Bob Iger talks up “Star Wars” franchise & “Frozen” sequel at Disney’s annual shareholders meeting

Leo N. Holzer

10 years ago

When Chairman and CEO Robert A. Iger took the stage Thursday
at The Walt Disney Company's annual shareholders meeting in San
Francisco, he was surrounded by smiling faces – from
the toe-tapping, grinning Mickey Mouse on his new iWatch to nearly all of the 800-plus
people gathered at The Palace of Fine Arts.

Iger said the iWatch "is going to be in the market real soon
and I just have the idea that it's going to be a big hit. I have an original
Mickey Mouse watch from the 1930s and I usually wear it on special occasions
like this. I just love its link to Disney's heritage and the watch is a prized
possession.

"But," he continued, "the symbolism of Mickey Mouse on this
new device just spoke to me. … The original watch reminds me where Disney
comes from and I think this one surely reminds me of where Disney is going. It
just seemed fitting to wear it here in San Francisco
where creativity and innovation intersect and actually change the world."

Following his praise of the Bay Area, Iger reported Disney's
fourth straight year of record results, assuring shareholders and Disney fans
that there were plenty of reasons for the cheerful mood as he recapped
highlights of the past year and offered a very optimistic projection for the
future growth and earnings.

Disney revealed more details about its plans for the "Star
Wars" franchise and announced a sequel to the studio's box-office animated
juggernaut "Frozen," featuring a story idea by its directors, Jennifer Lee and
Chris Buck.

"Driven by extraordinary creativity, innovative technology
and global expansion, 2014 was in fact the biggest, best year in our history," Iger
said. "Our revenue was up 8 percent to $48.8 billion, our net income was up 22
percent to $7.5 billion, and our earnings per-share was up 26 percent to and $4.26.

"Total shareholder return for the year was 38 percent – almost
double the 20 percent return delivered by the S&P 500 during the same
period – and we also paid our 59th straight year of dividends, increasing the
dividend per share by 34 percent."

He recounted a few recent highlights:

Disney's Studio Entertainment division found gold in the
silver screen. With some of 2014's biggest movies, "Guardians of the Galaxy," "Big
Hero 6" and others, the company surpassed $4 billion in global box office for
the second year in a row.

"You know that animation is incredibly important to this
company and that it has always been the very heart and soul of Disney," Iger
said. "Throughout Disney's history our most successful time as a company has
been when our animation is strong and thriving and that's certainly the case
today. The Walt Disney Company is once again home to some of the best animation
in the world with the box office and awards to prove it."

With nearly $1.3 billion in global box office, "Frozen" is
the most successful animated movie in history. Disney's second- and third-most
successful animated movies are "The Lion King" and "Big Hero 6."

And, Iger proudly noted the studio recently became the first
to win Oscars the same year for Best Animated Feature, "Big Hero 6," and Best
Animated Short, "Feast."

More guests visited Disney's parks and resorts than ever
before. The historic expansion of Fantasyland at Walt Disney World was recently
completed as well as the roll out of My Magic Plus. "So far more than 10
millions guests have used our Magic Bands," Iger said, "and we're getting rave
reviews."

ESPN continued to reign as the "No. 1 sports brand." The
college football playoff coverage "is a perfect example of ESPN at the top of
its game," Iger said, "and the 'Megacast' gave fans unprecedented access to the
action, offering more than a dozen different ways to watch their teams battle
it out on air, online and on just about every mobile device you can imagine.

"For the final, more than 33 million fans tuned in to see Ohio
State beat Oregon
for the National Championship – the largest single audience in the history of
cable television," he added. "No one but ESPN could do something so big, so
well."

ABC launched its "best season in recent memory and 'Good
Morning America' completed another year as the No. 1 morning show." Iger said
the network is "thriving with compelling programming that sets it apart,
especially when it comes to reflecting the rich diversity of the world around
us. … Thanks to the winning combination of inclusion and quality, ABC is the
only network to grow its audience this season."

Iger also reported that "11 separate franchises at Disney
Consumer Products generated more than $1 billion each in global annual sales."

Disney Interactive achieved its first year of profitability.

And, Disney's stock price continues to climb.

Iger noted Thursday morning that shares were trading above $105,
compared to about $80 a year ago, giving the company a market cap of just about
$180 billion – around $40 billion higher than it was at the 2014 shareholder
meeting.

Disney is "consistently recognized as one of the world's
most admired companies, respected for our product and our people, as well as
our performance."

Iger noted that several thousand former servicemen and women
have joined the Walt Disney family in the past few years as part of an
initiative to hire more veterans. "The vets at Disney are in good company
because they're among our 180,000 cast members and employees around the world
who work tirelessly to tell great stories and create magic in the lives of
people everyday," he said.

Iger also paid tribute to San Francisco
as "a great Disney city," home to The Walt Disney Family Museum, KGO TV, some
Disney Stores, Pixar "right across the bay in Emeryville. … And LucasFilm is
right across the street. So the Force is definitely with us."

That opened the door for him to talk about "Star Wars." Disney
is moving quickly to reap the benefits of its $4 billion purchase of Lucasfilm
in 2012.

"Star Wars: Episode VII, The Force Awakens," directed by J.J.
Abrams and featuring original cast members Harrison Ford, Carrie Fisher and
Mark Hamill, opens Dec. 18. After unveiling some news footage featuring Stephen
Colbert and others reacting to the release of the teaser trailer, along with
bits of some fan parodies, Iger said the teaser for Episode VII has been "viewed
more than 150 million times and … that response is unbelievable."

He then talked about the future for the franchise, sharing a
piece of concept art for the first standalone Star Wars movie, "Rogue One," from
a script being penned by Chris Weitz ("Cinderella") and based on an idea by
Oscar-winning visual effects supervisor John Knoll. "Rogue One" will be
directed by Gareth Edwards and star Felicity Jones. Filming begins this summer
in London and the movie will open Dec. 16, 2016.

Iger also announced that Rian Johnson will write and direct "Star
Wars: Episode VIII," which will hit theaters on May 26, 2017, but offered no other details.

"So, between now and 2017, we're going to bring three Star
Wars films to the world," Iger said. "It's obviously an incredibly exciting
time for our company, but not just because of (Lucasfilm). We have so much to
look forward to.

" … Our studio has been setting the bar pretty high these
days, too. And it only goes up from here. This is a huge year and 'Star Wars: The
Force Awakens' is just one of the fantastic movies on our slate for 2015.

"Let's start with Marvel. Obviously, an incredible success
story since joining Disney. The studio goes from strength to strength to
strength. In fact, the five Marvel movies we've released so far have averaged
almost $1 billion each in global box office and we're planning to release 11
more Marvel films in the next four years."

This year's Marvel's offerings include the second film
pairing Iron Man, Captain America,
Thor and The Incredible Hulk in "Avengers: Age of Ultron" on May 1. "Ant-Man," starring
Paul Rudd, will hit multiplexes on July 17. Iger also mentioned the recent deal
with Sony that allows Disney to bring the iconic web-slinger Spider-Man back to
the Marvel cinematic universe but offered no details as to how and when that
might happen.

He said the company has high hopes for its live-action "Cinderella,"
which is already charming critics and delighting audiences. Iger also promoted
the May 22 release of "Tomorrowland," helmed by "The Incredibles" director Brad
Bird, a member of the Pixar brain trust, and starring George Clooney in his
first Disney film.

And expect another great year for animation.

"When Pixar joined Disney in 2006, we were hoping to spark a
creative resurgence in animation across the company and, looking at our recent
stream of successes, I think we can actually say that it worked," Iger said. "Pixar
has always been home to some of the most original and innovative stories in
animation and we're thrilled to share two new Pixar films with the world this
year."

"Inside Out," directed by Pete Docter, will be released on
June 18. "The Good Dinosaur," directed by Pete Sohn and based on a story by Bob
Peterson, will follow on Nov. 18.

"Last summer, I celebrated my 40th anniversary with the
company and I can honestly say that I've never been prouder to be part of
Disney nor have I even been more optimistic about the future of The Walt Disney
Company," Iger said.

Look forward to these things:

The 60th anniversary of Disneyland
kicks off with a celebration beginning in May.

The fourth D23 Expo, for the ultimate Disney fans, will be
held Aug. 14-16 in Anaheim.

An "Avatar"-themed land at Disney's Animal Kingdom will open
in 2017. An artist's concept drawing shows a Jungle Cruise-like trip through
the panoramas of Pandora. Iger said, "If you thought Pandora looked magical in
the movie, just wait until you see Pandora in person."

Guests to Hong Kong Disneyland be getting the first true
Marvel-themed attraction when The Iron Man Experience opens next year.

And, Iger also indicated "there's growing excitement about
the Shanghai Disney Resort. This is the largest investment we've ever made
outside of the United States
and it well may be the single most creatively ambitious project that we've ever
attempted. … We're going to wrap up major construction by the end of this
year and we're already planning a spectacular grand opening celebration for the
spring of the next year."

After this, the meeting moved to the business at hand, which
included the election of 10 members of the Board of Directors; hiring
PricewaterhouseCooper LLP as the company's independent accountants for the
fiscal year ending Oct. 3, 2015;
and approving an advisory resolution regarding executive compensation.

A majority of the shareholders voting by proxy followed the
recommendations of the Board and rejected two proposals by shareholders: The
first would have separated the CEO and chairman roles after Iger steps down. The
second would have limited accelerated executive pay.

Of the 1,694,975,006 common shares of Disney stock, 87
percent (representing 1,468,276,676 common shares) had voted by proxy on or
before Jan. 12 It seems few people wanted to do anything that might throw a
monkeywrench into Disney's engine. The company is operating on all cylinders
with lots of fuel to propel it into the future.

After the quick business session, Iger opened the floor to
questions from shareholders for more than 50 minutes.

In response to a young boy named Gideon, there was an
apparent tip-of-the-hand confirmation that Disney Hollywood Studios would soon
be getting a new name, but Iger learned the company was not ready to reveal it.

After a pediatric nurse and a doctor praised Disney for its
stance limiting smoking in most films marketed to children but reporting that
Marvel's films haven't had the same compliance rate, Iger declared that the
company will "absolutely prohibit" depictions of tobacco use "across the board:
Marvel, Lucas, Pixar and Disney" in all films rated PG-13 and under.

Sorry, that means no more cigars for the character of Tony
Stark in the "Avengers" and "Iron Man" movies. The only exception, Iger
pledged, will be in films which involve historical figures known for smoking.

Responding to a Disneyland cast
member who relayed that his wife has been working as a custodian at the resort
for four years but still isn't making $10 an hour, Iger said the company has
already agreed to raise its minimum wage to $10 an hour by 2016.

Some of the other questions are responses:

Despite being "blown away" by the success of a recent
graphic novel series featuring Dreamfinder and Figment from Florida's Journey
into Imagination, Iger said there's currently no plans to bring the characters
back to Epcot.

Answering one man's questions, Iger relayed that his favorite attraction
is Disneyland's Pirates of the Caribbean. He also indicated that
there's room for growth at both Disneyland and Disney California
Adventure and no plans to add a third gate to the Anaheim Resort anytime
soon.

And Disney's new Chief Operations Officer Thomas Staggs
came to Iger's rescue when Brooke, a six-year-old girl asked who was the
first princess aboard a Disney Cruise Line ship. Staggs told the girl:
"We couldn't chose just one, but Cinderella was certainly there."

After the meeting, I talked to Kathleen Eddy of Elk Grove
and Steve Segal, both attending their first Disney shareholder event.

"I was very impressed with Bob Iger and how he handled all
of the questions, especially those on major issues," Eddy said. "I also enjoyed
seeing John Lasseter in person. He just seems like the nicest, most interesting
person. 'Frozen Fever' was great fun and it was good to hear that 'Frozen 2' is
in the works. I want to see how the standalone Star Wars film comes together,
but I'm intrigued by it."

"One of the best things about it was meeting all these other
like-minded Disney fans in line," she added. "I talked with some of the nicest
people."

"It was more or less what I expected," said Segal, an
animator who worked on the landmark "Toy Story" and now teaches animation at a
college in San Francisco. "I don't
know that I'd come from Utah for
a shareholders meeting in San Francisco,
but I enjoyed myself.

"I thought Bob Iger was very smooth on his feet and he did a
great job responding to questions from the audience," he continued. "But I also
thought the guy seeking approval for the shareholder initiative on the
separation of CEO and Chairman made a good case and I would have liked to learn
more why Iger and the Board opposed it."

Segal was also "excited to learn that the 'Avatar'-themed
land was going to become part of Animal Kingdom because that park could use a
little more fantasy."

As for the questions from the children, Segal said, "I
thought the kids were great, but Disney is a kid-friendly company if there was
ever was one."