Largest entertainment company ever? Return of Disney boss Bob Iger sparks Apple merger speculation
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As Bob Iger returns for his second stint in charge of Disney, some insiders believe he’s angling to be the company’s last CEO ever by facilitating a blockbuster sale to tech giant Apple.
The move would likely result in the largest entertainment company in the world if deemed legal by the US government, which has recently cracked down on antitrust cases.
“He’s going to sell the company,” predicted a Disney source who has previously worked with Iger.
“This is the top deal for the ultimate deal maker,” they added.
Iger has a long history of acquisitions and deals, beginning with the purchase of the Steve Jobs-led animation studio Pixar in 2006, followed by Marvel in 2009 and Lucasfilm – owner of Star Wars – in 2012.
The company’s board of directors asked Iger to “replace” former CEO Bob Chapek on Sunday night.
While Disney would be a giant to buy, probably costing around $200 billion, Apple is one of the few companies in the world that has that money ready to spend.
Disney’s incoming CEO Bob Iger, who previously ran the company, is said to be considering a merger with Apple
Iger was good friends with the late Apple visionary Steve Jobs and built a personal and professional relationship with him, beginning with Disney’s deal to acquire Pixar, led by Jobs
Former Disney CEO Bob Chapek said he initially chose not to speak out against Florida’s Don’t Say Gay law to balance the needs of customers and employees
The California tech giants currently have a cash stash of about $48 billion, and if investments are included, the total figure exceeds $200 billion.
Apple already seems interested in the kind of product Disney would sell them – they’ve put more effort into making a claim in the streaming world with Apple TV shows like Ted Lasso and Severance.
“I think he’d welcome it — he’d be Disney’s last CEO,” a former Disney executive told TheWrap.
They also noted that the two companies could mutually benefit because they share a similar “brand identity.”
Meanwhile, the company’s poor performance under the outgoing Chapek has been attributed to several factors: disappointing financial results, major losses in the streaming business, and Chapek’s mishandling of the company’s response to Ron DeSantis’ Don’t Say Gay bill.
The bill restricts LGBTQ discussions in Florida schools for students in third grade and below.
Susan Arnold, chairman of the board, announced the change in a statement Sunday night, thanking Chapek, 62.
“We thank Bob Chapek for his services to Disney throughout his long career, including navigating the company through the unprecedented challenges of the pandemic,” the statement read.
Iger also shared a statement of his own about his excitement over his return, but made absolutely no mention of Chapek, fueling rumors of an acrimonious split between the former friends.
Far from saving the company’s weak results, Chapek’s not-so-brilliant tenure as CEO caused the company’s earnings to fall even further over the past year – when many pundits argued it would recover.
Since losing more than $10 billion during the pandemic, shares of the company are down about 41 percent year-to-date from Friday’s close.
The stock reached a 52-week low on Nov. 9, less than two weeks before the company’s shock announcement, where Brass claimed that Iger “is in a unique position to lead the company through this critical period.”
Iger has worked for Disney for more than four decades, including 15 years as the company’s CEO.
But considering how strict the federal government has been recently with regard to invoking antitrust laws, any deal between the two companies could be considered illegal.
A federal judge recently blocked a bid from publisher Penguin Random House to buy rival Simon & Schuster, in a $2.175 billion deal that would see the two giant companies merge as one company.
The judge agreed with the Justice Department that the merger of two of the world’s largest publishers could reduce “competition for” best-selling books.
A similar conclusion could be drawn from this proposed deal as Disney and any of its acquisitions taken over by one of the world’s largest tech companies could reduce competition.
Apple’s recent share price – given how strict the federal government has been in enforcing antitrust laws, a deal between the two companies could be considered illegal
Disney’s poor performance under the outgoing Chapek has been attributed to several factors, including streaming losses
Aerial view of Apple’s headquarters in Cupertino, California – Apple already seems interested in the kind of product Disney would sell them, putting more resources into streaming
But the government has not won all the antitrust battles so far and suffered losses in several sectors.
The DOJ lost its bid to stop a major U.S. sugar manufacturer, U.S. Sugar, from taking over its rival Imperial Sugar Co., one of the largest sugar refiners in the country. Prosecutors indicated they intend to appeal the decision.
They were also stymied in their attempt to block the roughly $8 billion acquisition by UnitedHealth Group, the largest U.S. health insurer, of Change Healthcare, a healthcare technology company.
The DOJ has also been battling American Airlines and JetBlue in an antitrust lawsuit in federal court in Boston challenging their regional partnership in the Northeast, which the government is calling a de facto merger.
Iger’s relationship with Apple goes back even further than an opportunity in the streaming space. He was good friends with the late Apple visionary Steve Jobs and developed a personal and professional relationship with him.
Jobs and Iger teamed up to bring about the Pixar-Disney merger, and Iger wrote that this was the beginning of a successful relationship in Vanity Fair.
“The ease and speed with which we got the deal done, coupled with the fact that it showed admiration for Apple and its products, stunned Steve,” he said.
“He told me he’d never met anyone in the entertainment world who was willing to try anything that could disrupt his own company’s business model.