Crisis Management and Investor Confidence at Disney

Louisa Lally

Welcome back to The Annual Report Podcast brought to you by Flint Digital and created using AI. The idea behind our pod is to give you the listener an alternative way of understanding key reporting themes often buried deep within the hundreds of pages that make up a typical annual report today. I’m Louisa Lally, joined as always by my co-host Peter Kemp. And Peter, today’s episode has...erm...well, it’s picked itself really, hasn’t it? The whole Jimmy Kimmel thing thrust Disney into the headlines lately, and you can’t escape the sense that their 2024 annual report, published well before the upheaval, gives us a kind of snapshot—like a 'calm before the storm' moment. Anyway, let’s look at their financials first. Disney’s 2024 numbers—they’re big: $91.4 billion in total revenues, which is up 3% from the previous year. But the real head-turner is that net income has more than doubled, up from $2.4 billion to $5.0 billion. That isn’t a fluke, is it?

Peter Kemp

Hello again Louisa, you're right, it isn't. Disney's report is like looking at a freshly painted ship before it sails into the media equivalent of the Bermuda Triangle. If we break down those numbers a bit—segment-wise, it’s fascinating. Entertainment still leads, with $41.2 billion in revenue, but it only grew marginally, about 1%. Sports, largely ESPN, came in at $17.6 billion, up 3%. Now, Experiences—which is their parks, cruises, resorts—that shot up 5%, to $34.2 billion. I mean, that’s resilience, considering the continued global wobbliness in travel and, frankly, the massive competition for people’s attention and money these days.

Louisa Lally

Yeah, and the Experiences segment is still the star performer when you look at operating income. I had a closer look at their parks, especially the international side. Profits at international parks jumped 23%—and I know your family visited Disneyland Paris recently. Did they feel that buzz? Because on paper, the international Experiences side delivered 13% revenue growth on the year, which is quite something when, you know, the world’s still getting over the travel hangover from Covid.

Peter Kemp

Yes, they did - great fun apparently! The ongoing expansion there is a tangible example of that resilience: people showed up, even with all the uncertainties in Europe. It’s clear that Disney’s ‘Experiences’ business isn’t just about nostalgia anymore; it’s a global engine. And 13% growth—right, it’s not trivial revenue, either. Just walking around, you realise how much they’ve invested: new rides, tie-ins with streaming releases, the whole lot. The place is humming, but humming at, erm, Disney prices! People are clearly willing to pay though.

Louisa Lally

Completely! And it was the direct-to-consumer piece that really caught my attention. Disney+ hit 123 million paid subscribers, and Hulu’s at 52 million, both up from last year. And that’s on the back of a 14% bump in subscription fees—so not just more people, but higher yields per subscriber. That helped boost Entertainment’s operating income. But, it’s worth noting—sports programming costs are still rising, especially with those cricket rights at Hotstar and all the live events. So there’s pressure there. But, all in, Disney squeezed out higher income almost across the board, especially in segments where people thought they might plateau post-pandemic.

Peter Kemp

Exactly. And I’ll just say, while we’re focused on the bigness—the magic castle, so to speak—Disney has had to be nimble. Cost control, streaming content tweaks, even strategic content removals, all to shore up profitability. So these numbers, they tell a story of a company adapting on multiple fronts to keep that 'happiest place on earth' sheen going for shareholders.

Peter Kemp

All this positivity in the numbers happened before Kimmel-gate, if we can call it that. In the Risk Factors section—Item 1A—they’re not shy about reputational threats. ‘Damage to our reputation or brands’ is just there, plain as day. But they go further: generative AI, labour disruptions, changing consumer tastes...it reads like a checklist of 'what could possibly go wrong.' And yet, most readers glaze over that bit, don’t they?

Louisa Lally

They do, and it’s a shame, because for investor relations, the risk section is actually the bit that tries to predict the headlines. And if you read it with the benefit of hindsight, it’s uncanny. Disney called out not just the abstract—‘brand damage’—but gave specifics: potential amplification by social media, PR crises, and the impact of rapid-fire content distribution gone wrong. The Kimmel incident seemed to validate all those concerns in real time. And it’s not just reputational fluff: disclosure goes deep into new technology risks, like AI, but also workforce issues, union strikes—again, all things they’ve genuinely experienced in the past year or two.

Peter Kemp

Yup, and on governance, they’re very transparent about who’s running the show—Robert Iger, for one, is back as CEO, and you’ve got a refreshed C-suite with appointments in finance, legal, HR, and comms. The narrative is, ‘We are supremely overseen; everything’s above board.’ There’s emphasis on independence at board level and audit committee oversight, including specific mention of cybersecurity, which... as we saw, was tested with a breach in 2024. Is it all box-ticking? Maybe not. The fact they detail those controls in the annual report, before a crisis, is a marker for investors. But here’s a question for you: does stating the risks actually prepare investors for the storm, or just protect Disney legally?

Louisa Lally

I love that debate, Peter, and, honestly, it’s something you see across all listed companies—how to write risk so it’s a living document, not just boilerplate. My view is, yes, you do have to adapt and update disclosures after actual events, otherwise you’re not genuinely transparent. But you’re right that there’s a defensive aspect, too: it’s about managing the unpredictable, setting expectations, and—if needed—giving the board air cover if things go very pear-shaped.

Peter Kemp

Yup, and, er, that hedging language in the risk section—it’s there for a reason, isn’t it? ‘May,’ ‘could,’ ‘might’... Suddenly, the unthinkable feels less like an anomaly and more like an inevitable—with all the right footnotes in place.

Louisa Lally

Which brings us to how Disney’s pre-crisis disclosures held up once the crisis actually hit. The annual report does touch on communications—mentioning regulation, legal proceedings, and the responsibilities of their comms and risk committees. But when you’re in the thick of a high-profile media debacle, you realise how quickly the language in those reports starts to feel either prescient or, frankly, inadequate. Disney explicitly warns about social media ‘amplification’ and 'volatility in share price' due to sudden events. In practice, though, we saw their IR team have to go well beyond the playbook for crisis response after the Kimmel story broke. It’s a real stress-test for what board oversight and ‘internal control’ really mean under the spotlight.

Peter Kemp

I think that’s spot on, Louisa. There’s a sort of duality in these reports—they’re both shield and sword. Shield, in that they hedge for all sorts of legal risk; sword, in that they commit to ‘transparency’ and ‘rapid response.’ But, let’s be honest, do those candid warnings about volatility and social media actually instill confidence? Or do they just set up the expectation that, ‘Hey, storms are coming, be ready to hold on’? After years in corporate comms, I’d argue it’s a bit of both. When the crisis does hit, though, what’s remembered is the authenticity and speed of the response, not the fine print.

Louisa Lally

Exactly, and we’ve seen before with Disney—think of earlier data breaches, or public controversies around casting or park policies—they’ve had to pivot quickly. The best IR responses I’ve seen, whether at Disney or elsewhere, are the ones that are prepared but also honest about uncertainty. They acknowledge the bumps, offer clarity of leadership, and prioritise two-way dialogue with both media and investors. It’s textbook investor relations, but only a handful of companies actually deliver it well under real pressure. Disney’s ability to steady the ship while explaining the storm makes all the difference to shareholder confidence—especially in the short-term price swings.

Peter Kemp

Absolutely. Governance and communication are only as strong as your last crisis. Disney’s annual report, for all its assurances, is only part of the narrative. What's interesting is seeing how those pre-crisis statements either reinforced or undermined trust when the real-life headlines hit. That’s the ultimate test, isn’t it?

Louisa Lally

Couldn’t agree more. Well, that’s probably a good place to wrap up for today. Crisis management and investor confidence aren’t just lines in a document—they’re lived, moment by moment, in both the headlines and the boardroom.

Peter Kemp

Thanks Louisa and thanks to everyone for listening—and don’t worry, we’ll keep reading the fine print so you don’t have to! But if you do want to read Disney's 2024 annual report in full, it's available to download at the walt disney company dot com.