• The acquisition of 21^st Century Fox in 2019: Disney thought it needed Fox’s library of content to fuel the launch of its streaming service. But the Trian research suggests Disney vastly overpaid, forking over some $52 billion to buy the studios from the Murdoch family at 26 times EBITDA.
• Disney focused on subscriber growth at the expense of profitability, participating in a kind of streaming arms race that was cheered at first, but now is getting a second look. Disney spent hugely on marketing to sign up unprofitable customers.  
• Chapek instituted a matrix structure that separated control of expenses—which lie with the content creators—from control of revenues, now centralized in Disney Media and Entertainment Distribution. That further cut the connection between revenues and costs.

More fundamentally, Tully writes, Disney flubbed the “most basic value equation in finance”—massively increasing its capital by piling on debt and equity while making even less money than before. Whether Iger can bring back the magic may ultimately define his legacy as CEO—and could also inform others considering second acts for former CEOs. You can read Tully’s full analysis here.

Separately, I have had a flashback this week to my very first paying job, which was parking cars at Ruby Falls, a tourist attraction in Chattanooga, Tenn. It was an unpleasant one, and I was always impressed when the owner of the business stopped by, donned one of the unattractive white hats we parking attendants wore, and helped us do the dirty work. It’s a tried-and-true management tactic that’s been resurfaced recently by Uber CEO Dara Khosrowshahi and new Starbucks CEO Laxman Narasimhan, as Fortune‘s Paige McGlauflin reports here.

Other news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

TOP NEWS

Diversity struggles

BlackRock is struggling to retain Black and Latinx leaders to the point that their departures are nearly offsetting other efforts to diversify the firm's workforce, according to an audit by former U.S. Attorney General Eric Holder and his law firm Covington & Burling. The report found that quitting rates for senior Black employees almost equaled hiring, resulting in little change in senior Black representation. Bloomberg

Goodbye, BuzzFeed news

BuzzFeed is shutting down its news division and cutting 15% of its total workforce due to financial struggles. Around 180 employees will be let go from the company. CEO Jonah Peretti admitted to over-investing in the news division, which led to the layoffs. The Associated Press

Whole Foods’ layoffs

Whole Foods is set to lay off hundreds of corporate employees as part of a restructuring that will reduce the number of operating regions from nine to six. The company says the layoffs will hit less than 0.5% of its total workforce; it's not planning to close any stores or facilities. Wall Street Journal

AROUND THE WATERCOOLER

Why rebranding a corporation isn’t for the faint of heart by Fortune Editors

Google will offer ad clients A.I.-generated marketing campaigns similar to ones created by humans at agencies by Steve Mollman

Meta employees accuse Mark Zuckerberg of shattering the ‘morale and confidence in leadership of many high performers’ by Prarthana Prakash

Most first-time workers get a promotion within 3 years. Gen Z wants theirs right away by Jane Thier

‘Lawsuit time’: Elon Musk explodes after Microsoft’s Twitter ad snub by David Meyer

This edition of CEO Daily was edited by Jackson Fordyce.