Bob Iger's return to Disney (DIS) is one of Yahoo Finance's top stories of 2023. Since reclaiming the helm as CEO, Iger cut costs and restructured the business into three divisions —Entertainment; Parks, Experiences and Products; and ESPN —as he looks to make Disney's streaming business profitable.

Needham & Co. Senior Media & Internet Analyst Laura Martin, who covered the stock during Iger's first tenure as CEO, said she would give the media executive a 'C' for his first year back at Disney.

“It's hard to see him stumble in the first year… but in fairness to him, mostly what he's been doing is reversing things Bob Chapek did the prior two years,” Martin told Yahoo Finance Live. “It’s unclear he's been able to move forward at all rather than undoing the one bad decision he made in leadership, which was to hand the reins to Bob Chapek.”

Watch the video above to hear Martin discuss Iger's return, Peltz's battle for the board, and what the company could do to change her 'hold' rating on the stock.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

- And Laura, a near-term issues seems to be all of these activist battles. How should Bob Iger approach handling someone like Nelson Peltz, and perhaps others.

LAURA MARTIN: So I think what's great for public shareholders about somebody like Nelson Peltz is when Bob Iger comes out and says, we're going to spend $60 billion on the theme park over 10 years, that might be great for him. But public shareholders care about this year and next year because they're going to be retired in 10 years.

So I think what Nelson Peltz forces Bob Iger to do is justify the cost structure at the entertainment assets and the TV assets, compared to the revenue growth, which is single digits to negative. And it really forces him to cut costs. I think it's a primary reason they're going to cut a lot of content costs on the streaming side because they can't cut them on the sports side because their rights fees keep going up.

So I think what Nelson Peltz does is force Bob Iger to, basically, fire more people, which unless he can grow the revenue faster on the, let's call it the core business, the traditional business, he needs to cut the overhead here.

SEANA SMITH: So Laura, it sounds like, if I'm hearing you right, you think that maybe some of the changes that would be enacted by Nelson Peltz would actually better position Disney then for the future, and maybe make you a little bit more positive on the name.

LAURA MARTIN: I would say that Nelson Peltz is far more short-term oriented than Bob Iger who's a business builder. And I think public shareholders are more aligned with that kind of time frame.

BRAD SMITH: So with that considered, Laura, I mean, we've heard Disney talking about the thousands of acres of land that they could develop on, building out more of the parks, resorts experiences in other parts of the world. That still looks like money going out the door. So at what point do you think Disney is ultimately going to be able to deliver on this, and perhaps satisfy some of the investors?

LAURA MARTIN: So I think this is a tale of two cities right now, meaning that the parks are really healthy. So I think Wall Street is supportive of investing money in the parks because the return on capital of money into the parks is going to be positive. But I do think the traditional, like ESPN linear business and the studios have had underwhelming results, meaning, when the market's giving them capital, they're not actually over delivering the cost of capital.

So in order to do that, you have to cut costs. So I just think that the economics of the streaming/linear TV business are broken right now for the whole industry, not just for the Walt Disney Company, for the whole industry. So the industry needs to consolidate. It needs to rip out costs. It needs to spend less on content. And I think getting out of India is going to help Disney. They've announced that reliance. And Disney are in, I guess, a handshake deal right now. I think that's helpful. And I think, when they launch ESPN, the app, that's going to be helpful also.