Disney’s Kimmel Problem is Far From Over

The days of Hakuna Matata may be long past.

Two weeks after taking “Jimmy Kimmel Live” off the air and a week after bringing it back, the House of Mouse remains in a Whole New World of trouble — with threats coming from all sides. And restoring peace to the Magic Kingdom may be the biggest challenge in lame-duck CEO Bob Iger’s entire Disney career.

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In a divided America, it’s almost impossible to make everyone happy — and seemingly easy to make everyone mad. While Federal Communications Commission Chairman Brendan Carr has somewhat walked back his anti-Kimmel rhetoric since the comedian’s reinstatement, POTUS said in a Truth Social post that the government still might “test ABC on this.” Meanwhile, major ABC affiliate owners NextStar and Sinclair said Friday that they would bring Kimmel back to their airwaves after multiple days of refusing to carry the show.

Nexstar said it’s committed “to protecting the First Amendment while producing and airing local and national news that is fact-based and unbiased” and that government officials hadn’t influenced its decisions.

At the network level, Disney’s (ultimately brief) Kimmel cancellation prompted a wave of streaming-subscription cancellations from fans. It’s somewhat ill-timed for Disney, both because it has committed to another quarter of reporting streaming subscriptions and because the protest coincided with increases in its monthly subscription prices last week. Worse, the fiasco has triggered a legal threat from major Disney shareholders, who claim Iger and his C-suite may have breached their fiduciary duties by caving to political pressure when they sidelined Kimmel. 

All in all, the entire crisis has some analysts wondering if it’s time for Disney to get out of the linear TV game entirely:

• In an appearance on CNBC’s Fast Money last week, analyst Rich Greenfeld of LightShed Partners said Disney should spin off both ABC and ESPN, with the move likely to happen after Iger’s planned retirement at the end of 2026.
• In a note to clients last week, analysts at brokerage firm Needham suggested that Disney should shut down (rather than spin off or sell) ABC and move all its content to streaming. That would remove Disney content from public airwaves and away from FCC regulatory oversight (Carr has, however, floated expanding the agency’s regulatory power to digital channels).

Model Behavior: By jettisoning its linear TV business, Disney would be following in the footsteps of Warner Bros. Discovery and NBCUniversal, which have both started to move on from the old media world. Meanwhile, in its pursuit of WBD, the new-look Paramount-Skydance may take a page from the Disney playbook. On Friday, Puck reported that Paramount intends to keep WBD’s film and TV studios intact and relatively independent following any acquisition, similar to Disney’s approach after acquiring Pixar, LucasFilm, Marvel Studios, 20th Century Studios and FX. Iger may be on the way out (allegedly), but he still knows a thing or two about running a Hollywood empire.