Welcome back to In The Room.

Tonight, the inside conversation surrounding Bob Iger’s remarkably candid Squawk Box interview and what it portends for The Walt Disney Company.

I was still rubbing my eyes, searching for the hotel room Keurig, when Faber asked Iger to specify those challenges. “The disruption of the traditional television business probably is the most notable,” Iger said, adding that “transformative work” would need to be done to deal with “no growth businesses... and particularly the linear business.”

Was Iger saying he was considering selling Disney’s television stations, ABC and FX? “We have to be open-minded and objective about the future of those businesses,” Iger replied. “They may not be core to Disney. There’s clearly creativity and content that they create that is core to Disney, but the distribution model, the business model that forms the underpinning of that business, and that has delivered great profits over the years, is definitely broken. And we have to call it like it is.”

The texts started coming in fast and furious, from sources in Hollywood, New York, and even a few of Iger’s fellow media executives here in Sun Valley. “Holy shit!” one said. The industry has long been wrestling with the inexorable decline of the linear business model, of course—we cover it here weekly—but its eventual obsolescence somehow feels perpetually over the horizon. The era keeps ending, but yet never seems to end. No one anticipated that Iger was going to go on national television and sound the death knell, effectively hanging a “For Sale” sign on ABC’s door in the process, all while he was ensconced in the cradle of dealmaking activity to gauge the potential interest.

Of course, this pessimistic stream of consciousness seemed all the more profound coming from Iger, the universally respected Disney lifer, who had grown up at ABC, literally as a stage manager on the ABC soundstages, and had for years referred to its news division—hyperbolically, no doubt—as the crown jewel of the Disney business. Now he was declaring that it may not be core to the business at all.

There was a time not so long ago when people thought the answer to that question might have been Apple or Alphabet. Now it seemed like the best ABC News could hope for was Sinclair or Nexstar or, more likely, a private equity blue-chipper with a theme in the space, like Apollo—and what would ABC News even be by then, without the patina of Disney’s Magic Kingdom and its marketing prowess, and after the severe sales-priming cuts that would inevitably reduce its potential?

One ABC News source sought consolation in Iger’s remarks about how the content remained core to Disney, even if the distribution model needed to change. “It’s uncertain here,” the source said, “but we will keep doing our jobs and see what happens—people always need and want news.”

True enough, perhaps, but people don’t necessarily want or need their news from a gutted legacy broadcast channel, especially one without the Disney patina, and that can no longer afford to pay Robin Roberts, George Stephanopoulos and Michael Strahan the combined $75 million a year they collect to sit at the same desk. (We’re getting ahead of ourselves here, but how will ABC News age on Hulu if Iger is no longer incentivized by the synergies?) Anyway, questions abound but the hypothetical direction is dawning on many. “The first thing that gets crushed in a spin-off is an expensive news division,” one veteran executive told me. “Private equity takes one look at [that] and says no thanks. We can do this for a lot less and make a lot more. Who wants to be on TV for $250K?”

Iger suggested such conversations were already underway, but declined to elaborate. On CNBC, Faber’s colleague Jim Cramer mused that the most obvious partner would be Apple. Who knows? Tim and Eddy are hardly an open book. And it also seems likely that any future partner will also have to take on some of Disney’s significant debt, which Iger will likely want to send to sea on an ESPN vessel.

As the CNBC interview progressed, Iger kept saying the quiet, uncomfortable parts out loud: He conceded that he had made mistakes on pricing and marketing Disney+. He said the recent layoffs had been necessary, however painful. He said Disney would make less Marvel and Star Wars content, and spend less on what it did make. He wants Pixar films to be cheaper. And he went so far as to take on the writers’ union, calling their expectations unrealistic, and “quite frankly, very disruptive and dangerous.” As my Puck partner Matt Belloni noted last night, Iger wasn’t necessarily wrong, but the optics weren’t great. “Iger, always a master of his own image, seemed to misplay the moment—even if he’s right about the dire situation,” Matt wrote. “He’s gotta know how each executive extravagance and tone-deaf comment has ricocheted around town and riled up the striking talent.”

Indeed, it has riled some of Iger’s current and former colleagues at Disney, as well, some of whom said they were stunned by how tone-deaf and unselfconscious he seemed against the backdrop of the privileged Sun Valley landscape. It didn’t help that The Wall Street Journal reported this week that he’s currently building an exact replica of his current 180 foot yacht, Aquarius, that’s 30 feet longer than the original. One Sun Valley regular suggested Iger had ascended to the “I don’t give a shit what anyone thinks” caste of moguldom. “He must have thought this week would be a coronation and vow renewal all in one surrounded by the mighty and moguls,” this person said. “Instead it’s a bargain basement fire-sale with the writers and actors rocketing him.”

On the one hand, Iger’s contract renewal is vindication of his unique status as a generational C.E.O., Disney’s most indispensable personnel asset, and apparently the only executive capable of guiding the historic company through this transformational moment, with well-coiffed hair and a steady hand.

On the other hand, many of the challenges Iger faces now are problems of his own making—you can’t blame everything on Bob Chapek—and even the repeated contract extensions point to his and the board’s inability to identify a worthy successor. Meanwhile, his willingness to “call it like it is,” as he put it, can also be read in different ways. Again, his diagnoses are not wrong, and many of his contemporaries appear to admire his willingness to grab the bull by the horns (at the very least, it makes their jobs easier). In the eyes of Hollywood and the WGA, of course, it’s a different story. Either way, as the aforementioned Sun Valley regular said, “It’s no small feat to replace Zaz as the Marie Antoinette of this disrupted moment.”