Corporate Governance

HAASS: So let’s start actually with the 800-pound gorilla, which is the big thing, the acquisition of 21st Century Fox. Given what Blair said, given how stunningly well you’ve done, how well you’re doing, why would—what compels you to then take on a whole new challenge and then—and potentially, like all challenges, a whole new set of risks? IGER: Well, it starts with the fact that I’m paid to run the Walt Disney Company. And one of the primary responsibilities is to continue to deliver increasing value to shareholders. And to accomplish that, you have to focus pretty heavily on what’s going on in the environment, meaning the business but also the world. And we’ve undergone—our businesses have undergone, like many businesses, transformative change. And it’s happened very rapidly. And I thought, once Rupert signaled an interest in selling the assets of his company, that by combining the two it was a clear path—nothing is a sure thing—but would increase the odds of us continuing to grow the company in businesses in a world that didn’t look anything like the world we were operating in a short time ago. It’s kind of as simple as that. And I’ve been lucky in my life in that although this probably the biggest thing we’ve done, certainly financially, that I don’t typically—I’m not risk averse, and I don’t typically wake up afraid of anything—including, by the way, everything associated with transformation, which we will get into. So I looked at this as a huge opportunity. And of course, we have to be mindful of all the risks we’re taking on in the process, but in this particular case I was far more driven by the potential than I was about anything else. HAASS: You talked about waking up. And you notoriously wake up early. Do you have a bias? When in doubt, if it’s a close call, do you have a bias towards doing things or not? IGER: Doing things, definitely. HAASS: And let’s extend that a bit, which is one thing this deal will do, if and when it goes through, is it’ll make you much more of a global company. Because right now you’re—Disney’s pretty much an American company, in terms of your business. This probably, what, triples your global footprint? IGER: About a third of our revenue comes from outside the United States today, roughly. That’s largely due to the skew of ESPN, which is mostly a U.S.-based business, which is extremely not only profitable but brings in a lot of revenue. And then our theme parks, while we operate globally, the biggest is in Orlando. And it is so big that it essentially skews us to much more of a domestic company. The company is a global company. The brand is well-known around the world. And we do business in almost every market in the world. But, yes, we’re far more America-centric from a bottom-line perspective. And actually, I don’t know where you were going with the question, but among the things that—there were three primary facets to this deal that made it attractive. One of them was giving us the ability to penetrate international markets more deeply, more effectively, and diversifying our asset base outside the United States. HAASS: So how is it then that you produce content that’s both popular and works in this country, and that is popular and works in others? Do you essentially end up with multiple contents going local? Or do you think that there is such a thing as globally attractive content? IGER: Both. Both. And even today, before the—we end up with Fox, we do both. But what people hear most about is content that we make that has global appeal and does business globally. And that’s largely our movies. We make eight to 10 movies a year. They’re actually all designed to have global appeal. Interestingly enough, you could look all the way back to 1937, which was when Walt Disney made “Snow White,” which is the first movie that he made. And he took that to the world, actually. HAASS: It’s actually the last movie I’ve seen, so it’s really—(laughter)— IGER: I can get you a copy, unless you’ve illegally downloaded it, which would set this interview off on the wrong track. (Laughter.) But even back then, he was telling stories that were specifically designed to be universal in appeal, that actually resonated to people all over the world no matter what their ethnicity, what their background, even what their age. He was asked once, who do you make movies for? Do you make them for kids? Do you make them for parents? And he said, I make it for—to reach that very special place that everybody has in their hearts. Meaning, he makes—he tells stories, makes movies, to touch people’s hearts. So when you look at our business today, the highest profile content that we make is content that is global in nature. And the most recent example is “Black Panther,” which actually surprised a lot of people because people did not expect that a film that has virtually an entire black cast, that is made by a black director, produced by a black man, written by the same man that directed it, and tells the story of a mythical African nation would have—wouldn’t have particular appeal globally. But when you look at the film, you quickly realize that its appeal was not about the color of the skin of the actors—although that certainly was appealing to a lot of people—it was the essence of the story. And it was the hero and the villain. And there are a number of qualities or values that we infuse in our stories, certainly this is the case with Disney but it’s also now true with Marvel and with Star Wars and Pixar, that travel across borders. It’s fantastic, in terms of—in terms of commerce, in terms of growing the brand, and in terms of essentially developing a global base of people that admire what we do. HAASS: I would think, though, that potentially one of the difficulties is that some of the content, there might be local resistance. I mean, China’s, I assume, a big and growing market for you. How do you deal with the—hey, here you’ve got Xi Jinping, it’s clearly tightening up. We saw it with the anticorruption campaign. Now we’re seeing it with the abolition of term limits. We see it with the great firewall of China, controls over the internet. How is it you deal with the question of resistance to potential content? IGER: Well, let’s go back and talk Disney for a minute. I’ve touched upon it. But starting way back Walt started telling these stories we still tell today. And if you look at the core values of those stories, the value of hard work, the importance of friendship and family, the fundamental belief that good is going to triumph over evil, a sense of optimism, joy, et cetera and so on—you quickly, I think conclude that, well, if you infuse those in your stories, and that forms the basis of the story, that that will translate culturally across the world. And what’s happened over time, by adhering to those core values—and one of the things that’s been most interesting in this period of great change, and I’ve seen this happen with a number of brands, is there’s an instinct to abandon core values in order to maintain brand relevance in a world that doesn’t look anything like the world that existed a scant five years, 10 years ago, in our case when the company was founded in 1923. What we’ve done is the opposite, which is let’s stick to those core values because they do resonate so well. But let’s present them in more relevant ways. And we can come back to how that’s done. So specifically to your question, because we’ve essentially adhered to those core values, and actually if anything we’ve leaned into them, putting a brighter light on them, the brand has built up tremendous equity among people around the world, including foreign leaders, including Xi Jinping. So when it comes time to decide—and however it’s done in China, sometimes it can be somewhat opaque but I have a general idea how a lot of the decisions are made—what comes in and what doesn’t come in, Disney is, for the most part, looked upon quite favorably because of just—what we’ve just talked about. And it’s interesting, I mean, very specifically about China, he led a charge among senior government officials before he was in his current role, when he was vice premier and when he was party secretary for a brief period of time of Shanghai, to enable us with local partners to invest a tremendous amount of money, billions of dollars, to bring Disneyland, that quintessential American icon and experience, to the biggest, most populous city in the world. And that was—and he had—I’ve spoken with him about it. He tells a story of an argument that took place among Hu Jintao, the then-party secretary of Shanghai, and Xi Jinping when he was vice premier. And the debate was, do we fund a local company to build a gigantic theme park in Shanghai on this incredible piece of land that is right between downtown Shanghai and the airport? Or do we let Disney come in? And he said, we should let Disney come in. And when I asked him, why did you feel so strongly about that, he said, because you’re loved in this country. People love Disney. And they’ve heard of Disneyland. A lot of people have seen pictures of it, have read about it, have heard people going. And if we can do that here, that’s a triumph on our part. Pretty interesting. And for the most part, that approach, or the way they consider us, or how they consider us, is consistent across the businesses. So one of the competitive advantages that Disney has with that name and with those values is the access that it gives us to markets. HAASS: But Apple has, for example, had to make certain compromises in access to the Chinese market. Would you—do you have the principle that you would never change the content, say, of a film in order to sell it abroad? IGER: No. We have—we have at times refused certain requests. I’d rather not get too specific about that. But to my knowledge, by the way, we haven’t had any such disputes in China. We are asked at times to make certain changes. But again, you’re dealing—with Disney, you’re dealing with subject matter and content and standards that, you know, rarely offend. We, by the way, when we—when we take a film to markets around the world, we probably do more than anyone else in terms of tailoring it to those markets. So—and one of the reasons for that is because a lot of kids go to our films. Kids don’t read subtitles. They want to hear the sound of the character’s voice. And so we dub our films. By the way, all the movie companies do this, but we do it in many more languages. And we even dub films into Canadian French, as a for instance, to be so culturally relevant. And when we do that, we’re extremely careful about the language that we choose, so that it’s—so that we’re not essentially applying American interpretation and American standards. And even when we built Shanghai Disneyland we did the same thing. All the iconography, all the language, everything about the park we actually conceived of in Mandarin and translated into English, instead of doing it in English and then translating it the other way. We thought we would potentially make mistakes. HAASS: Can I speak then about another country? You, you know, talked about before, and it became public that you met with the new—the young crown prince of Saudi Arabia. So the question is, is there any chance that you’re going to bring the Magic Kingdom to the Kingdom? (Laughter.) IGER: He spoke quite eloquently and vehemently about what he’s trying to accomplish, not only in that part of the world but across the Middle East and in other parts of the world. He has significant concerns about the spread of Muslim fundamentalism in places like Europe, as a for instance. And after doing so, he made an impassioned plea to me to consider building Disneyland in Saudi Arabia. And I listened with curiosity and somewhat of an open mind. And I explained that when we make decisions like this, we consider cultural issues, economic issues, and political issues. And this was—and it’s—it may seem simple, but it’s far more complex. And he tried to make the decision easier from an economic perspective. (Laughter.) Try to be— HAASS: It’s good we’re all sitting down. IGER: I’m editing while I speak here, trying not to create headlines. And I— HAASS: Did he agree that Minnie Mouse could drive? (Laughter.) IGER: He—(laughs)—we didn’t get that far. (Laughter.) I was very—I actually was very frank with him about it. And I’m not going to get into those details either. But he asked me an interesting question. And he said, do you believe in what I’m trying to accomplish? And he said, if you do, then I think you ought to do this. (Laughter.) And I ended up saying that I would visit and see for myself, but that that in no way should be interpreted to mean we’re developing a park, but that I would listen—but I’m a fun—I often say to the senior executives of Disney, if you don’t go you can’t grow. Meaning, it’s not about making decisions from Burbank, California. It’s about getting out in the world and seeing market firsthand, tasting the food, speaking to people, not just meeting with government officials, really understanding it. And so I’ll go. Whether we grow or not there, I don’t know. But I’ll go. There’s a lot of people who live in that part of the world. We have, over time, been asked by many from that region to consider putting a park in that region. And so far, it hasn’t—it hasn’t been at the top of our list in terms of markets that we would open up in, but we’ll take a look. HAASS: Turn to something about—a question—a few questions about being the head of your company. Talk a little bit about what it’s like to be the CEO these days given two things. One is the stunning pace of technological change. And second of all, the uncertainty coming out of Washington, and the duality of those two—so you get up in the morning. Again, you get up—you’re the only person I know who gets up earlier than I do. And what is it—how does it affect your ability and the way you go about your job? IGER: Well, I think the demands are much greater because of it. You’re right, the pace of change has never been faster. We talked about it in the sitting room before we came in here. If we were sitting here five years ago, certainly 10 years ago, there are a number of companies that affect our daily lives, that we do commerce through or whatever, that didn’t—if they existed, they were nascent. And many of them didn’t even exist. I look back often at the world’s top brands. And I’ve been at the company ABC-Disney for 44 years. So I look back over that span of time, then I go back even more. And we talk about being born the same year. Think about the ’50s and the ’60s and the great brands in our lives. And we think about U.S. car companies, General Motors, and Chrysler, and Ford, for instance. We think about, even then, the emerging tech companies. I remember how excited we were about Xerox and IBM, as a for instance. HAASS: Xerox, yeah. IGER: And we can go to transportation. TWA, Pan Am. HAASS: Eastern Airlines. IGER: Eastern Airlines. All of those. And then you think today, well, they’re—how many of them are either not as relevant or completely gone, and why? HAASS: If you go back and look at that book, In Search of Excellence, probably more than half of those companies no longer exist. IGER: So you have to ask yourself why. Obviously, global transformation, led in many respects by advance of technology, which is only happening faster—I love Tom Friedman’s book—most recent book, when he talked about that. But then you have to ask yourself: Well, is there anything those companies could have done to avoid becoming irrelevant or completely extinct? And it does go back to what I talked about, which I think—and we also should talk about the innovator’s dilemma. I think a lot of companies seem to believe that because the world is changing so much, the—probably the most important thing to do is to stray from the very essence of what created the value in the first place, the brand value. And look, it happened at Disney, in that as the world got more sophisticated, as kids aged out our young demographic faster, there was a big debate about standards. Should we infuse it with saltier language? Should there be more violence? Should there be more sexual references? One could easily have concluded that to be relevant in the world we should have done that. In reality, the opposite is true. It’s that’s what created the value. Stick to that. But then figure out a way to portray your brand, to bring your brand into people’s lives far more in relevant ways. So when we bought Pixar—and this was very much on our minds—they were making animation that was far more advanced visually, computer generated animation, than our 2-D animation. To kids, more modern, more relevant. We were the first company to put our movies and our television shows on the iTunes platform—a sexy, modern, relevant means of accessing content for consumers eventually all over the world. Both—in that particular case, it meant disrupting our own businesses, which is something you also have to be open to doing. So stick to your core values, be willing to disrupt your own business—because the business models are the ones that—in my opinion, what’s happened in a lot of these businesses is it’s not that the brand was not relevant anymore, it’s the business model that brought the brand to the world that was less relevant because new models emerged that gave the consumer either easier access, easier use, more mobility, you could hire better technology, to come up with a lot of examples. So, going all the way back to what you asked, is it—one of the key things that I think about a lot is, one, you have to be really curious, more so than ever before. You have to be aware of what is going on in the global environment that affects your business the most. Second, you have to be willing to take risks, and that includes being a disrupter. And it’s hard, because we’re competing with, you know, all the insurgents. I have a—I have a friend who does some consulting, just one basically friend to friend with me about brands in today’s world, and he talks a lot about an insurgent’s mentality. He actually counseled me when I was trying to get this job about how I would articulate this to the Disney Board, a man named Scott Miller. And he said you’re competing with people who don’t have a past. They have no baggage. They don’t have to—the only direction they’re looking is forward. It’s an unbelievable luxury that people in jobs like mine with companies that have almost 100-year legacies don’t have. So you have to—I think you have to transform yourself. And he said or someone wrote recently no leader ever succeeded by leading his company or his country into the past. When you think about it, it’s only about the future. And my—when I met with the board to get the job, I said to—they tried to—they asked me a lot of questions of what happened in the past, what happened here, what happened there. We had gone through a tough period of time. And I said I can’t do anything about the past. It is what it is. Let me talk about the future. And it was interesting because it helped me frame up what I wanted to do with the company—and it’s what we’ve done—is keep looking forward, do not look back. Keep looking forward. And it’s—so, you know, I don’t know if I’ve fully answered your question, but those are components of sort of how I start my day. HAASS: But also it’s complicated because—I hadn’t thought about it until you said that. Not to compare our two institutions, but the Council’s two years older than Disney. We were formed in ’21. And what you have is in some ways the challenge where you’ve got this legacy business—and you talked about your brand—and at the same time you’ve got to constantly adapt and innovate. And I do think that’s a difference from—it’s like, so, if you’re competing with the—you know, in this age of cord-cutting and you’ve got the Netflixes and all these other places, you have both the advantage but in some ways the disadvantage of the fact that you are a legacy business. And you begin with this enormous brand, which on one hand is a great advantage. On the other hand, the time is something of a constant because you don’t want to do things that essentially undo what made you who you are. IGER: And what you said—and think back now to the conversation we just had. Think about IBM. Not to pick on IBM, but look at the position they had. And you can read the story about Steve Jobs. And they had a brand with great values, but they refused, essentially, to allow it or enable it to migrate to different platforms that felt disruptive at the time. And by the way, they had a good thing going. But there was probably nothing wrong with the brand itself. I remember, you know, looking up to General Motors as a kid. Now, Mary Barra’s on our board. I want to be a little careful here because they still make a pretty good product. But, you know, you don’t abandon those. The core values that General Motors stood for and Pan Am stood for would work today, it’s just how you do business in the world and how you bring the product forward has changed a lot. HAASS: I’ve got two last questions, because even though I’ve got about a hundred I could ask, but I will show uncharacteristic restraint and give others a shot. But I can’t let you go here without asking, you were wildly and hotly rumored to be considered a run for public office. And we have the precedent right now of a businessman in a—in a certain public office. And I guess two questions. You know, reportedly you’ve come out against it. And to the extent it doesn’t get overly personal, people I think would be curious why. But do you think that someone with a business background has advantages, that a lot of that is translatable? We were talking before about Rex Tillerson; it didn’t work so well for him. Do you think that essentially what makes you so successful where you are, if your calculations were different, that they could succeed in a place like Washington? IGER: I don’t really like stereotypes. So while it may sound presumptuous as a businessman to say, oh, I could do that, I don’t really think it’s about that. I think it starts with our country and where I believe people are today, and the state of our government and the state of politics in the United States today. I did consider this very seriously. I actually considered it ahead of the 2016 election. And I was—and the reason, first of all I consider myself a patriot, and I actually consider myself a product of a true American Dream. I was born in Brooklyn, like you, grew up in a lower-middle-class family. My dad had some medical issues that prevented him from having a flourishing career, even though he was an incredibly bright man and I think a talented man. And I—you know, I started as a $150-a-week production assistant at ABC and worked my way up, and here I am running I think one of the greatest companies in the world. That’s an unbelievable story. I would love kids who are born in America today to believe, to have the optimism that they had the same opportunity that I did. And so I—I know that’s just one very small item on a long list of things that I considered, but I had the sense that America was losing its optimism, was losing its vision, was losing a sense of national purpose, and that we were going to raise a generation of kids that did not believe that the future was going to be brighter, healthier, wealthier, whatever than the lives of their parents—which, if you recall growing up in the ’50s in the United States, I don’t know, the day never went by when you didn’t believe that your life could be better than the life that your parents led. And I go to places like India and China. And with all the issues that exist in those countries, when you meet young people they seem to have a level of enthusiasm that I remember having as a child growing up in America. So, thinking about that and thinking about what I believe the country needed, I thought that we—that America was ready to bring to Washington as its president someone completely from the outside, from outside the system, because if you ask people I believe they’d conclude that American government was no longer working for them. And I know we talk about it a lot as it relates to whether it’s the white working class or the poor in America, but I actually believe that that answer would be given by many more people, even wealthier people, today, that America’s not working and our government is not working for them. And I kept talking about Mr. Smith going to Washington, then I watched the movie and I realized he was just an appointed senator. I thought he was president, but it had been a long time since I had seen the film. But I believed that it was—that America was ready. And in thinking about it more—and again, I’m really simplifying it; I probably simplified it to myself, and I’m certainly simplifying it now—it wasn’t quite a calling because I’ve never really felt that I had that, but I didn’t see a solution, and I thought maybe I could be that solution. And when I raised it with my wife, she was horrified by the idea. (Laughter.) And deeply, I think in part because she could tell I was serious. (Laughter.) And I don’t know whether I seem like I have a sense of humor or not, but I don’t joke all that much. (Laughter.) And it was actually an awful night. We had a—(laughter)—it was kind of a date night—(laughter)—sort of one of those nights the kids are away, we’ve got a last minute, hey, let’s go to dinner. And we sit down to dinner, and stupidly I say: I want to run for president. (Laughter.) Not quite that fast. And then— HAASS: Who said romance was dead? IGER: I don’t know. (Laughter.) It was dead—it was dead that night. (Laughter.) Took me a long—took me a long time to recover. (Laughter.) And, anyway, she knew that I was serious enough, and she just said no. And I could tell she was serious. And so I just figured it was complicated anyway, and frankly, if you look back pre-’16, you know, I think there was belief that Hillary Clinton had an easy path to getting the nomination, and I was raised a Democrat. At that point I think I was a registered independent. But, long story short, I abandoned the idea. And then sometime well after the ’16 election I started exploring it again. And when I approached her—I was more careful this time around—(laughter)—she said she really was not in favor of it, but she gave me license to explore it more. And that’s—I started doing that. I don’t think it’s—I think it would be a gross overstatement to say I was running or I was planning to run. I was seriously thinking about it and speaking with a fair amount of people just to get a sense for what they thought, people that I respect. And then we ended up having the opportunity with 21st Century Fox, and my board—rightfully so—said you’re not going to make a $60-some-odd billion acquisition and then leave the company. (Chuckles.) So I agreed to stay on. And Rupert, just in negotiating with him—and he’s taking Disney stock—had the same thought, which is we were going to go through a CEO transition because I was planning to retire, and he felt strongly about that not happening, that being put off. HAASS: You’re not so good at that, by the way. IGER: Oh, retiring? HAASS: Yeah. IGER: I flunked retirement. So, anyway, I am not—I am—I am going to absolutely 100 percent kill any rumors, any thoughts, whatever. I am running The Walt Disney Company through the end of 2021. HAASS: OK. And then, last question: 2024. (Laughter.) IGER: No, I’m employed till 2021, and I’m— HAASS: Well, there we go. That’s not as Shermanesque. You heard it right here. (Laughter.) You just made some news. IGER: No, I am making no—(laughter)—I don’t know, that’s going to start a rumor, too. HAASS: You’re welcome. (Laughter.) IGER: You know, the joke this week is I went to Des Moines, Iowa yesterday. (Laughter.) That was a—it turned out that was a mistake. (Laughter.) HAASS: No, you’ll know when Disney opens one of their new parks in New Hampshire. That will—(laughter)—just look for that. That’ll be a telltale sign. You heard it here—you heard it here first. OK, let’s open it up to our members for questions. Wait for a microphone, let us know who you are, you keep it short, and Mr. Iger has already demonstrated his ability to keep things short. Yes, sir? Jason, we’ll get you next. Q: Thank you very much. I’m Chris Graves, founder of the Ogilvy Center for Behavioral Science at Ogilvy and Mather. And congratulations to Willow for bringing your back to your senses. IGER: (Laughs.) Thank you. Q: My question is about aligning your brand with contemporary issues. Many brands have decided they needed to take a point of view or embrace a stance on issues like gun control, climate change, LGBT community. Do you think that Disney will ever do that, or is that too explosive? IGER: This is really complicated for a couple of reasons. First of all, because our brand stands for fairness and justice and inclusion, all people being treated equally, we have purposely, in telling our stories, told stories that touch upon some of the more—some controversial issues that exist in today’s world, although we’ve not in any way been shy about it because we fundamentally believe it’s the right thing for us to do. And so I’m thinking specifically about same-sex couples and homosexuality as a for instance. And we’ve—we will continue to do that, but we do so—how do I put it?—with care because we’re reaching a world that doesn’t necessarily agree with us on all of these issues, and we try to be—we just try to be sensitive about it. So it’s a delicate balance between us wanting to foster a sense of fairness and equality and justice, and, in effect, have the product that we make best reflect the world that we’re doing business in. In order to that, you’re including in your product people of multi-colors and backgrounds and ethnicities and sexual orientation and you name it. I have felt—and I’m going to—I’ll talk specifically about some other issues—that—I’ll call it Hollywood, which I said earlier I didn’t like stereotypes, but I’ll allow myself to be guilty on this one—has perhaps gone a little too far in infusing its stories with political themes that best reflect the positions of those in Hollywood and don’t necessarily reflect as effectively as they could the diversity of opinion that exists in the world. And I’ve tried to deftly counsel and discuss this subject with a number of executives that work for us—I can’t speak for the rest of Hollywood—in thinking about, as we think about diversity, consider that that diversity should also include political opinion, for instance; that if we want to put—make a product that’s appealing to the world, that we have to just, again, think about the diversity of opinion that exists in the world. And that doesn’t suggest a retrenchment, it just suggests that there are things we should also be considering. So ABC put “Roseanne” on the air, and there’s a big uproar among certain liberal circles. How could we do that? Because Roseanne, the character in the television show, in this particular case is a Trump supporter, which I actually think is great. But there has been some backlash to that. In terms of other positions, we took a position as a company on the Paris Climate Accords because—and we are—when we think about how we behave as a citizen of the world, one of the things we think about a lot is what is our environmental footprint: How much are we consuming? Where are we sourcing our goods from? Where do we get our energy from? Those sorts of things. And it’s reflected in a number of different ways, particularly at our theme parks. We felt that we—that the world has a huge problem in terms of the environment, and that the Paris Climate Accords offered the world an opportunity to actually convene together and cooperate to make the world simply a healthier place and a better place to do business. So that was a business decision that we made that maybe appeared to be political, but we thought there was a very specific reason The Walt Disney Company should be in favor of a global effort to protect the environment. We also took a position on DACA. We did that because we have a number of employees that are DREAMers, and they came forward to me in some cases and expressed a fear that they had about being sent back to a country that they may have been born in but they had no familiarity with, in some cases didn’t speak the language, in all cases didn’t have homes to go back to, and in many cases didn’t even have family to return to. And in expressing those sentiments to me, I felt that there was a reason why the company should support extending DACA and enabling those people to stay in the country that they considered home. HAASS: Can you say what you mean by the company should support? When the company—when you agree with something, say DACA or Paris— IGER: We took a public position on it, simply. That’s basically it. We did not do significant lobbying on the subject. But we have a voice and we took a public position. To my knowledge we’ve not infused that subject into any of our stories. HAASS: I was going to ask you that. IGER: When we think about corporate social responsibility as a company, by the way, it starts with the stories that we tell. But it’s the—it’s a great question, and it’s complicated. It’s quite complicated because on one hand we try to be appealing to all, and sometimes that means not alienating people with subject matter and opinions that they don’t necessarily agree with or that they find offensive. But we try to balance that with the value system that was created—or the values that are infused in our brand was created by Walt Disney, which is if you’re going to be inclusive in nature and appeal to all people in the world, then your product’s got to look like the world looks. And that includes a variety of different people of shapes and sizes and backgrounds, et cetera. HAASS: Another controversial current social issue is the whole #MeToo movement, and obviously Hollywood is very much a part of that. Could you say something about how Disney has coped with that? IGER: Well, we’ve been working really hard for a long period of time before this really exploded as a subject to create an environment at our company that people feel safe in. And that means to give them an opportunity to rise up and express themselves if they feel anything is being done that is simply not ethical, wrong, dangerous, over the line, you name it. And I would say—I’m not going to speak for the rest of Hollywood, but I would say we have—even though we have expressed that belief strongly, that we, like many companies, have—still have work to do in that regard. Even by expressing that, people, particularly women in the workplace, have not felt as safe, have not felt as free to stand up and speak what is on their mind and what they’ve been experiencing. So what we’ve been trying to do—and sometimes it’s by leading by example, but what we’ve been trying to do is improve significantly in that regard. And I’m a big believer in not relying on the industry. Not that, you know, we are—we are above it all, but I feel issues like that are best dealt with in our company as a company than as an industry, even though, you know, we’re certainly cooperating with industry efforts to achieve some of the things that we’d like to achieve. We’ve had transgressions. We’ve had issues. People have lost their jobs over it. But I’m optimistic that at least by all of this surfacing that there’s a greater sense of urgency, and hopefully it will lead to more action. HAASS: Jason? Q: Thank you. I’m Jason Forrester, a Council member. I’m an advisor to a purpose-built soundstage in the Hudson Valley called Lumberyard Studios. And when you mentioned, one, the jobs that people need to have in the future, the hope that needs to be instilled in our populace, and then this great boom in content—content creation. And I think of around here the incredible—again, incredible increase in production space—Steiner Studios, Silvercup, et cetera. For organizations that are looking to both contribute to great content and to providing great jobs in the entertainment space, would you have any advice? IGER: Well, there’s—the good news is that there has been an explosion of content being made, a gigantic increase and proliferation, actually, and that’s global in nature. So if I were going to invest today in space that can—that is hospitable to or can enable content to be made, or if I were asked to do so, I’d probably think—I’d be open-minded about that because I see that continuing. I mentioned it is global in nature because the content that is being made is more being—well, we really didn’t get into details—there’s more being made that’s really locally specific, and there’s more being made that as global appeal. And because of that there’s—we make content all over the world. A movie that we make today which travels across the globe isn’t necessarily made in the United States, although a majority of our movies have production in the U.S. We do a lot outside the U.S., too, and there’s a lot of competition for that business because there’s a belief that it creates jobs—not only direct but indirect jobs as well. So there are subsidies that are offered both, by the way, within the United States—so there are states that put up subsidies and compete for the production. Georgia has been one of the more active states in that regard, and they compete with others. California has subsidies as well, but they’ve lost business in California to states that have greater subsidies. And then there are countries that have subsidies. Probably the most aggressive is the U.K. where we get actually—there are advantages to—for us to shooting some movies in the U.K. because of that. So I think it’s great to go into that business or to be in that business because there will be more demand for it. Technology, though, is also creating efficiencies, so you need less space and sometimes fewer people, but I think there’s going to be continued growth in things that are being made or created in the intellectual property space, so it’s probably a good business to be in. HAASS: Can you say something about a country where there’s a lot of people and a lot of content being produced, which is India? You’ve got—as I gather, you’ve got a park in Europe, outside of Paris. You’ve got three in Asia. Can you say something about India, given Bollywood, given—you know, it’s soon going to overtake China as the world’s most populous country—how a company like Disney looks at India? IGER: Well, it’s interesting because the acquisition that we’re making will give us a substantially greater footprint in India—Star India, the TV channels that they run, and the other businesses dwarf ours in size. India is interesting because on the movie side they probably have the most entrenched—in this case is a good word—successful, local movie business, Bollywood, than any other country in the world. And because of that, there is a huge—well, there is a preference in India to movies that are made there that are not only culturally relevant, but also in the multiple languages. India, as we know—over 20 different languages spoken in India. And so it’s not the easiest market to enter unless you are in it there to make it there. We’ve tried our hand there and have not done all that well. Some of our movies do translate there and are quite successful, but I would say our business there long term will rely more heavily on product produced for the market than product exported to India. HAASS: OK. Yes, sir, in the back. IGER: By the way, theme park is interesting. We get asked about that there, too, and I think there the population growth suggests at some point it might be an interesting market. But there are variety of infrastructure issues, and for a long time, records kept about land ownership there were not as—well, they weren’t as rigorous as—so if you need to amass a— HAASS: Oh, no— IGER: —10-square-kilometer area of land to build Disneyland, it’s going to be hard collecting all the titles to determine who owns them. HAASS: The backlog of legal cases is often measured in decades before things can be adjudicated. It’s also—just personal—it’s one of the reasons there are so few golf courses in India; it’s so hard to get the land. IGER: So we could build a tiny Disneyland there. (Laughter.) HAASS: Miniature Disneyland. Yes, sir? Q: Thank you both. Scott Helfstein, Morgan Stanley. And I’m going to go for the low-hanging fruit. Intellectual property is a huge component of your business. Do you have any thoughts on the current U.S. approach of using trade as an enforcement mechanism for international intellectual property? IGER: I think—well, I’m not going to comment on how you use trade, but I can say that in some of the international trade agreements—the South Korea trade agreement and the, I guess, ill-fated and maybe soon-to-be re-fated Trans-Pacific trade agreement—there was robust intellectual property protection built into that agreement, and we lobbied heavily with the Obama administration and specifically with Michael Froman to make that language as robust as possible for the obvious reason— HAASS: He’s sitting in the back of the room. (Laughter.) IGER: Michael! (Laughter.) I was going to email you today about the TPP. (Laughter.) HAASS: Just do a verbal email. (Laughter.) IGER: I should let him—I should let Michael answer this question. We actually got pretty far there, and we were extremely enthusiastic about it, and thought it had incredible value because it was protecting intellectual property that was housed under the U.S. copyright regime, and in most cases, made in the United States, which means it created and supported industry and jobs. And it’s a great export business of the United States, and we have a positive balance of trade in the movie business with virtually every country that we trade with—except India, interestingly enough—meaning we bring more movies that are made in America into their countries than the movies that are made in their countries into the United States. And we think it actually done right, and it’s one of the ways government can actually work for corporations. I’m not sure there are many left, but that would be one. HAASS: Yes, ma’am. Q: Hi, I’m Morgan from EY—Ernst & Young. I thought it was really interesting—you talked about going into new markets, and you said that you look at the cultural, economic and the political. Can you sort of describe to us the framework that you use when making decisions, going into new markets from the political aspect? I don’t think a lot of firms look at that, and it was interesting to me that you called that out. IGER: Well, stability—primarily stability, that’s important. You could look at markets in Latin America, for instance, where that’s not been the case, and we were—when we talk about going into markets, it’s relatively inexpensive to move a lot of our content into markets, so when I—we talk about—well, we’re mostly talking about—most high capital—capitally intensive businesses—theme parks would probably be the primary example—where you spend billions of dollars on a theme parks, there are reasons why we haven’t put it in certain places. One of those is political stability or a lack thereof—economic stability, spendable income, growth in spendable income, sometimes land—cost of land, taxation, and then another on the political side, intellectual property protection is one. Another is censorship. There—you know, there are markets that just are very difficult to go into because they’re too rigorous when it comes to their own standards, sometimes, that emanate from politics, and it becomes harder to do. HAASS: Sir? There are a lot of hands up; I’ll do my best. It’s working. Q: Hi. Ian Murray from Peak Ten. Regarding your comment on the innovator’s dilemma, you’re facing one really regarding the delivery of content with OTT and the current—and I know you started ESPN+ today, and I’m just wondering if you could comment on your thoughts about the innovator’s dilemma in this case and whether you feel you have the DNA internally to make that transition. IGER: The most disruption that we’ve seen and felt as a company is in the media space, obviously, and it’s not necessarily what people are consuming—although the growth in short-form video might be an exception to that—it’s really how they access content, when they watch content, how they pay for it, what they pay for it. And the disruption that we’re talking about specifically here is the impact of technological change on competition—there are new entrants in the marketplace—and the specific impact where the most harmful or detrimental to us is the impact on the multi-channel television ecosystem or cable and satellite television, which has been one of our more profitable businesses for long periods of time. When I got this job in 2005, I actually believed that we were going to see some significant disruption in that space, and to some extent—well, I was right, but I would say it has happened faster than even I predicted. But we believed at the time that, even with the disruption, that high-quality, global brands would be the most apt to thrive in a disrupted world. And so we put almost all of our capital in that direction. And what that meant was we bought Pixar, we bought Marvel, we bought Star Wars, as a for instance, and we leaned heavily into Disney, which we had not been doing. In 2005 we were making more non-Disney films than Disney films, in part because of the concern that people had about changing standards, and I decided to go the opposite direction. I did not know then how fast the disruption would come or what the world would ultimately look like, but I did believe that, as choice proliferated—and this has been borne out—people would actually flock more to big, high-quality brands than ever before even though there was conventional wisdom that went the other way; that as choice proliferated, brands would become less important. Brands have become more important because when you are faced with a sea of choice—and often you have to make decisions so rapidly—you want to make sure that what you’re paying is value—brands typically connote value. Two, you don’t have time to really consider all the choices that are in front of you and so you tend to make decisions based on what you know—it’s actually kind of wired that way—versus taking a chance on something that you’ve never heard of. The other thing that has happened that’s interesting is that, even with all this choice, people still flock to what is the most popular, and algorithms actually are our friend in that regard. How many times do you see lists of, you know, the most downloaded movies, the most downloaded music, what’s the most popular, all the stars on the iTunes platform for songs, what people consider the best. So I figured if we stayed in that space, no matter what happened with disruption, we ultimately would be OK. We find ourselves today in a place where that is definitely true, but how we’re monetizing all this great intellectual property is, to some extent, being challenged, mostly on the TV side, and so what we’re doing is we’re pivoting, fast and furiously, in the direction of moving the content faster on to new platforms direct to consumers—for a variety of reasons, by the way, including having a more intimate relationship with the customer and having an idea of—being able to serve the customer’s needs better. We’re doing that quickly. That is disrupting current businesses and relationships, but we believe we’ve got the intellectual property to do that. In terms of whether we have the DNA, I’d say not as much as we needed, which is why we’ve made acquisitions, which is why it was important for us to buy, you know, some relatively small company called BAMTech from—that was developed by Major League Baseball. With the Fox acquisition, we get two incredibly robust direct-to-consumer platforms. One is Sky in Europe and the other one is Star in India and in Asia. So we have the product; we believe we’ve got the culture to disrupt ourselves and to move fast, and now we believe we’ll have the technological wherewithal and the—and the platform to be able to do it. And we just reorganized our company specifically for all this to happen. By the way, just as an aside, I was talking about people flocking to what’s popular—we talked about it earlier—and I had seen statistics in a book that came out last year called Hit Makers. In 2016 there were 8.6 million different songs that were published or came out. Ninety-six percent of them were bought—were bought less than a hundred times, which is pretty crazy, and 40 percent were bought only once. So people were still flocking to the top. If you look at movies, there were 700 movies made in the United States alone in 2016. We made eight, and we had the—we were the—we were the number one studio in box office. So again, it doesn’t mean that every film we make is good and is successful, but those big brands, and those known products, and those products that are designed to—everything is designed to be popular—but designed to take advantage of the brand halo and the brand attributes are still—even in this crazy world that we live in, still dominating marketplaces. HAASS: Mr. Iger, one of the few principles those of us on the East Coast still hold dear is that we tend to begin and end things on time. You may not recall this from your youth. (Laughter.) So we’re going to— IGER: Except doctors’ offices—(laughter)— HAASS: That’s true. IGER: I suggest everybody move to LA because doctors are on time—(laughter)—not here. HAASS: So I will respect people’s time here as well as your own. Before I thank you and everyone else, actually, let me sort of—if I can find the announcements here, yes! We now have a reception upstairs in the Rockefeller Room for tonight, and then tomorrow morning we start bright and early at 7:30 for breakfast, and 8:00 we have, appropriately enough, a panel with Bob Rubin and others—Charles Phillips—about disruptive technologies and their implications for this economy. Mr. Iger, congratulations on all you’ve done— IGER: Thank you. HAASS: —and thank you so much for being with us tonight. (Applause.) IGER: Thank you. (END)

Speakers discuss gender disparity in corporate boardrooms, and what businesses can do to promote diversity and inclusion in the global labor market.