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Ten year is back to 434. We're going to begin that with Disney winning that boardroom battle against Nelson Peltz and looking forward very much, David, to your interview. Not too long from now. Yeah, you know, so much to talk to Bob Iger. Bad as there always is and I always look forward to our conversations as we've had them through the years and even more recently at a decent pace of late. You know, victory, as we all know, for Disney. Not unexpected at least if you've listened to my reporting through these last few weeks and months. I mean, Jim, I'll come back to you on this. I don't know whether you were surprised at all. It was always seemingly an uphill battle for Nelson Peltz. I argued, I think in part because it was never clear beyond just saying this company needs better board oversight or more focus on its succession that there was anything he suggested in any way that hadn't already been taken up by Disney and pursued and partially already executed on. Well, I think it did come down to succession, David. I think that was the one thing that you could argue they did really poorly. But you know what really defeated Nelson, I think, is this stuff was the best performer in the Dow. And a lot of that may have been just Bob Iger focusing the company. You can certainly ask him if he'd be great. I don't know how much it was. Well, we got to focus in order to be able to keep Nelson off the board. But I think that Iger made a series of, let's say, I went looking, came up with some good ideas. I also feel, David, you got to ask him this, that they've got Gorman doing a succession with Parker, but Gorman's a hitter. And I think that made a lot of people feel, wait a second, got a new guy, fresh perspective. Let's go with this. I would also know why did ISS go with Peltz and not with Disney? I want to say I agree because I never felt this was Peltz versus Iger. You may disagree with that, but I never felt it was that. Yeah, well, listen, it did get fairly personal, of course, and it may have been as much like her mother and Iger. That said, Iger got 94% of the votes cast in favor of his directorship. Peltz, as we reported yesterday, 31% versus some 63% for the director that he was targeting. So, you know, a decisive victory here for Disney. As you typically do when you prepare for an interview, I went back and read through the transcript from our interview from February of 23. I read through our interview from Sun Valley. I read through Andrew's interview with Iger from his deal book. And Julia is more recently from the first quarter numbers. I mean, Jim, one thing is that Iger did make certain promises that he's already kept in terms of cost cutting, in terms of turning certain things around. Obviously, there is a great deal yet to come. But I also think that was in his favor as well. Yeah, but let's not forget, New Johnson came in. I know you from PepsiCo. The guy's money. Okay, so he comes in. He basically resets what you're doing financially with Iger. Iger comes back and endorses the 7.5 bill instead of 5.5 billion in terms of cost cuts. Is ESPN fixed? Well, that wasn't something that Nelson was even talking about. But is there a succession plan that, I think, David, is the key thing to focus on if I were out there. And I know that you've read everything, but there still is a question, how did they go so wrong? How did that board, which we know was filled with heavyweights, go so wrong a succession? And that, David, I really need to know. Well, I'm not sure you're going to get there. I mean, we're going to, you know, we'll see. We'll see what I choose to ask. That's the nice part. I mean, come on, I don't have to listen to you. Yeah, I don't have to listen to what you want to ask. Oh, is that why is that why you or is that HUGH? [LAUGHTER] To your point, that was an important appointment for them. And, you know, the sense of urgency that Hugh Johnson said they are working with right now is also something that was well taken by the investment community in terms of sort of that sense, Carl, at Disney and trying to execute on so many things. Most importantly, still direct to consumer, where, you know, they're going to have a $23 billion revenue number or something along those lines this year and get to profitability before the end of the year. Yep. Listening to deal around Squawk this morning, I think his words were a great waste of time. And Jessica Rieferlic, David, who did point out earlier that the focus now is going to be getting on growth and just pushing on the growth, particularly when it comes to DTC. Yeah, I mean, the key is the margins. How do you, you know, can you ever get close to what Netflix has? Well, they're not saying they're going to be able to do that in the near term, but I think the longer term, the hope is it will be a growth business. Listen, the conversation that Bob and I have been having for years, of course, is can you ever replace in a real way this business and the incredible margins that have come with the cable ecosystem and the beauty of a business where people pay you even though they don't watch. And that's still going to be extraordinarily difficult, but it's been a process that's been fascinating to watch. The battle against Nelson equally fascinating. And now we kind of move on from here and see what happens. You know, David, it's interesting. Last time I was watching "Last Call" and Jeff Sonifel was on. All right. And Jeff Sonifel, not a lot of meaning in mind between Nelson and Pelsa Jeff Sonifel. But Jeff is basically making the case that this was Nelson's finish. I want to go a step further by saying he thinks that Nelson's the greatest welter story of all time. Nelson has said in the FTPs, for instance, it's not about Nelson versus Eiger, but it did get so personal. Was there a way that not as much money had to be spent? And was there a way to keep it not personal? Because there were issues about succession that obviously had some gravitas. Or was it always going to end up being Nelson versus Eiger? And therefore, if you look at the percentage that Eiger got, well, that's pretty clear victory for Eiger versus the male numbers that you talked about, which was not as clear. No. Well, I mean, 63 to 31 is still pretty clear in terms of the director that he was focused on. Listen, I think Eiger had made it clear from the very beginning. Remember, when we -- when the first go around, that he just never felt as though there was a real reason for Nelson Pels or anybody else that he might nominate to be on that board given the board that they had in place. That continued to be the case throughout. And again, you talk about it being personal, we'll talk a bit about that. I don't want to, you know, give a sense to how many questions we'll have. But as I pointed out, like Perlmutter was the bulk of that try-in position, so to speak, as you well know, Jim. Yeah. And there is no love lost between Mr. Eiger and Mr. Krueger. That is probably one of the most bitter situations, not just in entertainment, David, but in business. Period. And I'm sorry. What did you make of this journal piece looking at try-ins, gains when you fold in the Perlmutter cut? Basically equivalent with the S&P return over that period. Right. Well, I do think that if you spend, say, 25, 30 million, you get 300 million in return. That's not bad. I do think that there's just this big dispute about when Nelson joins the board, how does a company do, versus when Nelson has a position in it, when trying to position it. And there's also this kind of, like, overall -- should we be looking at companies like this? The guest who was talking again, son, was saying, "You can't compare the S&P anymore. I think S&P is a worthy benchmark." But, Carl, I think that when I look at what happened with Nelson, I actually come back and say, "There's a lot of that percentage, a gain of Disney." That was because of him, and I don't want to just say, "No, they suddenly just woke up and said, "We got to get religion." Companies don't do that. Don't say, "You know what? We've been bad. Let's be good." That's not the way it works in corporate America. Of course, David and Iger, just a few minutes away, we look forward to that. I just could be unbelievable. It's going to be huge. I'll tell you, I think -- and not just because David's got the exact same shirt, alpha combination, but I think David is going to be surprised at the highest road that Bob takes. Now, I don't know where they'll go back and say that Peltz and he used to be friends, and it's time to break bread. David, that break bread may be too hard, right? You think any bread will be broken? No. I don't believe any bread will be broken. But maybe nothing else will be broken either, so I guess that's it. That's true. That's true. And we did try to get David, Steamboat Willie. Apparently, it's not public domain. It's just domain, whatever that means, master domain. I don't know, it's like something. Disney's protected by the right thing. Whatever that was. Yes. We had time moving on to markets this morning. Interesting picture, last 48 hours, Jim. There was the ISM services number, prices paid, lowest since 2020, and then Powell sort of, did the market take comfort in sort of the same refrain? Yes. I mean, I think that there's this kind of, we got to get rid of the gas bags. I didn't mean that. There's a lot of fed speak to it. You know, fed people speak. I once spoke in a rotary club. It's nice. They do a lot of rotary club. I mean, it's like, Bob it. It's like Sinclair Lewis. These people are like, well, okay, they give speeches. They got to say something. They said it's got to say, someone from Philadelphia says they say something, and so does someone at St. Louis. But there is one guy. And you know that we should be listening to. And the other guys are just noise. They are noise, Carl. Do you think fed speak has a tendency to want to be visible and stand out and maybe that moves their view at the margin to the extremes? No, I think that they have to say something and they do have views. Right. But we have a very powerful fed gene. Very powerful. Who takes counsel of themselves. One of the reasons why he's so good is he's got rigor. He doesn't just bounce around and say, well, today is the day we should do too. And he's incredibly conscious of his words. These other people seem to think, you know, we can say whatever they want. Because they're not playing a hedge fund game. They don't realize that we have on every word. And there's algorithms that go with them. And now AI and we're like chat cheapy team, what they said before that. And we're measuring that against Jim and I and coming in and looking at Claude for. They don't get that. And they ought to just be quiet. But they do have to speak in the same way that when I spoke at the Rotary Club, I couldn't go up there and just say, you know, I think that Bryce Harper is the greatest hitter. You hadn't like say something. Right. Meanwhile, JPM desk today, given the data yesterday, maybe tech and cyclicals can be supported here. And there we go. And they come back. Now, yesterday was a fade rally, the only thing that was really up were the companies that benefited from the fact that Taiwan sent me was offline for a couple of days. The DRAMs can be made in our country by Micron. And they were offline in Taiwan. Well, that gave Micron a big edge. So Micron stock just shot up. Dell had enough, they had the right chips at the right time so they can go up. And it was the Taiwan earthquake. And that's kind of going to fade as we realize that maybe Palace is not bad and moves to 30 years. But I don't want to get too excited until we see the number. Give me tomorrow. Yeah, I mean, look, we need to know that wages haven't gone up and these people aren't making more, unfortunately. It's reality of what we want. But we stay with employment strong because that's what, what Palace are you in? Right now is, hey listen, we're actually getting, we're kind of nerve-onier. We're having more people employed and ways aren't going up. So why do we have to cut to accelerate it? But if things get bad, well cut. That's been what he's been saying for two years. But somehow we've got, you know, Fetchy from, we should have more Fetchies. I think that frankly Trent should have a Fetchy. And by the way, San Jose lacks a Fetchy. Let's give them a Fetchy. We are, we're going to get the jobs over tomorrow. Claims did come in 221, a little ahead of 214. But tomorrow is going to be a big day. And Powell literally did say policy is in a good place. Yeah! When we come back, we'll get the latest on M&A. David's got some news surrounding Paramount. We'll lean on him for that. As we mentioned, his exclusive with Disney's Bob Iger. In just a few moments, we'll get to some other news. Levi's an interesting story today. Boeing, Tesla as well with some more reaction from the south side. Squawk of the streets back in a minute. The spirit of performance defines Accura. Now, it's electric, introducing the all-electric ZDX. Accura's most powerful SUV yet. While what powers their cars may change, the energy that makes Accura never will. Crafted using the same formula that brought them electrified supercars and multiple MSA championships, the ZDX has tracked tested performance that packs an energy all its own. 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Of course, not too far from here at least in terms of Paramount lot and the like. Stock is going to look down this morning but was up sharply yesterday. This on reports in the journal and other places that David Ellison, who runs Skydance, is an exclusive talks with Sharia Redstone, the control shareholder of course of Paramount. It's a deal that I've been talking about for quite some time. In fact, if you look back on my reporting, you'll see that it's the one that I've been focused on in part because so many others around the situation have said it probably is the one that has the best chance of happening. It doesn't mean it necessarily will but certainly the best chance. Along with that reporting yesterday was also news that Apollo, which had previously been on the Paramount studio, had actually made an offer of some $26 billion. That's an enterprise value. Remember Paramount's got some about $11, $12 billion in debt. But $26 billion enterprise value overall billion bid for the whole company. That may have given shareholders some excitement perhaps but of course you have to be reminded what a control shareholder is. They have the right to say no to anything they want to say no to and in this case as I previously reported, Sharia Redstone has not been interested in either a bid for the studio for which if there were to be an actual sale, you'd imagine there might be other buyers other than just Apollo and/or a deal at all. My understanding from people familiar with the situation is yes, Apollo did put a letter in but there was not a lot of detail around it, not a lot of work that was presented along with it. Some people even mentioning it wasn't even signed by the upper echelons of the firm which perhaps gave them some pause. Nobody is questioning Apollo's ability to mount a bid of course. It is one of the major alternative asset managers out there. But in this case there just seems to be some doubt accompanied with it. Perhaps that is also contributed to why they are very much focused on trying to see if they can get to the finish line with David Allison who runs Skydance and his partners at Redbird, the bid that they may have. That is a complicated transaction. I've gone through it in the past that would involve the merging of the Skydance studio with Paramount. It would involve paying a premium for national amusements and the stake of course that it has the control stake in Paramount but not necessarily buying out the company. Along with this deal is an important component that I've mentioned a number of times but perhaps has not gotten enough focus which is the need to raise as much as $3 billion in new equity by Paramount. That would be part of the deal were to be agreed to. Now my understanding is that Allison and his partners would step up for a purchase of a good amount of that equity. But it would be dilutive, it would be common, it would be dilutive, it would be done in part to enable delivering and also to give the company some growth capital to put it on firmer financial footing. Remember this is a company that just had its bond rating downgraded very recently as well. So there's plenty to come here. Special committee of course has to weigh in. Its advisors have to weigh in. But I am hearing a lot of at least positive perspective on the possibility that this deal does get to the finish line as difficult as it might be to actually execute that. There does seem to be a real affinity in terms of Shari Redstone for the plan that's been put forward by Mr. Ellison for the synergies that would be potentially available, the changes in operations as well. So guys you know interesting to sort of watch and see and again always important to point out to people when you have a control shareholder you can't guarantee that you're going to come out on the right side here. Now there is going to be a need for a potential majority of the minority vote. You have a special committee as I've said and by the way as part of the deal they have to agree that Skydance could get merged into paramount. But keep an eye on that 3 billion in equity as well Jim because it would potentially be dilutive. But my understanding is even if this deal doesn't happen there may be a need to raise additional equity down the road. Let me just pause it. We all know that the weakness in many of these different outfits, Warner Bros. is just got real. Us at Disney is linear. Why would anyone want this property? It's a good question and it's one that actually Barry Diller seemed to raise on his conversation with the squawk gang earlier. And Diller somebody you should know was 30 years ago when he competed with Shari's father, Sumner Redstone, to buy Paramount if you recall. The purchase price ended up being some 10 billion dollars, just roughly where the market cap of this entire thing is right now, obviously not including debt. Take a listen to what Diller had to say in terms of the timing of this potential deal. First of all it's the worst time in the world to sell this thing. I mean it couldn't be, I mean it is a perfect candidate for actually turning itself around. But the idea that you want to sell it, because whoever gets in it at whatever base they get in it for, there's an enormous amount of work that's going to have to take place. There is a belief, Jim, though, that you can in fact turn it around, perhaps in a more effective way with Ellison, Skydance being a part of it. We'll see and we'll obviously be following it to the extent we can and share whatever we find in the way of these next 29-plus days. Unbelievable at anticipating the problems with these companies. I mean isn't there a charter negotiation coming up? Yes. You know Jim, it's fun. Yes, you're absolutely right. There's an important distribution negotiation coming up with charter. And by the way, I mean remember the Disney deal that they did, you have to wonder what that's going to mean for Paramount. So yes, that's not unimportant. I'm glad you raised it. Me time, guys. We'll get to some of the sell side reaction today. Bunch of downgrades, B of A, Square, David Busters, Bumble Ferrari, and of course David's exclusive with Disney's Bob Iger. When we come back. Canva presents unexplained appearances. It was an ordinary work day until that presentation appeared out of thin air. Also, it's eerily on brand. Wait, did that agenda just write itself? Words appear. Making this unexplainable case. Unexplainable? It's Canva's AI tools. I can generate slides and words in seconds. Really? The real mystery is why I'm only learning this now. Canva.com, designed for work. Take a look at a pre-market here. Got some gains trying to erase. What's been a pretty tough week, especially for the Dow. We'll get to some of the sell side calls. And of course David's exclusive with Bob Iger in the wake of Disney winning that proxy fight, the opening bell coming up. In less than four and a half minutes. Let's get to Kramer's mad dash as we wait for the opening bell. I like this conag recorder. I've been waiting for some sort of inflection where they had to put 30% increase. 30% they had to raise everything just to be able to meet all the different input costs. Well, this was the quarter where it looks like it's getting together to the point where you've got the volumes going up. And you don't really have a lot of worry about costs. So you're going to see the stock do better. Now, when you speak to the companies, really interesting. Younger people, Gen Z, whatever, they didn't like to cook. They did it, instead of a helping choice, instead of their meals being seven days a week, they cut it to five. And then they did it with, you know, scratch cooking is what Sean Conley is. It's such a great guy to see you. But scratch cooking is done, okay? They want to go back to the store and they're doing it and the behaviors are returning to the old way. It's going to be good to clear out some of those weird COVID dynamics or post COVID dynamics. Thank you. I'm going to think, but I'm thinking about focusing the top of my show tonight on how we're finally getting back to just almost everything's back to our lives. And that's why Conaglers are here when they go away. People want to spend the most money. They're bad. Supermarket. Let's get the opening goal here. It's going to be a real time exchange with a big board, Destiny Check 100 celebrating its recent listing at the NASDAQ 5.9, provider of an intelligent CX platform celebrating its 10th listing anniversary. Nice, nice breath here at the open desk. Yes, and I've got to tell you, this is one of those days where it shows you when pal speaks, everybody listens. I think pal also made it so that no matter what happens tomorrow, which, you know, I think is very consequential, because the employment never matters tremendously, you've gotten some cover here, which is good, and the cover is indeed the big tech. I do want to point out that the best court, and we don't have a lot of earnings, but Michelle Goss at Levi Strauss put together a phenomenal quarter. Now she's replaced with Chip Berg as a terrific guy, but denim is in, denim is hot. It's a denim moment, as she called it, and they are the king of denim, and you're going to see some good numbers. There was someone who came on air yesterday and recommended shorting Levi Strauss. Well, that person, I've got an invitation to that person's funeral, which again is reference to American Rascal, and I do think that this was the beginning of what could be several great quarters. They did talk about sort of a structural shift in the business to the upside. That said, Jim, people still scratching their head about beauty yesterday. Okay, I'm an infirmally a believer in Tom Kingsberg, who was such a great operator at Burlington. He leaned on LVMH. Never now, when you go to a Coles, my Coles says Coles support. And Sephora is the most loved one. LVMH owns Sephora. They can come in underneath Ulta, which typically nobody can come in underneath Ulta. It was mentioned only by transition, by Mr. Kimball. And I worry about them, is that they have met the competitive threat, and it's Coles. It's not themselves. Ulta managing to find a little leg here after a good drop in yesterday. Very good company, but Kingsbury, I've had dinner with Kingsbury, and he's a clinic. You get there and you think you got all your questions, and then you realize after seven minutes, just shut up and listen. And he's also a dynamic driven guy. But yeah, we're getting a lot of, I think, a delayed reaction to the fact that Intel, which was terrible, has to spend a lot more money on semi-cap equipment. There are a lot of people who believe that semi-cap equipment was damaged in Taiwan. The earthquake, it was almost as if people just said the first day, everything's fine. And now we're getting a reading to say with an applied materials, with a land resource. Maybe something did go wrong there. I can't tell. All I do know is that it's a tech day, and a stock that has been downward, endlessly since the GTC meeting, which is the big conference that Chancellor Mom put on, is up today. And remember, you're talking about a stock that was at 974 on March 8, and fell to the high 800s. It's been a terrible correction for Nvidia if your big Nvidia came in for the conference. If you're a long-term holder of Nvidia, you don't even notice this blip. Right. But you're right. Lamb Research, Broadcom, all positive here. I like lamb research, and I don't like lamb Western. I'm going about, I'm going anti-fries and pro-chips. This is like a long co and you're thinking yesterday. Dow's up 272. Let's get to Disney HQ, where David, of course, has a very special guest. David. Paul, thank you. Yeah, I'm here on the Disney lot, or as Mr. Iger just called it Walt's house. It's good to have you, Bob. Bob Iger, of course, CEO of Disney. Emerging victorious from Slugfest of a proxy fight. You won by substantial margins, but I do wonder, Bob, 31% of shareholders did say they would like to have pelts on the board. Do you listen in any way differently to that shareholder base? Does it make you think about the things you've done any differently? All right, you won. You won big, but 31% still said, "Hey, you know what? We'd prefer to have this guy on the board." Well, this whole process gave the board and some members of management an opportunity to engage with many shareholders, perhaps on an even deeper level, and have a good, honest, candid dialogue where we had an opportunity to describe the shareholders what our priorities are and what our various processes are, including succession. And we had an opportunity to listen to them and hear what was on their minds as well. So I think if anything came of this that's positive is that it did, in fact, increase the engagement that we've had with shareholders, and that's a very good thing. Yeah, I mean, you spent a lot of time with those shareholders over these last few weeks and months. Yes. And I wonder, was there one or two themes in particular that, as you mentioned this, that sort of helped you kind of focus more than you might have previously? Well, I think what we heard was surprisingly maybe consistent with exactly what our priorities are, maybe not surprising, by the way. Clearly, shareholders are interested in care very much about succession. It is the board's number one priority. They've been spending a significant amount of time on that. They have a succession committee that Mark Parker, our chairman, chairs, and James Gorman, who just joined our board, is on. They met seven times last year. They intend to meet even more this year. They're confident they will choose the right person at the right time, and they have some time to do that. But again, they're treating it with a sense of urgency because it is so important. Clearly, shareholders care about that, given what the company's been through these last few years. Yes. As you'd expect, they care about what ends up being our top priorities strategically. They want to know about the future of the SPN. They want to know about streaming and how that can be profitable. They care about the quality of our films, and they're very interested in growing our parks and resorts business, where we said we're going to spend $60 billion over the next 10 years. Right. Amazing consistency in terms of subject matter and a list of priorities. And all things we're going to talk about in the time to come here. But... No, but make no mistake, though. I know because you mentioned the 30 percent a few times. This was decisive in terms of how shareholders voted, as I think a true endorsement of the board and management and the direction we're taking this great company. Stock went up. The first time he had a proxy fight, the stock went up. Then it came down when Peltz went away. It went up again during this process. He seems to believe in part that he's helpful in terms of getting you guys to focus. And/or there would be those who say, "Well, an activist is helpful in getting management to focus." And actually it has a good effect on the stock price. How do you react to that argument? Well, first let's talk about the stock price. The stock is up over 40 percent since the beginning of October. There was a slight bump when he announced his interest in basically the second proxy fight. And then actually the stock drifted down after that. And then it went up when we announced there are November earnings. Yeah, I mean, he then mentioned a slate and named a slate. It drifted up slightly and then went down again. And then we had our February earnings, which were sensational, and it went up significantly. The market is reacting to how this company is performing. It was not reacting really to the activist fight. Right. And not the idea, though, that you're going to be even stronger in your communications, even more focused in terms of articulating what it is you're trying to do and/or more focused on it as a result of somebody on your back. I came back about 16, 17 months ago. And immediately established a set of, well, first of all, wanted to stabilize the company, who had been through a tough time, immediately established a set of strategic priorities with great alignment with the board, actually. And we've been executing against those priorities since early in my second tenure. And I think the results of implementing them, and we're just at the beginning in many respects, but the results are already being felt in a positive way by the company. And I think it's reflected in our performance, particularly in our November earnings and our February earnings. So if you're asking me whether this caused this to have any greater sense of urgency about those priorities or any more focused, no, absolutely not. If anything, it was distracting. It took time when we should be spending our time on those priorities. And one of the things that I feel great about right now today is, put the victory aside, that I can spend all of my time with the management team and the board on executing against those priorities. Yeah, I mean, that makes them really important. Many times, and have in other campaigns as well, it is an enormous distraction potentially for management. It takes a lot of time. I assume that was the case for you as well. It takes a lot of time. I continue to spend a lot of time on those priorities. You have to still watch the films and engage with our businesses on what their strategies are and execute against them. You can't take your eye off the ball, but another great subject or subject is introduced that does dilute your time to some extent. Yeah, you've got to travel. You've got to get in front of shareholders. You've got to spend a good amount of time just thinking about it. I mean, did it become personal for you? You know, it involved like Pearl Mutter. You and I have talked about this in the past, at this very spot, I think. There's no love loss between the two of you. Was it a personal kind of contest in some way beyond just a proxy contest? On my side, no, meaning I was supporting the interest of the company, not my personal interests, and defending what the company and the board was doing as opposed to defending myself against criticism from Nelson and the people who were backing him. If you're asking whether it's personal on their side, you probably should ask him. You probably would say no. I think there probably was, to some extent, a degree of a personal animus that was on the table here. But I didn't. He fired him. I mean, he didn't like that. Well, we closed the Marvel offices, and it did result in like leaving the company. But I'm not going to put words in his mouth at all. I had my opinions about it all, but again, we were defending the company against the criticism of Mr. Peltz in this case, and actually tried not to consider it a personal attack on me because I didn't think that was really of great benefit to Disney. No, but you're a very competitive person, and you wanted to crush them, didn't you? I wouldn't put it that way. If you're asking me whether I wanted the company to prevail, yes, because I knew exactly what was important to the company. I knew what we were doing, and I was extremely confident. I remained confident and very optimistic about what we're doing, and I just didn't think it was necessary to essentially bring Nelson Peltz on to the board in order to the board feel that, given the fact that he didn't bring any new ideas, and he wasn't going to have an impact on the company that we've deemed was going to be positive. If anything, there was a belief that it could be a distraction and end up being more destructive than productive. Well, I'm curious on that, because there had been speculation that, were he to have won a seat on the board, you might have accelerated your own departure from the company. Is that true? Well, he didn't win a seat on the board, and I am back to where I was before all this happened, which is spending 100% of my time on this company, and I'll just leave it at that. But it is instructive, though, to think about how you were thinking about things. It's important for the management team. Working very closely with the board to have the ability, that includes the time, to focus on the most important matters. And anything that occurs that takes away from that, that distracts us in some form, is a negative. And so, as I said, his presence on the board, we believe, the board believe, could be distracting, and that might have made it very, very difficult for us to do our jobs the way we feel they need to be done. Finally, on succession, which ended up being sort of, it did, especially towards the end, the real focus here, and ISS made it a focus of their decision to recommend PELTS for the board. Have you changed your approach at all? You mentioned the seven meetings. I'm just curious, is the process been accelerated in any way? What updates can you give us beyond the fact that you're focused on? Well, the board engaged in a succession process the moment I came back, and they are taking it very, very seriously. I don't think it has changed because of the activism battle at all. They established this as their number one priority. From the moment I came back, they formed a committee right away. They've been meeting regularly. They're going to meet even more regularly going forward, because I'm not going to be here forever. You are another two and a half years, though, right? Well, but I think it's really important to name the right person at the right time and to transition process that is healthy. How long do you see that transition process? I can't say. I mean, is it a year? Is it, you know, not determined? Okay. But I think it's really important to have a good transition process. You know, this is a big, complicated company, and not only is it important to choose the right person, but it's really important to give that person all the opportunity in the world to be successful in the job, and the board's very focused on who the person is, when the decision should be made, and essentially how the handover of sorts will take place. How does the failure to have done a successful transition last time inform your own actions this time? Well, look, the transition the last time around could not have happened at a worse moment for the company and in the world. COVID hit soon after Bob Chapick was named CEO. I think one of the things that I don't think has been as understood as it should have been over these last few years is what happened to this company during that period of time. It probably suffered more than most companies in the world given the fact that people were not going to the movies, people were not going to theme parks, initially live sports were not occurring. And just as important, production wasn't going on. There were no movies or television shows being produced. This company was hit very, very hard, and it handed my successor a set of challenges that were enormous in nature, and hopefully that will not be the case the next time around. I don't think that there's much more I can add in terms of the process itself or the transition. Obviously, we all have learned from the past, and we're eager for this process to be successful, not just in the choice of my successor, but ultimately how that person takes over. When you say you've learned from the past, is there anything you can share in particular about the decision? No, not really. Because it's not like you hadn't spent a lot of time with Chapick. We've talked about it. I mean, you spent a lot of time with him. Yeah, I think, look, now it's 2024 that was implemented four years ago. I said that we've learned from it. We're focused on the future and not the past at this point. I think that's also really important. If you can't do anything about what happened, you just have to make sure it doesn't happen again. We'll talk about the future now, because as we always do, let's talk about streaming, continue the long conversation we've had. I remember, I think, in fact, when you first introduced it, we did our interview. 2017, no, 2017. $16.99, I remember the price point was a long time ago, too. You cut the losses dramatically in the last quarter. You mentioned the stock moving, of course. In part, I think a lot of it moved on that idea that this business is going to be profitable and it really will be. You've been talking about it becoming a growth business. You haven't really given specifics on what your expectations are on margins. But I am curious, at this point now, you mentioned some positive things a month ago, at a Morgan Stanley Conference. What can you tell us in terms of how things are shaping up for the direct-to-consumer business, which is such an important component of investors' view of the company? It is. Maybe I can provide a little bit more specificity. First of all, we've done really well in terms of streaming in the sense that we launched Disney Plus only in 2019, so it's just over four years ago. In a very, very short period of time, we find ourselves second in Netflix in terms of global subscribers for pure streaming business. We know that we ended up losing a lot of money on that, more so than we expected initially. Part of that was because we were chasing sub-growth and not as focused as we needed to be on the bottom line. I came back. The losses were around $4 billion a year. It was clear that that was not sustainable and not acceptable. And the goal was, first, let's reduce those losses. As we've said, we're going to be profitable in our fiscal fourth quarter this year. We lost, I think, $130 some odd million in the last quarter. That's a huge, huge improvement. And we know exactly how we delivered that improvement. Now what we have to do is turn it, not just into a profitable business, into a growth business. A business that has margins that this company and our shareholders would really be proud of. Eventually, yes, double-digit margins, of course. The way to do that is actually very, very clear to us. It's very, very clear that we need more engagement in terms of consumers spending time on the platform. We just launched, which is a very compelling product, which is Hulu, on Disney Plus, that came out of beta last Friday, actually. And I can tell you that it is doing extremely well. We'll have more to say about that in our next earnings call. But we feel great about the engagement of those Disney subs who are not getting Hulu, who are now watching more programs that were on Hulu, including Shogun as, for instance, which is a great hit. So we have to increase engagement. We need the technological tools to lower churn, create more stickiness, things like recommendation engines, getting to know our customers better. We need to reduce the cost of marketing. We need to reduce the cost of customer acquisition to get the margins up, obviously. I think we have to program more smartly, particularly outside the United States, which is to pick the markets where we could really move the needle and program with really strong local programming. We've had some success there. We need more success. Password sharing is something else. In June, we'll be launching our first real foray into password sharing. You will. Just a few countries and a few markets, but then it will grow significantly with a full rollout in September. Cracking down on password sharing essentially. Yes. All of that, obviously, all the things that I mentioned are components of what will turn this business into a business that we're looking at. Well, you sound like you're describing what Netflix already is. I mean, do you ever get to a point where you can actually have margins that Netflix has? Well, I think it would be a little premature for me to say yes to that. You know, it would certainly be great if we could. We aim, as I said, for this business to be a growth business for the company with margins that our shareholders will feel good about. We know how to run businesses well, high margin businesses, parks and resorts. A great example of that is, for instance, I'm confident that we're on the right path, but we still have a lot of excellence. You want to clearly be the clear number two, though, to Netflix. I mean, you already are. You probably don't even like to hear me say number two. I know you, but that's what you are. And that wouldn't be a bad place to be. That would be fine, but I wouldn't say that's necessarily the goal, but Netflix is the gold standard in streaming. They've done a phenomenal job in a lot of different directions. I actually have very, very high regard for what they've accomplished. If we could only accomplish what they've accomplished, that would be great. I guess what I mentioned. The good news here is we know what we have to do, and look, we start with a very strong hand. Obviously, we've talked about it for years, but Pixar and Marvel and Lucasfilm and Disney the array of content that we have. The acquisition of 20th Century Fox looms large in this process because we get control of Hulu. We get significantly more content, including, you know, family guy in The Simpsons and Avatar. And I could go on on. We get great talent that came with it as well. And a global footprint that is, you know, broader and deeper in the number of markets. So I think we have the goods, and now we've got to execute. I mentioned two in part, and I think of Apple and Amazon separately. What I wonder is, do you think the other streamers can effectively compete? You know, does there need to be more scale in general? Would it help you if, in fact, there was more consolidation among some of the competitors? I don't know if it would help. I think we know what you need to be successful in streaming, and not everybody has that. And I'm not sure everybody can get it. We know that we can, given everything that I've discussed, given what, you know, obviously the content that we have, and the technology that we're building and the brands that we have. I don't think everybody does, though. I think there's got to be some consolidation in the business. You know, I want to talk about the sports joint venture, but it occurs to me, given the bundling, essentially, that you're doing there. Is there a time you could imagine a bundling of streaming products, entertainment streaming products, so that Disney Plus is bundled with Max, for example. And even with Netflix, is that a real possibility? Well, let's take a step back, because you mentioned sports. We are bundling right now with ESPN Plus, but when ESPN ultimately is launched, is what we call a flagship product, which is basically the full suite of ESPN services, there will be a great opportunity for a bundle of ESPN with Disney Plus and Hulu. Right. And a bundle that is very consumer-friendly, meaning part of. Understood, but do you ever see a day when there could be a bundle, but of competitors, in a sense, but to make it easier for the consumer in the same way that you are bundling sports with Warner Brothers Discovery and Fox? Yes. I think there are possibilities there, sure. You do. On the Sports JV. Where do we stand right now in terms of, I know there's an antitrust question. You have a new CEO for it, price hasn't been announced yet, right? No, we have an idea, but we're proceeding as though this is going to clear, basically, government scrutiny. You mentioned we hired a CEO. They're iterating in terms of what the experience will look like and feel like. And I don't know that we've announced a date yet. I can't, I just can't. I haven't talked about the fall. I think that's right. We have no more specifics on that. We feel good about it. We think it's actually a sports fans delight in terms of being able to watch all those sports in one place. And do you think there's any? Any trust issues that are being raised by potential competitors? Well, we know that some are raising the issues. Yes. We're proceeding as though we'll prevail. Price, do we have a sense there? Too soon. Yes, I do. You do. I have a sense. You're not going to say. No, it's too soon. You keep bringing up ESPN flagship. And I do wonder. And again, I know you're not going to talk price. But why, why have that anymore? If I as a sports consumer have access to this joint venture, let's say I'm paying 45 bucks, why am I going to spend another 30 on an ESPN over the top product? I don't quite understand the, what that is. Well, first of all, we haven't gotten specific about how the pricing will work. I think you have to assume that if someone is already buying the joint venture product. Right. They're not going to have to end. That will be taken into account if someone wants to buy so-called flagship. What we're trying to do is basically serve sports fans in multiple ways. If sports fans want, who are not part of current multi-channel bundles already, or were and basically canceled their subscriptions, that's certainly one way to serve them. If they're not interested in that, then they just want ESPN. And by the way, what ESPN so-called flagship service will have is, will be significantly more than what the ESPN component of the joint venture will be. If they'd like that, they'll be able to get that too. And what we're trying to do is serve sports fans in multiple ways and create real convenience too. You don't see it as a reason not to do an ESPN over the top flagship product as you describe it, which I think you've talked about potentially as soon as 2025 hitting the market. Correct. The existence of this JV. Do you have a name for this JV yet? No. If you've got any ideas, please. We have a suggestion box here. But you see them being able to exist both because we talk so often about when you would take ESPN eventually over the top. And I just, I still do find myself wondering, well, with the existence of this product, does it make it less, less of a need? The ESPN over the top again is going to have multiple features to it. There'll be fantasy sports. There'll be the opportunity to bet on sports, basically right off the app. There'll be significantly more, I'll call it consumer engagement interaction, interactive capabilities. So it's not the same thing. And again, what ESPN is trying to do is serve the sports fan in multiple ways. Are you still looking for an investor for ESPN? I mean, that was something we discussed at Sun Valley this summer. The NFL Network, is that still out there or something? We're looking for strategic partners. We don't need an investor. Sorry, strategic partner. Is that still happening? We've had ongoing discussions. You think? Nothing more to add. No, but it feels like it's gone on for a while. You think there's really a chance that something could happen? Look, I don't want to predict we're engaged in conversations. We think if we can reach the right agreement with the right partner, that it's a really worthy thing to do. I want to move on to some other news because we're already running short on time. You've settled up with Florida. Is that over and done with? Are you happy with the new arrangement there? There's still a federal case. So over and done, not completely. There's still the free speech case. But we view what we did there is really, I mentioned on our annual meeting call the other day. I guess it was yesterday. It feels like it's a month ago that we called it a win-win. This is a good thing for the state of Florida and a good thing for the Walt Disney Company. We settled the matter on a state level. And this gives us an opportunity to engage more effectively and more deeply with the oversight board, which has also been reconstituted to some extent, and make the kind of investments that we need to make in that business not only to grow our business, but to grow in terms of the state of Florida, create more jobs, more revenue for the state of Florida. It's a good thing that we do. And so we can expect no more hostilities between Governor DeSantis and the company? Well, I would hope not, but I can't speak for Governor DeSantis in that regard. You know, speaking of hostilities, I mean, I know you are aware of Elon Musk and what he's been continues to say, or at least post on his ex-platform. How do you approach that? You know, somebody who's got such a big microphone as Musk kind of coming after you all the time. I ignore it. You do. Yeah. There's no relevance to the Walt Disney Company or to me. So when he says I would, you know, buy shares if Peltz was on the board and it comes after you as being, because he's on his anti-woke campaign. People have been coming after me in the company for years and it's just, I don't get distracted by those things. But the woke thing has had more of an impact. I mean, you've said to me that you would love to be just out of the culture wars. Do you feel like you're succeeding in that? Well, I think, yes. I mean, I think the noise has sort of quieted down. I've been preaching this for a long time at the company. Before I left and since I came back, then our number one goal is to entertain. I think the term woke is thrown around rather liberally, no pun intended in that regard. I think a lot of people don't even understand really what it means. The bottom line is that infusing messaging as sort of a number one priority in our films and TV shows is not what we're up to. They need to be entertaining. And where the Disney Company can have a positive impact on the world, whether it's fostering acceptance and understanding of people of all different types. Great, but generally speaking, we need to be an entertainment first company. And I've worked really hard to do that. You have. I have. In what way? What do you mean when you say that? Engaging with our executives, engaging with the creative community, returning to our roots, making sure that everybody's aligned on what our priorities are. And understanding that, look, we're trying to reach a very, very diverse audience. And on one hand, in order to do that, the stories you tell have to really reflect the audience that you're trying to reach. But that audience, because they are so diverse, really, first and foremost, they want to be entertained. And sometimes they can't be turned off by certain things, and we just have to be more sensitive to the interest of a broad audience. It's not easy. You can't please everybody all the time. Does the prospect of a Trump presidency change your approach at all or concern you at all, given that may raise the volume yet again on this anti-wokeness kind of thing? Look, the Walt Disney Company is 100 years old. And you've worked there for more than half of them now. I have. I know that's hard to believe. It's a very special company with a mission to entertain. In a world, let's pause for a moment and understand that the world needs to be entertained today. And I don't know how many presidents have been in office since Disney was founded in 1923. I know that nine have been in office since I started in 1974. That's pretty extraordinary when you think about it. It is pretty extraordinary. It's pretty extraordinary. You're still doing this, 1970s. Richard Nixon was president when I started. It's a long time ago. Yeah, well, he was almost on his way out. You're still going to be able to-- you're good for the next two and a half years? Yeah, look, this is a great job. It doesn't seem like it's been that great a job lately. It's still a great job. And I will not lose sight of that. It's a great company and a great job. We have a lot to do. I'm excited about a lot of what we're doing. I'm optimistic that we're going to accomplish all the things that we've talked about and more. You have that confidence at this point. I do. I mean, again, we're still waiting on a lot of the things for you to deliver on. Some you already have in terms of-- Well, we've all got some dividend increases in the length. Yes, absolutely. Just look at the bottom line, delivering more than $8 billion in free cash flow this fiscal year. Almost double what we delivered last year. You mentioned the dividend buying stock back, investing the right amount of money in the right businesses, like our experiences business, which has had tremendous returns on investing capital. ESPN is a phenomenal brand. You know, a lot's been said about ESPN in terms of skepticism about its future and basically the reliance on the old business model. Yeah. Well, we talked a lot about it. It's August of '15. Friday night ESPN had a double-header women's college basketball game. The game won, which is Iowa versus LSU, which was a rematch of the championship last year. Highest-rated college basketball game ever on ESPN. Men's are women's. That game rated higher than every game of the World Series. Four of the games, the NBA finals, the Golden Globes, I could go on and on. They're very, very -- that, to me, speaks volumes about ESPN as a brand and as a business. Although it's not nearly the contributor it was to the company years ago. ESPN still has -- I know it's profitable. ESPN is still highly profitable. Their ratings have been up the last couple of years. Their operating income has been up the last couple of years. We're engaged in basically positioning ESPN well for its future, but it starts basically with a great foundation. How can you not be optimistic if you're running the Walt Disney Company? Well, I could -- I mean, my God, you've just recently with Julia, you were going through all the things that you encountered when you first came in. They didn't sound like a great list. You want me to quote you? These jobs come with, as you can imagine, a lot of challenges and a lot of complexity, but I wouldn't trade this job for any other job in the world. Maybe no job, I don't know. Yeah, well, maybe we'll get that back to that one day. Real quick, the one thing I also -- the epic announcement from last quarter and gaming. I did want to just get you to weigh in on that. I mean, how important do you see that in terms of gaming overall, given the time spent, and whether you're going to make an even larger commitment down the road? Soon after I came back, Josh DiMaro runs our experiences business and his head of games came to me with basically a demographic analysis of who was playing games and essentially what the trends have been. And I was blown away that something like 32% of screen time among young people, meaning Gen Alpha and Gen Y. Gen Z. Gen Z, I'm so old, I forget my alphabet. And they were spending as much screen time on that as watching movies and television. Obviously, when you're managing a company like this, you got to manage for operational excellence today. You have to prepare the company for the future as well. So it's foot in the present, foot in the future. Thinking about the future, if we don't engage with those demographics, then where are we? And so it seemed not just of interest, but incredibly important, vital almost, that we enter that space more aggressively, and we've been licensing and doing well, but we haven't really been investing that significantly for a long time. And so the opportunity to engage with Epic came up because they had been part of an incubator program or an accelerator program at Disney sometime back. We had a relationship with them already. A lot of Disney goods were being sold on Fortnite. And so I had a lunch with Tim Sweeney, I think in June, who founded Epic. And we started talking about what was possible. And over lunch, we kind of designed a Disney universe that could live next to Fortnite. We engaged immediately after that negotiation and announced something in November, which we're really excited about, including an equity investment modest in Epic. And look, could it expand that possibly right now our goal is create the universe that's going to live next to Fortnite, make sure that's successful? And if it is, and hopefully it will be, then look to see where we can invest further beyond that. Bob, we're out of time, but I look forward to future conversations. Nice to see you, David. Nice to see you as well, and thank you for having us. Pleasure. Bob Iger, the CEO of Disney. You've been listening to the opening hour of CNBC's Squawk on the Street. All opinions expressed by the Squawk on the Street participants are solely their opinions and do not reflect the opinions of CNBC, NBC, Universal, or their parent company or affiliates. And may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information, Squawk on the Street participants consider reliable. But neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Squawk on the Street disclaimer, please visit cnbc.com/squawkonthestreetdisclaimer. 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