The Walt Disney Company made the shocking announcement on Sunday night that effective immediately former chief executive officer Bob Iger would return to that position, replacing Bob Chapek.
The Walt Disney Company (NYSE: DIS) announced today that Robert A. Iger is returning to lead Disney as Chief Executive Officer, effective immediately. Mr. Iger, who spent more than four decades at the Company, including 15 years as its CEO, has agreed to serve as Disney’s CEO for two years, with a mandate from the Board to set the strategic direction for renewed growth and to work closely with the Board in developing a successor to lead the Company at the completion of his term. Mr. Iger succeeds Bob Chapek, who has stepped down from his position.
This news comes as a surprise on two levels:
Despite some speculation over the summer that Disney wasn’t going to renew Chapek’s deal, not only did Disney keep him, they announced a three-year contract that would’ve keep him in the job until 2025.
On top of that, there’s the fact that Iger is the person now replacing Chapek. Iger became CEO of Disney in 2005, and after several false starts at moving on or choosing a successor, finally passing the role to Chapek in 2020. Iger was done. Ready to move on.
And now he’s back. Wow.
Short of Walt Disney himself, Iger was the most pivotal leader in the company’s history. He replaced former CEO Michael Eisner at a time when Disney was struggling to produce quality animated films, had soured its relationship with Pixar Studios, and was often seen as a target for acquisition by other companies. During Iger’s tenure, he added Pixar, Marvel and Lucasfilm to Disney before capping his run off with the industry-reshaping acquisition of 20th Century Fox. (He was also smart enough to pass on buying Twitter.)
Chapek struggled to follow Iger, coming on board as the pandemic hit. He alienated stars like Scarlett Johansson and refused to stand up for the basic human rights of his employees.
Disney specifically notes that Iger will return for two years with the goal of finding his replacement (again). What happened here? What changed between this summer when Chapek was given a new multi-year deal and tonight?
"I am extremely optimistic for the future of this great company and thrilled to be asked by the Board to return as its CEO," Mr. Iger said. "Disney and its incomparable brands and franchises hold a special place in the hearts of so many people around the globe—most especially in the hearts of our employees, whose dedication to this company and its mission is an inspiration. I am deeply honored to be asked to again lead this remarkable team, with a clear mission focused on creative excellence to inspire generations through unrivaled, bold storytelling."
There was always the sense that Chapek was the wrong guy to follow Iger. While Iger worked his way up through the television side, Chapek was a parks guy. He wasn’t a creative guy. While Iger had the vision to mold a new Disney for the 2010s and beyond, Chapek spent his two-year tenure consistently rubbing employees, talent and customers the wrong way.
Disney blindsided Wall Street by reporting $1.5 billion in losses at its fledgling streaming division, up from $630 million a year earlier. Mr. Chapek said that higher Disney+ production, marketing and technology costs had contributed to the “peak” losses.
Disney shares dropped 12 percent the next morning, in part because investors — and many people inside Disney — were shocked by the happy-go-lucky tone that Mr. Chapek struck while discussing the earnings report on a conference call with analysts. Mr. Chapek’s demeanor struck many as tone deaf.
Chapek getting the boot is one thing. Iger returning, though? How did Disney convince him this was the right move?
There’s obviously more to this story, and I’m very interested to see what leaks out over the next few days.
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