The manager returns as Disney’s CEO.
(Photo: AP)
New York, Dusseldorf There is a surprising change of management at the US entertainment group Walt Disney: veteran Bob Iger is returning to the top of the company. The 71-year-old worked for Disney for four decades and was head of the company for 15 years. His successor, Bob Chapek, took office in 2020.
Disney said Chapek had resigned from his post without giving a reason. Disney CEO Susan Arnold said, “The board has determined that Bob Iger is the best person to lead the company at an increasingly complex period of industry change.”
In fact, Iger is taking over as CEO at a difficult moment for Disney and the entire entertainment industry. The general reluctance to consume as a result of inflation is likely to hit the group, which earns its money with amusement parks or streaming services, particularly hard. At the same time, revenues from the classic linear TV market are falling.
Iger has said multiple times that he’s not interested in a job at Disney. US media write that talks about his return only began a few days ago. In any case, Iger seems to be the right one for investors: In pre-market trading, the share rose by more than ten percent. Previously, however, the paper had lost almost 40 percent over the year, most recently falling to an annual low of a good $86.
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Streaming business as a problem child
Disney had reported record sales and profits in 2022 – mainly due to the strong and formerly Chapek-led theme park division, which benefited from the recovery from corona restrictions. The problem child, however, is the important streaming business. The three Disney services together now have more subscribers than the industry leader Netflix.
However, the division suffers from high costs due to the complex production of films and series. In the last quarter alone, this wrote an operating loss of 1.47 billion dollars (1.42 billion euros), which was twice as high as in the previous year. Chapek actually wanted to make the streaming business profitable by fall 2024.
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With the most recent quarterly profit of 162 million dollars, Disney then also missed the expectations of the stock market because the investment costs of the streaming business had a negative impact. Chapek then announced austerity measures such as a hiring freeze and job cuts. He also revised down the full-year sales growth forecast and warned that the profitability target would not be met.
Architect of the Disney group
Iger now has to solve these problems. He is considered the architect of today’s Disney Group. At the turn of the millennium, he put the dozing entertainment giant back on the road to success with a successful purchase program.
In his era, the company bought the animation studio Pixar in 2006, the lucrative comic company Marvel in 2009, Lucasfilm in 2012, which owns the rights to the “Star Wars” series, and the traditional house 21st Century Fox in 2019. Iger also oversaw the opening of Disney’s first theme park in the People’s Republic of China, the Shanghai Disney Resort.
The manager has resigned as CEO of the entertainment group.
(Photo: Reuters)
By the end of his tenure, Iger had completed preparations to enter the streaming business. Under his aegis, the entertainment group grew considerably: When he took over the CEO post in 2005, Disney sales were almost $32 billion, and in 2019 it was almost $70 billion. Today, the group stands at almost 83 billion dollars.
Both employees and industry experts are surprised at the change at the top of the group. In the summer, the company extended Chapek’s contract until the end of 2024. “I wonder if the board of directors overreacted,” said François Godard, an analyst at British consulting firm Enders Analysis, the Handelsblatt. Iger is unlikely to fundamentally change the operational strategy he has defined himself. Rather, the change at the top is likely to have personal reasons, according to the industry insider.
Strained relationship
US media reports confirm this view, according to which the relationship between Chapek and Iger is considered to be strained. Chapek felt patronized by his powerful predecessor. Iger continued in the role of Chief Overseer until the end of 2021 after stepping down as CEO. Iger only left this post eleven months ago. Now Iger is to lead the group again for two years. He said: “I am delighted that the Board has asked me to return as CEO.”
How things will continue for his predecessor remained unclear. “Chapek was clearly struggling to be accepted by the company’s creatives, and he got caught up in culture wars that he didn’t initiate or control,” said industry insider Godard.
For example, the manager acted awkwardly in public disputes with an actress about her pay. And when dealing with a Florida law that banned classes on sexual orientation in public schools through third grade, Chapek was hesitant to respond, only to protests from staff members. Iger, on the other hand, had criticized the law early on.
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