Welcome back. Everyone today on the jobs of Carlson show, he's back. He's finally back to save the day. We have Bob Iger returning as the CEO of Disney. This is a little surprised that I was not expecting but we have this happening. It's real Bob Iger is the CEO of Disney effective immediately and even more importantly than that Bob Che pack is gone. Bob capex tenure as Disney CEO has been disastrous. And in this episode, we're going to Go over it.
We're going to go over, both everything, that's happened over the past two years with Bob, capek as CEO. And what I think the future holds with Bob Iger as the new CEO. So we have a lot to unravel and unpack in this video a lot to go over. And even to add two twists, we have another surprising twist. Something that I don't see too often and I hesitate to even highlight this because I think it's a dangerous game, I'm playing here, I have an instance where I think Jim Cramer may
have been, right? You may have made an accurate prediction. Action. This may be one of the few cases, and I'm going to go ahead and highlight it with caution on my channel. And then outside of the Disney news, we also have some important news with Elizabeth Holmes, the case has concluded and she received her sentence of a little over 11 years. In federal prison. I'm going to show how this Stacks up against other cases and compare her sentencing to
that of Sunny bhawani. So I'll be going over this as well. So as always, we have a lot to get to in this episode. Let's go ahead and Jump Right In. Now like I mentioned many times this, Channel is a little bit different than most channels on YouTube rather than just talking about investing and talking about finances. I actually show which transparency everything I'm doing with my portfolio, whether it's good or bad. I track the passive income
portfolio, week by week. This is a variation of a dividend growth portfolio with a strong emphasis on Compounders companies that have certain characteristics that I think lead to outperformance. Now this portfolio has done really well in fact, year-to-date, it's only down twelve point three, seven percent that's Bad being down, 12 percent, the S&P 500 for examples, down 17.5, and the qqq's down a bit more at, minus thirty percent.
So, even though the portfolio performance overall is doing well, there's one company in my portfolio that's doing particularly bad. That company is Disney. I'm down seven thousand five hundred dollars on Disney. Now, when I originally picked Disney, this is supposed to be one of the safest picks in the market. This is a company with Incredible brand value. A huge mode, it has, As International presence, it had high profitability, Disney was a shoo-in.
This was a company that's been around for 100 years and isn't going anywhere. But this company has been my worst performer by far in the passive income portfolio, Disney's done. So poorly over the past couple of years, it's down 41 percent year-to-date and it wasn't doing great before then, in fact, over the past five years, half a decade. Disney's down - 11%, and this is a company that No longer pays a dividend so it doesn't pay a dividend and the capital gains are down.
This has been a very difficult stock to hold onto. It's been very discouraging to keep invested in Disney and before Bob iger's surprisingly took back the CEO role. The sentiment for this company has never been lower. And I personally believe that a large part of Disney's under performance is related to one individual who was the CEO of the company, Bob, capek. His tenure over Disney has not
been good. Let me lay out the trail of problems and unforced errors, that Bob, Okay, Peck caused problem, number one, Scarlett Johansson sued Disney 450 million dollars. A public lawsuit, from one of their biggest and most respected Stars. She sued them because they didn't want to pay her as much because of their streaming service. There is problems with the deal, and they tried to undercut.
Her pay Scarlett, Johansson probably talk to them privately when they refused, she made it public with a lawsuit. This was an absolute disgrace for Disney. It was an embarrassment. It was a black eye on the company. One thing that Bob Iger prided himself was his relationship with Talent.
He had a very positive strong relationship with all of their cast members all of their Stars. He never experienced something like this one of their biggest stars ever someone that they've worked with for literally decades is suing them openly because of a dispute over a payment contract that was a black guy and this happened under Che Peck and most likely could have been resolved under Che Peck.
But instead of resolving this problem quietly outside of the public eye, it became a huge public Fiasco and Scarlett Johansson ended up settling the case with Disney, for likely the exact same amount that she was originally supposed to be paid. So Disney really had nothing to gain from this. All they could really do is hurt their own image. They made this look like a big bad company. This huge corporation was going against one individual trying to
get the paycheck. She agreed to the imagery and Optics from this case couldn't get possibly worse. This is a foolish unforced error by Bob capek problem. Number two, There's another massive unforced error by Bob jpg. Not only did he decide to go into the Mucky world of politics where everyone gets some mud on them? Everyone gets a little dirty but he did it in the most strategically. Poor way possible picking a fight against possibly the most
popular governor in the country. Rhonda, Santa's, who just won re-election in Florida by a 20 percentage Point margin. This is the governor that Bob capek decided he wanted to pick a fight with and try to bully and this did not work out. Well for Disney, this fight was centered around a bill being passed in Florida called parental rights in education. This bill prohibited classroom instruction on sexual orientation and gender identity in kindergarten through third
grade. Bob capek, Not only was opposed to this bill and a Critic of it, but he was incredibly outspoken, going. As far as to say publicly that the entire goal as a company. As Disney was getting this bill quote, repelled by A legislature or struck down in the courts. Now even if you oppose, the bill politically you Admit that this was a strategic mistake from Disney.
Ron descent is use this as part of his re-election campaign saying that the residents in Florida are not going to be governed by Rich Executives in California like Bob capek and they're not going to be bullied by big companies like Disney it position, Rhonda Santa's as a defender of the people against corporate, power and Rich Executives. This was a huge talking point from Republicans across the board. Rhonda Santa's benefited from these attacks he wasn't hurt by them.
He benefited from them. And on the other side, it's very difficult to argue that Disney benefited from this at all. Not only did they lose the political fight, but they also alienated a large portion of Their audience. A lot of Disney customers are conservative and do support that bill. So, they put themselves at odds with a large portion of their customer base and their
shareholder base. They also had another consequence, which is a retaliation from Florida by stripping, Disney of its independent special district. This is a very unique benefit that Disney had for decades and now it's been removed and Ron Auntie has warned that if any company like Disney uses quote, its economic might to attack the parents of my state that he would view it as a provocation
and fight back. So just to revisit so far, this is the beginning of Bob capex, tenure one, he offended. One of his talent members putting a black eye on Disney with an embarrassing lawsuit from Scarlett Johansson and the to we goes to war with one of the most popular governors in the country, in an attempt to alter and dictate the local laws of a state that he's not even a member of.
But that's not where this stops. We have problem 3 now the third problem with Bob jpeg is Dated to the content that Disney has been creating. I know that Bob capek is not the creator of the content. He's not the one that has the direct control, but he does have Direction over what the content should be. And the type of risks being taken and over the past couple of years under Bob capex Helm Disney has not been taking a lot of risks.
Their content has become so incredibly safe, that sometimes it's now just becoming bad. Pinocchio is a prime example of this, the live-action remake from the original Pinocchio is almost worse than every way. The animation was good but almost everything with the storytelling was worse and that's apparent in both the critic reviews and the audience reviews, 28 percent on the Tomato Meter is bad enough but those are the professional critics sometimes they get it
wrong. When the audience has a similar score 29%, when both critics and the audience are both unanimously saying these shows are not good. That should be a clear message that Disney's content is not going in the right direction and this issue lends itself to a bigger issue, Disney straying away. Away from its origins in storytelling and the CEO needs to get this back on track in this Wall Street Journal interview just a couple months ago, the interviewer aptly
points out. This problem with Disney's content know, your people love to get out there and say Disney's to woke Disney's become to correct politically correct. You know, are they right to David Point? What's your take on that those criticisms and reaching that wide span of people that interviewer asked a very good and specific question? The CEO of Disney. Many people are criticizing. The Disney has become too woke and that's making its way into the content.
That's a direct question and listen to the way Bob capek answers it. I think, the more complex something is the more you have to really drill down into the basics and we want our content to reflect the rich diverse world that we live in. And again, I guess that's another way of saying catering to your to your audience but the It is a rich diverse place and we want our content to reflect that. And we're so blessed to have the greatest content creators and they see it.
Similarly, but I think that's good from a commercial standpoint as well because then you appeal to the largest possible audience and certainly, you know, we live in a world now where everything seems to, you know, be polarized, but I think we want Disney to stand for bringing people together.
I always A, when someone walks down Main Street and you look at the castle, you're not thinking, you know, I'm on one side of the political Spectrum or the other, you have a shared belief and all the wonderful aspects of what Disney is and we want to use Disney to bring people together. And I think we'll do that by diverse stories and diverse characters. What is this nothingness answer? He didn't say anything.
He just threw in the keyword diverse and diversity, six different times and these type of mumbling jumbling nonsense. And Answers were routine with popche APEC. It was difficult to get any type of straight answer from him at all. He was asked specifically about a specific type of content, woke content making itself into Disney repeatedly, and people complaining about that.
And his answer is to throw out some key buzzwords like diversity, five times, and Mumble about bringing people together, this interviewer goes on and even pushes back further on this content trying to get a straight answer from Bob capek, do they like the Type of content that's coming out. And he specifically asks about Pinocchio, the new Pinocchio, verse the old Pinocchio, you mentioned Pinocchio, if I may be wrong, but I think the new Pinocchio, he doesn't change in
the end. He just accepts himself for who he is. So the ending has changed a little bit with sort of contemporary mores and that's correct. The new Pinocchio doesn't really
change at all. He just accepts himself the way he is, which is a dramatic difference between the old Pinocchio. The old Pinocchio's held up as a masterpiece specifically because of the morals behind the 3, it was about your conscience, being your guide, following your conscience learning, not to lie, learning not to go with untrustworthy individuals and Pinocchio, had a learn these
lessons to become a real boy. This story taught us that if we grow up and we go to Pleasure Island and succumb to every worldly Temptation, will eventually become a donkey and it's not a fun path to go down with the new Pinocchio. Disney's new version of it. There is no such stories taught, no overriding morals to it. There was just things happening to Pinocchio and Didn't really have control over any of it. And as this interviewer points out, the new Pinocchio,
basically learned. Nothing he just accepted who he was, there's no really overarching story. No cause and effect. The new one was just a more safe less compelling less interesting rehash of the old original and again, this criticism is not unfounded audiences are not liking this. Even the critics are not liking this. The critics are saying that it's losing the point of the original film letting your conscience.
Be your guide, audiences are saying, just watch the original Pinocchio. Instead now I Don't know exactly how much influence or control Bob. Capek has had and the creative Endeavors, but he is the CEO of the company. He can, if he wants have direct influence over the content of the company, and the type of risks are taking. And in this part, Disney has been underwhelming further along in this interview. Bob capek basically reveals that he doesn't understand Disney as
a company. He really doesn't understand the content portion of it at all, which is basically all of Disney. I always say that one. Our fans and our audiences, put their kids to bed at night after watching Pinocchio or Dumbo or Little Mermaid. They're probably not going to tune into another animated movie, they want something for them.
Yes, you heard that right? The CEO of Disney, the most creative company on Earth, views, animated content, as not a medium of entertainment, both enjoyed by adults and children, but just something to put the children to bed. Throw on Pinocchio, throw on Dumbo. Those are just children chose. And after they go to bed, then the adults can turn on their non animated series. The guy doesn't even understand the company that he worked for, he didn't even understand, animated content.
And this is a slap in the face to his own employees animators of the company, working on an animated content to suggest that the only people driving joy out of it. Our children problem number four and possibly, the biggest problem, bad operating performance. And keep in mind, this was the thing that popped a peck was supposed to be uniquely good at. He was the ater of the parks business. He was good at growing revenues growing income on a consistent basis.
Having good operations, that was what he was uniquely suited for. So you could give excuses for the other thing. All right, maybe he's not good at dealing with Talent. So let's go ahead and give him a pass on the whole Scarlett Johansson suing, Disney thing. All right, maybe he's not good
at politics. He lost the battle against de santis that didn't go. Well, that didn't turn out well for Disney, but we can give him a pass on that because he's not a politician, and maybe we can even get My pass on, not really understanding the content because after all Bob, capek isn't the creative type. You could give them a pass on everything else. But the one thing this guy is supposed to be good at is operations, churning out profits
from this large organization. So let's go ahead and see how the operations of the company. The actual numbers look over the past two years. This is about when Bob capek took over for Disney. Now, we can't blame this large loss right here, for these two quarters on Bob capek. That was because of the covid-19. Pandemic, the entire park operation was shut down for about a year, so we can give them a pass on that.
There's nothing you can do about that, but the last seven or eight quarters, Disney has been open fully operational. The parks are open business as usual and the earnings have been abysmal. Quarter after quarter a continual disappointment, especially now that investors are trying to focus on profits for the corporation, Disney's not producing any profits we can. Look at the free cash flows of the company and over the past couple of years it's been Really pathetic.
Last quarter was 187 million dollars in free cash flows. When we factor in stock based compensation act, based composite actually higher than their free cash flows. For the first time in a long time for Disney, this is no longer profitable. Company costs are going up. Cash flows are going down and Bob capek, the great operator. The person that supposed to be good at turning out profits, the seeing a continual decline in cash flows. How much of this you can blame on Bob?
Capek is debatable, the company is going through a Transition and I don't think he deserves 100% of the blame but I don't think that he's blameless in this situation. Bob capek has done a lot of changes operationally to the company and so far every report and every piece of data we can look at says, that most of them are negative, Disney's New World Order leads to confusion and bruised egos. What Bob capek did immediately when taking over was
restructuring the company? And so far this restructuring looks like it has been a disaster. Disney's reorganization of its media and entertainment. Business into three, distinct content creation, groups, Studios general, entertainment, and sports has caused consternation for some senior managers, as well, as those doing business with the company. The reorganization was aimed at better positioning Disney for a future that would be determined
by its success in streaming. The goal at least on paper was to have people work, more harmoniously across mediums, from television to film to Disney. Plus, the results have left. People. Deeply confused about how to navigate the New Order, the restructuring has made A lot of their employees upset and it's actually made Executives in the company. Try to keep themselves a little bit separated from what Bob
capek has been doing quote. Everyone is becoming more and more differential tugce Peck things are radically different than they were six months ago and this Insider who has an executive said that they're trying to become more insulated from the upheaval from the creative teams. And again, you can try to make excuses for everything else. But this was the thing that Bob capek was supposed to be good at
the operations. After this most recent earnings, Report Disney shares drop like 15 percent in a single day because of how disappointing the earnings were. It was creating around like a penny stock. And this is Disney. This is one of the best properties and Assets in the globe and its trading like a penny stock. And that's how we get to where we are now. Bob capek was fired. Bob Iger is back. Both of this to me was shocking and I think it's shocking to most everyone that's been
following this company. Cbc's David Faber. What his thoughts are? Sauron this because he told you no way. Did you always think that there was a way way back for four? I don't know what he's not necessarily your friend but you know him. Well did you think there was a way back?
David it? No. I it seemed highly unlikely certainly you'd have to imagine of course this scenario like the one that has played out and we can talk a bit more about that but even with the idea that his successor, mr. Champak would not succeed. So to speak the idea that that Iger would then come back. I think even as little as a few weeks ago, Joe, I think would have been hard to imagine. I agree 100%. In fact, we just heard this year.
The Bob capex signed another three-year extension to a CEO role, so this is a complete shock. I did not see this coming. I didn't see Bob jpg being fired right now and I didn't see Bob Iger coming back. But the way these things work in most cases is you have the CEO, the supposed to guide the company, the right direction, but the CEO works for the shareholders. And the board protects the shareholders.
In this case, the board, obviously, felt along with many other shareholders and many Disney customers, that the CEO is not doing a good job running the company. So Friday evening, they contacted Bob Iger and said, hey, do you want to come back in? What do you like to replace? Bob capek. We don't like what he's doing. Once they confirmed that Bob Iger was willing to step back into the role. They fired Bob jpg, and they fired him Sunday evening.
So he only knew Sunday evening that he was losing his job. Disney no longer the CEO of the company, and I can't imagine it feels good to have a surprise firing from being the CEO of
Disney on a Sunday evening. I don't know how Bob jpg feels right now, but I don't envy that but either way, it was something that needed to be done, but this was a board Joe that felt like it didn't have a lot of choices at this point, is my understanding, you know, after speaking to a number of people close to the situation, this came together pretty quickly, but the board did have concerns for some period of time. Those concerns were heightened. Of course, after this most
recent, Earnings report. It was not a well-received report. The conference call was not well, thought of the losses associated with direct-to-consumer. Obviously having grown, even though the promise to be profitable by fiscal year, twenty four Remains the board got more and more concerned that board led by Miss Arnold made it clear to mr. Chae, Peck last night that he was out. My understanding is the only approach tiger on Friday Friday night and sealed. Able to bring him back as of
last night, Friday, the board. Contacted Bob Iger asked him if he would do the job, he said he would and then Sunday evening, they fired, Bob, capek, and Bob Iger right now is tentatively going to be working for two years. So here we are with Bob Che pick out Bob. Iger back in the stock is up 7 to 8% and on this subject I want to highlight one clip from 12 days ago. This interview here was from 12 days ago right after Disney's terrible earnings and I Highlight this and I think
daringly. So, as possibly an example of Jim Cramer being right, can I propose that is that safe to propose that he was correct on something? Jim Cramer was asked what needs to happen with Disney. And again, this was 12 days ago, Disney, if they have ESPN, if we were on ESPN, we would say he's got to be fired. That's pretty cut and dry. You're firing. Bob jpac, is that we were saying absolute absolute. Absolute because I thought that he had a couple of years, the
teams going downhill. I mean that was incredible. Last night was really team has been going downhill. I had Faith semi faith and Frank Reich in the Colts and I still do it with Frank's, you know, winning record. But there is just a doubt, no doubt that he did. He has to go. I mean, that was just unconscionable. There's no doubt that Bob jpeg has to go. Absolutely, no doubt.
And he was saying this a week ago and the quartered self the way he handled it. I mean, made it sound like he was just a 4-star quarter delusional and I believed and I was wrong. I was like, let me just go back for a second. Do you think that it's shape? Heck the man or do you think it is? The I think he's a cyclical and secular headwinds that are facing. There's no, no way. You think? Yes, like a bad team. It's the same team. What happened here?
Is that even the the stuff that he was good at the stuff that I, that I know, it's a little harder to control theme park, but the the losses Here, Andrew, we're just mind-boggling. I mean, when you're going over the quarter, it's stunning. And that's why I say, if it worked, if this was the NFL where they have tremendous, tremendous accountability, and we were watching their program of Sunday morning. We would everyone together would say he should be fired.
There's got to be something really wrong with the world. When even Jim Cramer's, getting such a correct call. Now with all of that that brings us back to where we are now again, Disney's one of my larger Holdings in my portfolio. It's a company that I think has great assets. That's the biggest reason that I've bought into this company. I think that all of their Teas and their intellectual properties backed up and supported by their Parks, plus
the asset of ESPN. I think all of that is incredibly incredibly valuable with ESPN, with Hulu, with Disney plus, with all of their various Parks. I think this company just has great asset after great asset, and a company with this, many good assets, should be using them to generate profits. That's what companies do that have. Amazing assets. So this is a solvable problem, in my opinion, Disney should be
a highly profitable. Penny right now, I don't think the current economics of the company reflect its true potential and I do think that it will take time, this isn't going to be an instant fix by Bob. Iger, it's not going to be an overnight thing. I think it will take a number of quarters to correct this issue, but I expect a better outcome with him at the helm and it will give Disney. And the board of directors, time to find a more suitable
replacement than Bob capek. So, in my opinion, I don't see any downside with this move. I don't see any potential problems. I think this was a great move by the board of directors to protect the shareholder. At the end of the day, that is who they serve. They serve the shareholder of the company and whether or not Che Peck was a great guy or not. He wasn't doing a good enough job in Disney's much bigger than he is.
So, he's got to go. We have someone in there that has proven to do the job for a long period of time. You can do it for another two years. So, as of right now, I'm going to continue to still hold this company. Now moving on, we have the news that Elizabeth Holmes was finally sentenced. She was sentenced to eleven and a quarter years in prison. Defrauding investors. And a lot of people argue about whether or not this sentence is appropriate. So let me share my quick thoughts on it.
First of all, I'm happy to see that. It's at least not a slap on the wrist. If she got four years, five years for this type of thing, I think that would have been a real problem, 11 years as a federal sentence, which usually don't get cut short too often. That's a real sentence. She's going behind bars. For a long amount of time that is a serious punishment. Is it as bad as it could have been.
Absolutely not a lot of different analysis shows that many people are sentenced to a lot longer for the same crimes. So you can argue that Elizabeth Holmes did get off easier than expected, but I still think that 11 years is better than it could have been. I think there's a good chance. It could have been six or seven years if the judge wanted to go extra lenient. Honor the big problem. I have overall with this entire case is not really the
sentencing. But the convictions Elizabeth Holmes was only found guilty on four separate charges. She was found guilty on three of the nine fraud. Counts. And one of the two conspiracy counts and then you look at her partner in crime and her love interests on eBay Lonnie, who she had literally a romantic relationship. There is so close together for a number of years. But in his case, he was convicted of all 12 counts of fraud. They convicted Sunny bhawani with everything and Elizabeth
Holmes with only four. So even before we got to sentencing, I see a huge discrepancy in the amount of convictions, but if you take that out, I think the sentencing of 11 years was at least decent. So that's all the news for now. I hope you enjoyed the episode, I'll have more content. Out in the future and I'll see you in the next one. Out in the future and I'll see you in the next one.