CEO Bob Iger is trying to recapture Disney’s magic. 3 big problems stand in his way

• 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

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This edition of CEO Daily was edited by Jackson Fordyce.