Disney CEO Bob Iger and CFO Christine McCarthy took on a range of topics during the company’s second-quarter earnings conference call with Wall Street analysts Wednesday after the company reported strong results.
Among the notable takeaways from the call were Iger asserting a cautious approach to Hulu — of which Disney now controls two-thirds — and a warning about the steep costs associated with the otherwise boffo Avengers: Endgame.
While Endgame‘s rousing success — already No. 2 all-time and possibly headed for the top spot soon — was a recurring theme on the call, McCarthy noted it didn’t come cheap.
“Given the size of the cast involved … and the cost required to produce a film of that scale and magnitude and length, while we expect the results from this film to be terrific, they will be hampered somewhat by the cost structure,” she said.
Neither she nor Iger offered any projections in terms of the ultimate profit margin for Endgame, and McCarthy noted that she had issued a similar caveat for those tallying up Infinity War‘s impact on the balance sheet. The previous Avengers outing, Infinity War, racked up $500 million in profit, sources have said.
In the wake of Endgame‘s ending, many film buffs and comic-book fans have been wondering what’s next for the Marvel Cinematic Universe now that the 22-installment Avengers-centric narrative has run its course after a bit more than a decade. Iger noted plans across Disney+ streaming, television and future feature development.
“When we bought Marvel, we started studying their characters and when we got to about 8,000, we stopped,” Iger said. “There are many, many different directions that we could go. We’ve obviously laid a lot of pipe in terms of character and story.”
Hulu, meanwhile, became even more Disney-fied last month when Disney bought out WarnerMedia’s 10% interest. Asked if international expansion or other changes to the loss-making service will be possible so long as Comcast remains a 33% minority partner, Iger expressed some caution. “Any big decisions that are made in terms of investment or expansion would have to be done with their cooperation,” he said. “We both probably share a bullish outlook on Hulu, but we can’t do it on our own.”
As to the Fox deal, which closed in mid-March, Iger said it has quickly proved a tonic. “The further we get into the integration process, the more impressed we are with the value of the assets, the quality of the talent and the opportunities that we’re able to create,” Iger said.
One item that did not come up during the Q&A period with analysts was Iger was the just-completed sale of the formerly Fox-owned regional sports networks to a Sinclair Broadcast Group-led circle of investors. The valuation of the portfolio — including a separate sale of YES to the New York Yankees, Amazon and Sinclair — came to about $14 billion, a bit short of the low end of most analysts’ expectations.