Inside Disney Drama as CEO Bob Iger Returns, Replacing Bob Chapek

TECHNOLOGY
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  • Bob Iger returned to Disney as CEO in November, ending Bob Chapek’s difficult tenure.
  • The move comes as Disney faces increasing financial challenges and likely layoffs in 2023.
  • Here’s everything you need to know about what led to Chapek’s expulsion and what’s next.

In one of the most dramatic turnarounds in corporate history, the board of Walt Disney Co. reinstated Bob Iger as CEO in November, ousting his predecessor Bob Chapek.

The return of Iger, who had already served as CEO for 15 years before Chapek took over, triggered a flurry of notes from Wall Street investors focused on the challenges facing Iger – Hollywood analysts and industry watchers have also examined Chapek’s difficult tenure. and his choice as CEO. 🇧🇷

Here’s a rundown of what led to the shift at the top of one of America’s most beloved companies, and the challenges that lie ahead for Iger in what was billed as a two-year tenure, from finding a new successor to fixing Apple’s streaming business. Disney and repairing the company’s relations with Hollywood.

What Went Wrong With Chapek And How Iger’s Return Happened

Iger’s return interrupted the tenure of his protégé Bob Chapek, who had spent less than three years in office. Insider reported that Disney executives complained to the company’s board about Chapek’s leadership.

Chapek’s fumbles were comprehensive. Disney had just reported a $1.5 billion loss on its streaming business in a Nov. 8 earnings call. Earlier in the year, the company faced criticism from customers over price increases at its theme parks. Separately, employees walked out in protest at Disney’s reluctance to take a firm stand against Florida’s “Don’t Say Gay” law.

Chapek also alienated creative executives and Hollywood by taking content budgets away from Disney’s creative executives and by releasing films streaming at the same time as in theaters during the pandemic; the move resulted in a high-profile legal fight with Scarlett Johansson and her representatives.

The company has also faced pressure from activist investors like Daniel Loeb to cut costs and make big strategy changes.

It didn’t help that Chapek, while considered an effective operator, was also seen as less charismatic and communicative than his popular predecessor. Wall Street blamed him for waiting until after the 3Q earnings call to announce layoffs were planned, for example.

More on Chapek’s tenure and Iger’s shock return:

Why Iger’s top priority will be a solid succession plan

Iger’s return reassured employees who knew the Disney vet, but it also drew criticism, considering his previous remit as CEO included finding and grooming his replacement. So there’s pressure on him to fulfill that task before his two-year contract runs out (although the board could always extend his contract again, considering he’s done so four times before).

During Chapek’s first year as CEO, Iger remained executive chairman of the company, and there were tensions between the two executives. The Wall Street Journal reported that Iger undermined Chapek’s leadership.

While many in Hollywood applauded Iger’s reinstatement, the move also drew criticism from some on Wall Street over Disney’s succession planning and questions about whether the company still has executives who could be primed to succeed him in two years.

More on succession at Disney:

How Iger Can Strengthen Disney’s Streaming Business and Control Costs

Iger returns to a streaming landscape that’s been more competitive since he left, with new entrants like Netflix’s ad-supported tier fighting for share in viewers’ wallets. Disney, which in December launched its own ad-supported Disney+ offering, has seen strong growth in streaming, but Wall Street is more concerned about profitability now.

Iger has already scored wins for Disney with acquisitions of Lucasfilm, Pixar and other companies, but he told Disney officials at a meeting in November not to expect any more big acquisitions. He also said the signing freeze announced by Chapek would remain in effect.

Rising to lead the company amid a difficult economic environment, Iger will have to deal not only with steep losses in Disney’s streaming business, but also with big decisions, such as seeking full ownership of Hulu, now partially owned by Comcast; how to manage content distribution on Hulu and Disney+; and whether to keep or sell ESPN.

Read more about Disney’s streaming business and merger and acquisition plans:

How a slow box office and talent demands will create new challenges for Iger

Iger wasted no time in making changes, firing Kareem Daniel – the executive who led distribution during Chapek’s unpopular corporate restructuring – and announcing plans to give more power to Disney’s creative executives.

But he also has to deal with a box office deal that has been marred by the pandemic and appease Hollywood talent still irritated by some of Chapek’s moves. Recent animation releases have flopped and there has been a slowdown in Star Wars releases.

Long considered one of Hollywood’s most successful CEOs, Iger will need to bring together all of his business acumen, cultural knowledge and management skills to lead Disney through a challenging economic landscape and transition the company into a strong new leader.

Read more about what Disney, Hollywood and Iger expect from Iger:

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