Bob Iger returns to Disney to save a battered company – The Hollywood Reporter
While top executives Dana Walden and Craig Erwich are expected to spend their Sunday evening enjoying the AMAs, followed by an Elton John farewell concert at Dodger Stadium, a news release. great that Bob Iger will be returning as CEO of Disney while Bob Chapek has gone all over Hollywood. a thunderbolt (both Walden and Erwich disappeared from the AMAs shortly before a company-wide email was sent to Disney employees). Insiders say very few people at the top knew that the announcement was coming.
It’s an eventual victory for Iger, though of course he inherits the same nasty problems that plague all legacy media companies as their longtime revenue streams dwindle. and the move to streaming continues to be a loser while attracting less and less Wall Street.
An industry source said the Disney board has been split over keeping Chapek in place over the past few months. According to this account, his performance on the most recent earnings call earlier this month, was the deciding factor.
Sources say the deal to bring Iger back was quickly done over the past week. While many questions remain, it seems certain that Iger will scrap the reorganization plan Chapek had implemented, which effectively shifted purse power from Iger’s creative executive team. to Chapek’s trusted lieutenant, Kareem Daniel. Chairman of the Board Susan Arnold noted in a statement that Iger is “deeply admired by Disney employees around the world…which will enable a smooth leadership transition.”
Hollywood Reporter have reached out to both Iger and Chapek for comment.
To be fair, Chapek has never won such widespread admiration. Despite being a longtime Disney executive, he is unknown to the wider entertainment community. Early missteps – including a messy public conflict with Scarlett Johansson over compensation and a public refusal to denounce Florida’s “no gay talk” law were quickly reversed following dramatic outcry. staff paralysis – did not build trust. Although Iger has not commented publicly on Chapek, he has made some of his points – such as when he tweeted his own protest against Florida law while Chapek was still trying to avoid taking on a some location.
For the past quarter, Disney missed analysts’ expectations for more than $1 billion in revenue, while also missing earnings per share (EPS). The company also disclosed a significantly larger-than-expected loss of $1.5 billion in its direct-to-consumer business, more than double its loss year-over-year. Chapek and CFO Christine McCarthy (an Iger holder) told analysts they expect the segment to turn profitable starting in fiscal 2024.
While Disney+ continues to add subscribers at an astounding rate, far exceeding Wall Street’s predictions, average revenue per user (ARPU) continues to decline as consumers buy less-than-lifetime options. more beneficial.
And while Disney’s parks and consumer products businesses are still thriving — Chapek said the parks business had its best year ever — the extent to which those profits spurred on by price hikes and extra sales like Genie+ has alienated some fans and alarmed some analysts who fear the company could make its parks more accessible to the public. middle-class families, which could hurt the company in the long run.
It is clear that even before Iger left the facility at the end of December 2021, he was not satisfied with Chapek’s selection as CEO. But in June, the board renewed Chapek’s deal. However, it was a qualified endorsement as he was given a two-year extension but not signed a new three-year contract.
In his last official appearance before the Disney board and top executives, Iger delivered a fiery speech about the importance of creativity that many in the company understood as a blow. lash out at Chapek. “In a world and business inundated with data, it is fascinating to use data to answer all of our questions, including creative questions,” he said. “I urge you all not to do that.” He noted that if Disney had relied too much on data, the company might never have made big, groundbreaking movies like Black Panther, coconut and Shang-Chi and the Legend of the Ten Rings.
Chapek’s last email to all employees on November 11 was about the creation of a “cost structure task force” consisting of himself, McCarthy, and general counsel Horacio Gutierrez, who would “bring to the next level.” make the key overall decisions needed to achieve our goals”, including potential people. layoffs and a “rigorous review” of the company’s content spending. It is not yet clear what will happen with those plans.
In an on-stage interview at the Paley Media Center in New York on November 9, during his final public appearance as CEO, Chapek talked about balancing respect the past with the desire to seek the future. “If we just rigidly adhere to that old model, we know what will happen, right? You become extinct,” Chapek said. “And so our challenge inside Disney is to always try to respect the past, keeping as much of it as possible. But when consumers tell you it’s time to move on to something new and fresh, you have to embrace that cue.” —additional reporting by Lacey Rose
