The network pulled the show after the Federal Communications Commission chair threatened regulatory action after the host's comments about Charlie Kirk's death.
Disney management has a fiduciary responsibility they cannot ignore.
Sorry, but this is a complete misunderstanding of how this works.
Recognizing that pulling Kimmel’s show would result in severe harm to the brand, short term and long term, matches that responsibility as well. Shareholders can even make the decision to claim the board (and specifically Iger) were in violation of their duties with this decision. The blowback was obvious and expected.
There has literally never been a case where defending free speech or any other ethical/moral position in the face of imminent business contract impact has successfully been used to defend against a breach of fiduciary responsibility claim.
You are talking about an imminent threat of action from extremely powerful business partners vs a nebulous argument towards the impact of moral decision making on profitability. Quite the contrary, there is a huge body of evidence that shows behaving immorally is often the most profitable behavior.
Brand damage from taking a show off the air for a week is far easier to undo than the fallout from two major affiliates cancelling their contracts for your entire network.
Sorry, I know what point you’re trying to make, and you are theoretically correct but because it’s completely unprovable with no precedent you are practically incorrect.
vs a nebulous argument towards the impact of moral decision making on profitability.
No, its that vs the clearly expected consumer response, which has a permanent brand impact and a short term subscriber/vacationer/etc impact, not to mention the 2% drop in stocks (an over $4b impact).
Ignoring ethics, this was a bad business decision. The long term impact is obviously not yet known, but the short term impact was rapid and strong.
It’s not a zero sum game. Once the FCC chair did what he did and the affiliate networks made their desires known, there were only two choices: gamble on the brand sentiment impact of pulling the show for an unknown amount of time (which we know now was short) or gamble by playing chicken with the affiliate networks and FCC chair.
As sad as it is to say, we have a lot of data about this: brand image problems are almost always transient while fights with corporate partners and regulators have drastic long term impact.
I abhor the fact that it’s true, but c’mon, it’s pretty clear what someone’s choice would be in that situation if they’re prioritizing shareholder value. Which, again, they are required to by law.
EDIT: I want to be clear here… You are talking as if “people get pissed but we bring it back a week later and then everyone moves on” wasn’t the best possible outcome for them given the circumstances. I think it was, and that was calculated.
Nexstar, it should be noted, has a $6 billion-plus deal pending before the FCC to acquire Tegna, an agreement that would make it by far the largest owner of local TV stations in the country. Sinclair has also expressed a desire to pursue M&A, which would also require FCC approval
So the only fight Disney would have is with the FCC chair and an act so blatantly in violation of the constitution republicans commented on it, or immediate damage to the brand.
EDIT: I want to be clear here… You are talking as if “people get pissed but we bring it back a week later and then everyone moves on” wasn’t the best possible outcome for them given the circumstances. I think it was, and that was calculated.
Everyone has not moved on though.
People canceled subscriptions, many have been commenting they aren’t going back.
You are assuming it was calculated, but from early reports a lot of the executive suite was angry about the quick decision that was made, and how it would be damaging to Disney long term.
This is all hypotheticals now, so I’m not going to do some back and forth on guesswork. But to suggest that it was an issue of fiduciary duty - no, that was not the only choice based on financial impact. The brand is damaged. Subscriptions were on a rise and went into a freefall. Resorts saw a massive amount of cancelations, which will severely impact park revenue as well.
I stand by what I said - that was a severe misunderstanding or misstatement regarding fiduciary duties.
Sorry, but this is a complete misunderstanding of how this works.
Recognizing that pulling Kimmel’s show would result in severe harm to the brand, short term and long term, matches that responsibility as well. Shareholders can even make the decision to claim the board (and specifically Iger) were in violation of their duties with this decision. The blowback was obvious and expected.
They absolutely are at fault.
There has literally never been a case where defending free speech or any other ethical/moral position in the face of imminent business contract impact has successfully been used to defend against a breach of fiduciary responsibility claim.
You are talking about an imminent threat of action from extremely powerful business partners vs a nebulous argument towards the impact of moral decision making on profitability. Quite the contrary, there is a huge body of evidence that shows behaving immorally is often the most profitable behavior.
Brand damage from taking a show off the air for a week is far easier to undo than the fallout from two major affiliates cancelling their contracts for your entire network.
Sorry, I know what point you’re trying to make, and you are theoretically correct but because it’s completely unprovable with no precedent you are practically incorrect.
No, its that vs the clearly expected consumer response, which has a permanent brand impact and a short term subscriber/vacationer/etc impact, not to mention the 2% drop in stocks (an over $4b impact).
Ignoring ethics, this was a bad business decision. The long term impact is obviously not yet known, but the short term impact was rapid and strong.
It’s not a zero sum game. Once the FCC chair did what he did and the affiliate networks made their desires known, there were only two choices: gamble on the brand sentiment impact of pulling the show for an unknown amount of time (which we know now was short) or gamble by playing chicken with the affiliate networks and FCC chair.
As sad as it is to say, we have a lot of data about this: brand image problems are almost always transient while fights with corporate partners and regulators have drastic long term impact.
I abhor the fact that it’s true, but c’mon, it’s pretty clear what someone’s choice would be in that situation if they’re prioritizing shareholder value. Which, again, they are required to by law.
EDIT: I want to be clear here… You are talking as if “people get pissed but we bring it back a week later and then everyone moves on” wasn’t the best possible outcome for them given the circumstances. I think it was, and that was calculated.
Sinclair was going to do what Sinclair was going to do regardless:
https://www.hollywoodreporter.com/business/business-news/sinclair-preempt-jimmy-kimmel-live-return-abc-1236377475/
I’ll pull one key part of that article:
So the only fight Disney would have is with the FCC chair and an act so blatantly in violation of the constitution republicans commented on it, or immediate damage to the brand.
Everyone has not moved on though.
People canceled subscriptions, many have been commenting they aren’t going back.
You are assuming it was calculated, but from early reports a lot of the executive suite was angry about the quick decision that was made, and how it would be damaging to Disney long term.
This is all hypotheticals now, so I’m not going to do some back and forth on guesswork. But to suggest that it was an issue of fiduciary duty - no, that was not the only choice based on financial impact. The brand is damaged. Subscriptions were on a rise and went into a freefall. Resorts saw a massive amount of cancelations, which will severely impact park revenue as well.
I stand by what I said - that was a severe misunderstanding or misstatement regarding fiduciary duties.