Looking for an in-depth report on why Disney brought back Bob Iger to replace Bob Chapek as CEO?
Alex Sherman has that for you today with his post on CNBC, Disney’s wildest ride: Iger, Chapek and the making of an epic succession mess. It is well worth any curious Disney fan's time to read.
Sherman's piece reinforces my long-standing opinion that Chapek was a perfect candidate for Chief Operating Officer of a company such as Disney, but a tough fit as its Chief Executive Officer. That's not to say that someone like Chapek could not be a CEO. Indeed, save for one mistake, Chapek could have pulled off the job and retained it today.
Full disclosure: As editor of Theme Park Insider, I enjoyed several opportunities to speak with Chapek over the years, including in one-on-one conversation. He and I both went to the same graduate school, though I did not meet him until he took over as Disney Parks Chairman. But I always found him to be open and earnest in conversation.
I do not want to appear to psychoanalyze him, as I have no qualification to do that. But in speaking with and reporting on him, I recognized in Chapek some personality traits that I have found in myself over the years, including:
Perhaps that's why I enjoyed speaking with him, but - let's face it - that's not exactly a job requirement for running Disney.
Yet those traits came into play as Sherman details a long series of decisions and actions that led to Chapek's dismissal last November. Three conflicts stand out. First, Sherman reports that Chapek wanted to furlough Disney Parks cast members as soon as Walt Disney World and Disneyland closed due to Covid-19 in March 2020. Iger talked him out of that decision, which surely would have torched whatever goodwill Chapek enjoyed from cast members at the time.
But Iger could not dissuade Chapek from choosing to sit out the battle against Florida's anti-LGBTQ+ legislation, a decision that led to widespread blowback from cast members and fans. Of course, that conflict turned out to be a no-win for Disney, as Chapek's late decision to oppose the legislation led to Gov. Ron DeSantis' (okay, alleged) retribution campaign, including the dissolution of the Reedy Creek Improvement District, which Disney, under Iger, now has challenged in court.
Chapek's bungling of the Florida situation nevertheless burned his goodwill from others within TWDC, leaving him no hope to survive the third conflict - a big miss on corporate earnings in late 2022. Chapek lost the last of his support then, leading to Iger's return.
Yet, despite the acclaim it won at the time, that switch did not solve all of Disney's problems. The company's stock continues to fall, and Sherman details several of the challenges still facing Disney under Iger. Ultimately, I think those challenges trace back to the entertainment industry's collective failure on streaming - an issue with its roots in the development of the public Internet a quarter century ago and that has led to the strikes that have crippled movie and television production today. (I will have more to say later on the streaming issue as it pertains to Disney and Universal.)
As theme park fans, many of us view Disney within the context of its theme parks. So it can be helpful to get a look at the company beyond the parks to understand why changes happen at the top. If you have thoughts on Sherman's story, please share them in the comments.
Good post, @the man.
Iger appreciates that Disney is different from other companies, and has an obligation to put creatives first if they want to continue succeeding as they have. Chapek is a right-winger who could care less about creatives, and was more than happy to hang Disney's LGBTQ+ community out to dry. In just over a year he eroded Disney's goodwill at an unbelievable rate. No small irony that it was the actions of a right-wing dude that put the right in such a tizzy.
As for selling Disney to Apple: it would be the death of Disney. Apple rules with an iron fist and is long past the idea of caring about anything but the bottom line. Selling to Apple would be like putting 1000 Chapeks in charge of the Company, whatever lifeforce Disney still retains would be instantly quashed.
Don’t think for a second that Iger would have done anything differently about the Florida legislature than Chapek did. He is a businessman first and foremost who needs to answer to the shareholders rather than it’s cast members.
False, Iger did so something differently, and immediately posted his opposition to the hateful Florida law. He would have done the same as CEO (did you read the article?), and while he might have engendered the same boneheaded response from DeSantis, he would have at least had the Company behind him, and the integrity of being consistent.
When little Ron chills out or gets voted out, Iger will quickly move to resolve the conflict.
And Disney is going broke for it…bye, bye. Long live Capt. Ron!
Disneys problem isn’t “wokeness”.
The exact same problem they had the day before Pixar walk them through the door - bad movies, and tons of sequels flooding the market, except now the problem is bigger
Marvels now at a state where only the most die hard of fans can keep track of the cast list, never mind the meta plot between movies - and with the door opened to Fantastic four, Xmen and Deadpool that’s a problem that is likely to get worse before it gets better.
With Star Wars I hoped they’d learned the lesson with Solo, apparently not as instead of a flood of movies, we now have a flood of even longer TV series.
You can already see though the biggest difference between this time and last time. Last time it was direct to VHS cheapquels like Return of Jaffar, and Saturday morning cartoon sized budgets (I must admit I did like the Aladdin series), now it’s AAA sized budgets and productions.
And unlike last time the tent poles of ABC and ESPN can’t carry them. Broadcast channels is widely accepted as a format with a limited lifespan, and although live sport is somewhat resistant to that, ESPN I understand hasn’t been performing.
Last time it took Pixar to right the ship. But even they are seeing the same problems of more product, more sequels, and the audience doesn’t appear to be responding.
I don’t think you get another Pixar. For all the rumours of Apple linking up with Disney, if it was ever going to happen, it would have under Jobs, and much of what Disney does, apple isn’t interested in.
I hate to say it, but some level of rationalisation is needed. Disney is one of the most poweful brands there is, people will always want access to their archive, Disney+ will always have an audience even if it just pears back to “classic and modern childhood nostalgia”. A Disney/Pixar animation studio pared down to produce less (but better), the parks, even the cruise line together has no reason why it can’t be a solid consistent earner even if it doesn’t do crazy growth.
Everything else - ABC, ESPN, the Fox properties, maybe even marvel and Lucasfilm, spin or sell those and get back to basics. The audiences love of Disney is what to bank on.
Nope.
Next.
thecolonel, did you forget Iger was at the helm when the protests in Hong Kong broke out in 2019? And when asked to give his opinion about them, he said "What we learned in the last week -- we've learned how complicated this is...The biggest learning from that is that caution is imperative. To take a position that could harm our company in some form would be a big mistake. I just don't believe it's something we should engage in in a public manner."
In other words, who cares about human rights when it puts our profits at stake?
It was easy for Iger to speak out against DeSantis when he was relaxing in retirement. If he was still CEO at the time, I have no doubt he would have continued to give the same "gotta stay neutral, can't harm our company's revenue" PR speak.
The article was published by Comcast-owned CNBC.
Is the implication that Kabletown is attempting to take down their major rival Mouse by siccing Alex Sherman on a wounded Mouse? That's as difficult to believe as the far right talking points put on repeat by TPI's resident troll. Mr. Sherman's article appears to be well researched and matches up with what we know to be true.
Anyhoo, I think Disney's struggles in transitioning from cable to streaming are fixable. If the Hulu deal gets done this month I would like to see that service take the forefront in Disney's streaming portfolio with D+ a pricey add on option catering to Disney fanatics who have to have Disney, Marvel, Pixar and Star Wars TV shows and movies as soon as they are available. Continue partnerships like Hulu has with the Showtime add on service. Hopefully the pushed up negotiation window shows that Iger realizes the value of Hulu and won't kill it off by relegating the streamer to a Disney Plus button.
@Zarex, I live in the UK where non Disney content (legacy fix content) is already on Disney Plus, albeit behind the “Star” subbrand.
I would suggest that having content such as the M*A*S*H movie, and other clearly adult only fairy on Disney Plus weakens, not strengthens the Disney brand. There’s an association of Disney = whole Family Friendly (it’s been in their DNA since at least Walt saw his kids on the Carousel), and if Disney isn’t that anymore… what is it?
Disney doesn’t care about families anymore, why else would they support attacking children (in the schools) and pushing woke ideology?
@Chad H, my thinking is not that non family friendly content should be added to Disney Plus, but that Hulu should be the Mouse's flagship streaming service with the family friendly Disney Plus available as a add on. It's pretty much the opposite of what we have been hearing, that Hulu will end up as a button on the Disney Plus home page. I think that is bad idea and weakens Disney's most successful streaming service.
Keith Schneider, you're a sad little troll.
And what are you going to do about it thecolonel, besides lie, cheat and steal like all the other facists/democrats?
DeSantis’ polls are in competition with Disney stock at which can fall faster.
Keith.
Supporting kids to be who they are is the opposite of attacking them.
ChadH.
Supporting kids to be who they are (little boys and girls and not sex objects for far left liberals) is the opposite of attacking them (done without their parents consent or knowledge).
Interesting article by Alex Sherman. Thanks for posting the link, Robert. After reading it, I'm of the opinion that Iger is largely at fault for the situation, and the problems of righting the ship at Disney and finding an effective successor are well beyond his abilities. Not that he hasn't been a good leader in the past, but the corporate culture at Disney that have evolved under his tenure as well as the drastic changes in the market conditions present a situation that few if any could navigate effectively.
My predictions for the next five years for Disney:
1. The losses continue for the next 2 years despite Iger's best efforts.
2. Disney stock will continue to decline.
3. A shareholder revolt/lawsuit will result in Iger re-retiring in 3 years.
4. A placeholder CEO will be installed to conduct a fire sale of Disney assets.
5. The placeholder CEO will be fired after two years for not being "Disney nice."
6. All of the reforms started by Iger and carried out by the placeholder CEO will start bearing fruit as a young CEO from within the ranks of the Disney corporate structure takes the helm and gets acclaimed as the "savior" of the Disney brand.
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The sad reality is that Chapek was an awful leader who only cared about meeting arbitrary short term metrics at the expense of making real long term investments, and even when he did make big investments they were geared towards a minority of super high net worth people.
It was immediately noticeable when he took over Parks and Resorts from Tom Staggs as all of a sudden there were tons of half a**ed horrible upsells that starting popping up all over the place. Cabana's (AKA tents) in the theme parks, Harambe Nights at DAK, Villain's Mix and Mingle at DHS, pay money to ride the bus past security and get dropped off in the park, cupcake parties for all of the fireworks shows, etc. And his pathetic use of the teleprompter...I mean all Disney execs do it, but Chapek was so bad at it lol.
Sadly for the company Iger saw that the parks were all of a sudden more profitable under Chapek than under Staggs and decided to promote him to CEO, but the reality was the reason they were more profitable was because he was doing major cuts and upsells for short term revenues at the expense of the long term reputation of the company. Iger should have seen past this and made a big mistake and it was not surprising at all that they did not get along after Chapek became CEO.
BTW I don't view Iger as some great saint like many do either. He could easily get rid of individual lightning lane if he wanted to, the ridiculous overuse of IP where it doesn't belong is his strategic priority, lack of creativity at the studio with horrible unnecessary remakes over and over again, etc. There is no question though at least the people that work for the company and its investors at least trust Iger more than they did Chapek.
I think Disney and Iger have an unhealthy co-dependency problem over the years. The stock is down over 50%, still doesn't pay a dividend even though the parks business had record profits and carried the company post covid, and Iger is 72 years old. They badly need new management. I don't think someone from outside the company would be a good idea because the Disney culture really is a lot different from any other company and needs someone that knows how to navigate that, but i'm sure there are "inside outsiders" somewhere who have lots of experience with the company but don't like what they have been seeing and can turn it around. Like Iger was to Eisner in 2005. Now that they brought Tom Staggs back as a consultant maybe that was step 1 in a return to the company and that would be a great move.
(Also on a semi related note i'm personally getting great satisfaction out of seeing ESPN having so many problems recently. What was once one of the biggest cash cows in corporate America got completely pwned because of straight up terrible leadership and management. You get much better analysis from random guys in their basement with no money than you get from ESPN. /semi related rant).