The decision by the Walt Disney Co. board of directors to reinstate Bob Iger as CEO, which surprised both Hollywood and the media, was made overnight, according to two people at the company.
A group of Disney’s top creative and business leaders had told the board in recent months that they were considering leaving the company if Bob Chapek, who took over as CEO in February 2020, stayed in the role, according to one senior person at Disney.
This person takes care of that The board realized that their CEO was simply not up to the task. after senior company executives repeatedly raised their grievances.
Chapek has been criticized internally — and by some industry peers — for being a leader who made big decisions without having enough information, according to Disney’s senior executive and other senior industry sources spoken to Business Insider.
The board’s decision comes just days after Disney reported a loss of $1.5 billion (approximately EUR 1,460 million at current exchange rates) in the direct sales division, which includes the services of stream Disney+, Hulu and ESPN+.
On November 11, Chapek also pointed to cost controls on content and marketing, as well as a hiring freeze and potential layoffs. Disney shares are down 10% over the past month and 41% so far this year. (Other stocks in the industry, both audiovisual and tech, have also taken sharp falls this year).
Meanwhile, Jim Cramer of the CNBCturned up the heat on his show earlier this month and called for Chapek’s firing after Disney’s final quarter.
Iger’s return comes after a senior Disney executive contacted the former CEO to ask if he would be interested in returning to his position at its Burbank, California headquarters, the senior Disney executive reveals.
Iger, 71, who ran Disney from 2005 to 2020 and has previously said in interviews that he was not interested in returning as CEO, eventually agreed.
The executive then shared Iger’s response the board, which concluded that it was time for another leadership change. In recent days, the board of directors — led by Chairwoman Susan Arnold — has been trying to put Iger back in the CEO seat, surprising Wall Street and Hollywood executives have been contacted by Business Insider.
“It’s like Howard Schultz came back to Starbucks,” said Richard Edelman, president and CEO of Edelman, which advises CEOs. “Bob Iger is one of the best leaders of the last decade. He has great political flair and the staff love him.”
The board’s change of heart is one of the most dramatic turns in the company’s history and puts the spotlight on Kareem Daniel, President of Disney Media and Entertainment Distribution (DMED), who has worked with Chapek for 20 years. Daniel and a handful of other top executives are expected to learn of their fate in the next 24 hours, a senior Disney official says Business Insider. More changes are expected for the week after November 24th.
Iger will take responsibility for the $1,500 million in losses stream And he’ll likely conclude that one of Chapek’s biggest moves — separating distribution, DMED, from content, Disney General Entertainment Content (DGE) — didn’t work, the senior Disney official says. The new structure Chapek instituted to get Disney to behave more like a tech company alienated creative executives, who lost control over budgets and the distribution of their projects.
A former Disney exec who has seen Chapek in the past two weeks describes him as “troubled,” although the current Disney exec says the CEO was full of confidence after being offered a new job with a 3rd prize by the board in June -year contract had been offered.
In the press release at the time, the board said: “Bob [Chapek] He is the right leader at the right time for The Walt Disney Company and the Board has every confidence in him and his leadership.”
“I can’t explain what the board did in June”Share with Business Insider Rich Greenfield, Partner at LightShed Partners. “But the management team and creatives don’t like Chapek or the management structure he imposed.”
Arnold is aware things weren’t going well under Chapek, the senior Disney official said, adding that creative and entrepreneurial executives have reached out to the chairman and other board members over the past few months to share their concerns.
The decision prompted a flurry of notes from Wall Street investors late Sunday that focused on the challenges Iger faces. In a recent interview, Iger pointed to the treacherous road ahead for the pay-TV business and hinted that a “world of pain” lay ahead.
Greenfield gives Iger some advice: “No more pay TV and cable”.
Iger’s contract is for the next 2 years and his priority will once again be to finalize the company’s succession plan. This time, Iger will have a new group of internal candidates: Dana Walden, who was promoted to DGE president by Chapek in June after the CEO ousted Peter Rice, and Josh D’Amaro, president of Parks, Experiences and Products, Disney. (Chapek ran the parks before rising to CEO.)
“I am delighted that Bob Iger has accepted and decided to return at a critical time for the company.”, secures Disney’s high position. “I know it will improve our performance and deliver what we need for both investors and our consumers, and that’s key.”