Investors Cheer Leadership Shakeup at Disney
Shares in the entertainment giant climbed more than 9 percent in premarket trading on Monday following the ouster of chief executive officer Bob Chapek.
Iger in, Chapek out at Disney
Last December, Robert Iger told a Variety reporter he wasn’t second-guessing his departure from Disney after leading the entertainment giant on a 15-year run of growth and profits. Besides, he’d later acknowledge, Hollywood is going through an “age of great anxiety” with uncertainty at the box office and in the streaming wars.
Now, in a move that’s stunned Hollywood, Mr. Iger is back in the top job. Disney on Sunday night fired his handpicked successor, Bob Chapek, as C.E.O. The 71-year-old Iger has signed a two-year contract as his replacement. Jobs one and two for Mr. Iger: restore the company’s fortunes and groom a successor, meaning the “Game of Thrones”-like contest to find a replacement begins immediately.
The intrigue is where Iger may turn for the next leader, and what are his plans for Hulu, the streaming service in which Disney holds a majority stake. Dan Loeb, the activist investor, had been pushing Disney to combine Hulu with Disney+, the company’s own streaming service. Meanwhile on the succession front, Peter Rice, a top content chief at Disney, and Kevin Mayer, one of the architects behind the launch of Disney+, are no longer at the company. Will Iger try to bring them back?
Disney shares soared in premarket trading this morning, but are off by more than 40 percent this year. The stock is on its worst run since at least the 1970s, according to Bloomberg, tumbling by 22 percent under Mr. Chapek and wiping out roughly $35 billion in market cap.
Pressure has been building from activist investors, with Nelson Peltz’s Trian Fund Management joining Mr. Loeb’s Third Point in calling for big changes. (Mr. Peltz, though, doesn’t want Iger back, The Wall Street Journal reports. Reed Hastings, the co-C.E.O. of Netflix, meanwhile, wrote on Twitter that he wished Iger would have gotten out of Hollywood and instead run for president.) Mr. Iger had also seen enough, telling confidants that he was “devastated” by Disney’s decline, The Times’ Brooks Barnes reports.
Credit...The New York Times
Mr. Chapek’s tenure was marked by the pandemic and PR disasters. He took over Disney in February 2020, a few weeks before Covid-19 forced the company to shut down its theme parks. With people stuck at home, the company doubled down on Disney+, a strategy that worked well … until it didn’t.
On Nov. 8, Disney reported that quarterly losses at the unit had more than doubled to $1.5 billion and revenues missed expectations. Investors were mortified by Chapek’s sunny tone on a call following the results, and shares fell 12 percent the next day.
On the Hollywood front, Disney under Mr. Chapek was embroiled in a contentious pay dispute with the actress Scarlett Johansson, and Mr. Chapek fired his top TV content executive, Rice, sending a shock wave through the industry.
Chapek was also bruised by America’s culture wars, angering both employees and Ron DeSantis, the Republican governor of Florida, with his response to the Parental Rights in Education Act — or what critics call the “Don’t Say Gay” bill. Mr. Chapek sparked a staff uproar by not taking a public stand. When he eventually weighed in, it provoked a political backlash.
Mr. Iger had been away from the company for less than a year, having served as executive chairman through the end of 2021. He told Disney employees in an email of his “amazement” at being back. Just two months ago, he had joined Thrive Capital, the venture fund, as a partner, and the board of Genies Inc, a crypto avatar company. It’s unclear if he will remain at the companies.
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