaro won’t be able to sit around for long. But his ability to make decisions is a key reason why he won the gig.
“Now he’s got to learn how to be a CEO,” Disney Chairman James Gorman told TheWrap on Tuesday. “He’s a polymath in abilities would be the way I describe it, and I think the board was super impressed by that.”
Starting from the macro problems and narrowing to company-specific issues, here are the biggest challenges facing D’Amaro as he takes the reins on March 18.
Industry consolidation
The media world is a very different place than when D’Amaro joined Disney in 1998. There are fewer players, and the numbers continue to shrink. Netflix’s pursuit of Warner Bros. Discovery’s streaming and studio (and Paramount’s attempt to buy the whole company outright) is the latest evidence of that consolidation.
These are competitors with massive war chests that aren’t tied to the brutally competitive entertainment business. YouTube TV owner Google generates most of its revenue from its search ad business, Amazon, which owns MGM, is first and foremost an online retailer and, crucially, a supplier of web services. Apple sells iPhones and hardware, with entertainment essentially a rounding error in its massive business.
Disney has spent years building its Disney+ streaming service and bulking up its IP through the acquisition of Lucasfilm, Fox and more. In 2026, Disney will spend $26 billion on content companywide. But is it enough?
TheWrap Take: While Iger has said that the company doesn’t need to buy more IP, D’Amaro may face pressure to continue to grow as the prestige media company finds itself potentially outgunned in a business where its rivals are only getting stronger.
The rise of AI
Generative artificial intelligence disrupted everything when it first exploded in late 2022, forcing industries and people to rethink the way they work and live. In Hollywood, generative AI offered the promise of quick prompts that would replace costly special effects, creating whole scenes out of thin air.
At least in 2025, that didn’t materialize, with Disney’s own AI ambitions hitting a wall. D’Amaro’s challenge will be similar to what Iger faced: balancing embracing the technology without pissing off the talent it needs for its blockbuster shows and films.
The company’s partnership with OpenAI to license some of its animated franchise characters for use in OpenAI’s Sora platform is an example of that tight walk, and one that has already drawn criticism (see: the prospect of an AI-generated Elsa invading the Disney+ streaming app).
TheWrap Take: D’Amaro will have to push Disney to utilize AI in more meaningful ways without ruffling the feathers of a Hollywood community that continues to look at the technology with wary eyes.
Political instability
Disney has always been a progressive company, and that has gotten it in hot water in these politically explosive times. In December 2024, the company settled a defamation lawsuit brought on by Donald Trump, who had just won the election a month earlier. The move was widely seen as the company capitulating to Trump over a complaint with a murky legal basis and drew its share of backlash.
Disney stepped on another landmine in September after suspending Jimmy Kimmel after FCC Chairman Brendan Carr took offense to comments made regarding the killing of Charlie Kirk, which many saw as an assault on free speech, and which saw Iger himself criticized by former Disney CEO Michael Eisner. New guidance from the FCC aimed at stripping late night and daytime talk shows of “bona fide news” exemptions could add new pressure to Kimmel, as well as “The View,” which has also been in Carr’s crosshairs.
It wasn’t just Iger. His successor-turned-predecessor Bob Chapek also drew criticism from his initial decision to stay mum about Florida’s “Don’t Say Gay” bill, drawing the ire of numerous employees, then he got criticized by the state’s Gov. Ron Desantis when he did speak up.
TheWrap Take: Given the unpredictable nature of the political environment — and the tendency for the company’s talent to speak out — it’s just a matter of time before D’Amaro will have to face his own crisis.
Managing a shrinking linear TV business
Disney still generates a ton of revenue from its portfolio of cable channels, including ABC, ESPN, National Geographic, Freeform and FX. But the linear TV business is in steady decline, and one of D’Amaro’s chief challenges will be managing the transition to streaming as that deterioration accelerates.
Exacerbating cable’s decline are the uptick in carriage disputes in recent years, with Disney in November resolving a two-week standoff with Google’s YouTube TV that resulted in a $110 million hit to its sports profits. These conflicts, which have only gotten worse over time as more programming moves to streaming, not only take a chunk out of its bottom line, but result in temporary blackouts that frustrate consumers, increasing the risk of cancellations.
Disney did not break out the performance of its linear TV business in its latest quarter, instead lumping it in with its studio results on the entertainment side. Together, those profits plunged 55% to $650 million for the quarter. In comparison, Disney+ and Hulu’s combined profit grew 72% to $450 million, with a boost from October price hikes at the streaming services. On the sports side, the segment’s overall profit tumbled 23% to $191 million. Disney executives said they are “pleased with the adoption and engagement” with the new ESPN app, but declined to provide specifics or break out financials.
In comparison, Disney’s Experiences business, which includes its theme parks, hotels, Disney Cruise Line and consumer products, saw revenue and operating profit each climbing 6% to $10.01 billion and $3.31 billion, respectively.
“We have a healthy competition now at our company in terms of which of those two businesses is going to essentially prevail as the No. 1 driver of profitability for the company,” Iger said on the earnings call. “But I’m confident that both have that ability, meaning both have the ability to grow nicely into the future, giving all the investments that we’ve made and the trajectory that we’re on.”
TheWrap Take: D’Amaro faces the same daunting task as other media companies in ensuring that the move to streaming and away from linear can happen without a big disruption and decline in revenue and profit.
A big bet on ESPN
The stakes that come from the transition away from linear to streaming is best illustrated by its big bet on its ESPN direct-to-consumer streaming service, which it launched in August. While the company is keen to get consumers subscribing directly, it also needs to play nice with TV providers like Charter and Verizon, and has allowed those subscribers to get “free” access to the service.
At the same time, the programming cost for sports is only expected to get higher. Streaming services are projected to spend $14.2 billion on sports rights this year alone, according to Ampere Analysis. In its fiscal second quarter, Disney is anticipating an approximately $100 million hit to sports operating profit due to higher rights expenses.
Under Iger, ESPN acquired NFL Networks in exchange for the National Football League taking a 10% stake in the sports network, a testament to how influential the biggest sports leagues are to the entertainment business. That stake is valued at $3 billion, while ESPN as a whole is valued at about $30 billion. Iger declined to comment on how the partnership might impact an early renewal of ESPN/ABC’s media rights deal with the league.
The question is how Disney will continue to compete when deep-pocketed players like Amazon and Netflix continue to expand their live sports presence in streaming.
TheWrap Take: Sports remains one of the few sources of cultural events that can guarantee large, engaged audiences, and command a massive premium. D’Amaro’s challenge will be dealing with the spiraling programming costs while ensuring Disney keeps its position atop the sports entertainment world.
Tired franchises
Disney’s treasure trove of franchises is the envy of the industry. But in recent years, some of its biggest IP, namely Star Wars, Marvel and Pixar, have been in a rut.
There hasn’t been a “Star Wars” movie since 2019’s critically reviled “Rise of Skywalker,” and Lucasfilm head Kathleen Kennedy is departing the company as several films have started and stopped development.
Marvel is similarly facing an existential crisis: “Fantastic Four: First Steps” was its highest grossing film last year with $521 million worldwide, a far cry from the frequent $700 million-$1 billion grossers of the 2010s and an even more grim tally when you factor in its cost ($230 million) and the fact that it was meant to set-up a new franchise, with major consumer products and theme park implications. Last year also saw the release of “Captain America: Brave New World” and “Thunderbolts,” which were populated by characters from Disney+ series and largely flatlined commercially.
Over the past couple of years, Pixar too has suffered from some high-highs and low-lows. After a number of their original films were relegated straight-to-Disney+, they have occasionally had trouble finding purchase in the theatrical space. “Inside Out 2,” for example, was, until “Zootopia 2,” the highest-grossing animated feature in Disney history with $1.7 billion in 2024. But last year’s charming original sci-fi odyssey “Elio” failed to connect, making just $154 million worldwide.
The same is true of formerly surefire live-action remakes of animated Disney classics, which can be summed up with two movies from last year: “Snow White,” based on the groundbreaking masterpiece from 1937 (the first full-length animated feature), grossed $205.7 million worldwide, on a budget that neared $300 million; while “Lilo & Stitch,” originally earmarked for a Disney+ debut and released theatrically last summer, netted over $1 billion on a budget of just $100 million. A live-action “Moana,” with Dwayne Johnson reprising his role as Maui, is headed to theaters this summer.
The biggest problem facing Disney’s franchises is a lack of new IP. This is befalling its theatrical output and the parks (before it made billions of dollars, “Pirates of the Caribbean” was an original attraction at Disneyland). Sequels and live-action remakes have been performing well, but the well is running dry and each new at-bat for original properties or stories inside these studio umbrellas keeps faltering. Even if there is a hit, the runway on a follow-up takes years if not decades to complete, particularly in animation. (“Inside Out 2” and “Zootopia 2” for example, opened nine years after the original films; it’s likely “Incredibles 3” will open a decade after the previous installment, which opened 14 years after the first film.)
Walden will be critical to shaping Disney’s film and TV landscape to come in her newly created role of chief creative officer, and her warm relationships with talent from her storied TV career will come in handy. Disney needs new stories, plenty of them, and fast.
TheWrap Take: D’Amaro will face his biggest creative test in shepherding the kind of original hits that built Disney, Marvel, Pixar and Lucasfilm into the brands they are today, and attract the kind of exciting talent that will make moviegoers put down their iPhone or Switch and head back out to the multiplex.
Theme parks on a tear – for now
Disney Experiences, the division of the company responsible for the theme parks, cruise ships and consumer products, has become the most important slice of the Disney pie, as evidenced by Monday’s results. And it becomes more essential to the company with each passing year, as the television and film units struggle to keep up with the ever-changing American attention span.
But there are some signs of stress. While the company has committed $60 billion to the upgrade of its global theme parks, that starts to look awfully small given the number of projects and the scale at which they are working – everything from a reimagined second-gate at Disneyland Paris, set to open this spring; to a new park in Abu Dhabi; to new attractions at Disneyland (“Avengers,” “Coco”) and Walt Disney World (“Coco,” Disney Villains). All of this is coming out of the same budget.
There are also several more ships being added to the Disney Cruise Line fleet, including the massive Disney Adventure, which the company purchased after the ship was partially built, and will cost $1.8 billion to complete.
These are all lucrative propositions, made more so by the bullish yearly price increases that Disney has deployed, pricing out many of its biggest fans.
But Disney faces opposition from Universal Studios’ portfolio of theme parks and experiences. Disney’s attendance, particularly at Walt Disney World, has mostly flatlined, with no new attractions opening in 2026. Later this year Universal will open a kids-centric theme park in Frisco, Texas, and work is underway on a new park just outside of London, England.
A bigger international challenge for Disney will be getting a second gate open in Shanghai, which has become a huge priority for the company but faces some tough logistical challenges that D’Amaro will need to overcome. Meaning this is a battle for attendance that will be faced at home and abroad. He’s got to be careful not to price out the loyalists and make the experience too daunting for newcomers.
TheWrap Take: D’Amaro needs to make the parks accessible to everyone, not just for the wealthy, and thoughtfully expand their footprint around the world through original ideas, and not just IP.
A flagging stock
Coming out of the pandemic, shares of Disney surpassed $200 in 2021. But a series of unforced errors from former CEO Bob Chapek and the hangover from all of the spending to build out Disney+ started to take hold and shares sank throughout the following year, forcing the board to oust him and bring Iger back.
Since then, the stock has languished, moving up and down on a relatively tight range but nowhere near the highs from 2021. The volatility – and CEO succession issue – would prompt activist investor Nelson Peltz to launch a proxy fight against Disney seeking to replace members of its board, though Peltz was ultimately defeated.
When Iger returned, Disney shares traded at $100.12. In the years that have followed, the stock has hit a 52-week low of $80.10 and a 52-week high of $124.69 per share. On Tuesday, shares closed down slightly to $104.22 after D’Amaro’s appointment as CEO. Gorman called the stock “cheap.”
TheWrap Take: Can D’Amaro charm Wall Street into buying his story for the company’s growth, pushing its share price back to its 2020 peak levels?
Drew Taylor and Lucas Manfredi contributed to this report.
