Disney has seen a sudden leadership change—with previous CEO Bob Iger returning and Bob Chapek out of the top job after a brief stint.
Key Details
- Disney announced late Sunday that CEO Bob Iger would return from retirement and replace the current CEO Bob Chapek, Iger’s hand-picked successor.
- He is returning immediately and will remain with the company for two years, searching for a successor, Axios reports.
- Iger resigned previously in June 2020 after 15 years of running the company. Chapek had just signed his contract in June for an additional three years.
- Disney’s stocks jumped 7.2% Monday morning following the announcement.
Why it’s News
Disney’s investors were surprised but happy with the decision to return the previous CEO to his leadership position. The company has faced Wall Street anxiety as its stock hit a 21-year low in November, following several years of dwindling box-office returns and lower revenue.
“The sudden replacement of Disney CEO Bob Chapek with his revered predecessor Bob Iger represents a shocking ending to a bitter power struggle that’s been building between the two executives for the past two years. The move marks one of the messiest corporate succession failures in recent memory. Iger’s return may satisfy anxious investors,” says Axios.
Investors and the public have grown sour on Disney’s TV and parks divisions can make up for ongoing streaming losses. Last week, Chapek announced layoffs and other cost cutting.
Iger’s leadership at Disney saw the company expand to its peak, acquiring major properties and studios including Pixar, Marvel, The Muppets, Star Wars, Indiana Jones, 21st Century Fox, and helping to launch Disney+ in November 2019.
This month, Disney says that it expects a weaker-than-expected fourth quarter, killing the growth from a year that saw record revenue in the theme parks. In the most recent quarter, the fledgling streaming business lost about $1.5 billion, double the loss from the year before.
Chapek says he expected that the streaming division would be profitable by 2024 as advertising revenue and monthly subscription increases were set to kick in soon—providing a major boost to revenue.
As a result of some of the poor financial showings, there has been outside investor pressure. Trian Fund, for example, recently bought nearly $800 million of Disney stock after the recent weak earnings report, says The Wall Street Journal. It’s expected that Trian will buy more along with exerting pressure for better performance.
In addition to financial pressures on Chapek, there are also cultural and political pressures against him. Under Iger’s previous leadership, Disney pushed back against Florida Gov. Ron DeSantis’ Parental Rights in Education Bill, which opponents referred to as “don’t say gay.” Under Chapek’s tenure, Disney at first took a step back from opposing these and other issues in the state. Chapek was criticized for not vocally opposing the bill, which says that “classroom instruction by school personnel or third parties on sexual orientation or gender identity may not occur in kindergarten through grade three.”
Notable Quote
“The board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the company through this pivotal period … We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic … Mr. Iger has the deep respect of Disney’s senior leadership team, most of whom he worked closely with until his departure as executive chairman 11 months ago, and he is greatly admired by Disney employees worldwide—all of which will allow for a seamless transition of leadership,” says board chair Susan Arnold.