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Disney fires TV content chief, Goldman downgrades Netflix

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Yahoo Finance entertainment reporter Allie Canal details how Disney has fired its TV content chief Peter Rice, how streaming platforms are attempting consistent messaging, and Goldman Sachs's downgrade of Netflix stock to 'Sell.'

Video Transcript

DAVE BRIGGS: Content and culture clashing at Disney in a move that shocked industry insiders. Disney firing its most senior TV content executive, Peter Rice. Yahoo Finance's Allie Canal is here with the latest on that story. Hi there, Allie. What are we learning?

ALEXANDRA CANAL: Well, we're learning that Peter Rice was reportedly not a cultural fit at Disney. That is what CEO Bob Chapek allegedly told him. But it's a pretty big shakeup in Hollywood, especially since Rice has long been viewed as a possible successor to Chapek. He had just renewed his contract. And it really underscores the chaos that surrounded Bob Chapek's CEO journey so far. Insiders told the Hollywood Reporter that morale is, quote, "terrible," that he made another massive mistake.

But Disney put its support behind Chapek. They released a statement supporting him and his leadership. Still, though, there's no denying that there's been problems since he took over in 2020. A lawsuit with Scarlett Johansson over breach of contract, reorgs that have confused workers, and the latest one being the political battle with Florida governor Ron DeSantis. Chapek was widely criticized by employees, industry execs, for not immediately denouncing the Parental Rights and Education Act, or what critics have dubbed the Don't Say Gay bill. The stock has fallen sharply, down more than 35% year to date.

But it's not just Disney that seems to be going through this corporate reckoning. Netflix dealt with a very similar situation over the controversial Dave Chappelle comedy special. That forced the streamer to update its content guidelines for the first time since 2017, basically saying, if you don't like the content on our platform, then this might not be the place for you to work.

And then we had another media giant, Spotify, also forced to say that it won't take on the position as a content censor. And that came after Neil Young and some other musicians exited the platform over the Joe Rogan podcast. So we seem to be at this inflection point for a lot of these companies. It's a different time now. And these CEOs, these companies, they have to be very clear and upfront about what their culture is like.

SEANA SMITH: Yeah, Allie, you mentioned Netflix. And I want to bring that up because the stock moving lower today, off just about 5%. We got a downgrade from Goldman Sachs. And you brought up some of the competition that's in this space. And that's actually one of the things that Goldman's worried about.

ALEXANDRA CANAL: Yeah, Goldman very worried about the increased competition, also the consumer recession as well. So really more macro concerns there. They slashed their rating of Netflix, downgrading the stock to a sell from neutral. And so far, Netflix shares are down about 70% year to date. So there's a lot that's facing all of these streamers right now. So it's something to watch moving forward.

SEANA SMITH: All right, Allie Canal, thanks so much. Netflix shares off just about 5%