The Walt Disney Company board of directors announced it was firing Bob Chapek and reinstating Bob Iger immediately as the company’s CEO on Sunday. Though Chapek had signed a multi-year contract in June, he had a turbulent tenure and was under a lot of scrutiny. The move still shocked many in the industry.
Now, Iger is stepping in a much different Disney ecosystem. Matt Belloni believes Disney “[hopes] that Iger can sprinkle a little magic dust and make [the] company good again.” Can he? Belloni and Kim Masters discuss this latest news.
This segment has been edited for length and clarity.
Chapek’s culminating firing
Kim Masters: The Disney board stunned Hollywood Sunday night with an announcement that Bob Chapek was out as CEO and Bob Iger was returning.
The Bob Chapek tenure as CEO has been troubled. It's almost this litany of: the public fight with Scarlett Johansson over her compensation, that shouldn't have been so public. The problems with taking a position on the “Don't Say Gay” law in Florida. He did a total 180 saying he wasn't going to take a position and then there was a huge outcry and demoralization on the staff’s part. [Then] he took a position and Ron DeSantis, governor of Florida went after him.
One thing after another culminating in a very strange recent earnings call where the news was bad, but he sounded pretty chipper. [Then] he followed that up with this memo saying, “Oh, by the way, we are going to be cutting costs, laying off people, and freezing hires,” which he hadn't mentioned in the earnings call.
No goodbye note
Masters: Something pushed that board to the breaking point, and he was not just fired, but executed Sunday night. No goodbye note. No thank you for the opportunity to serve. The guy has been at Disney for decades, and this is what happened.
Matt Belloni: This is [going to] go into the all-time pantheon of executive firings because this was a combination of the man and the moment.
You can make an argument that nobody in that chair was going to be treated very well, given the fact that the stock had slid so much this year, down 40%, and that the entire premise of the streaming economy – which is, “Spend, spend, spend. Grow, grow, grow, and we'll worry about profits later” – has come under fire by Wall Street.
By the way, that is a strategy that Bob Iger himself had put in place.
Chapek was never on that same page
Belloni: Then there was the Chapek-himself stuff. He never felt like a perfect fit for this job. I listened to that earnings call and it was awkward. He was talking about inconsequential things like events at Disneyland, while the stock and the earnings were just giving analysts heart attacks. It just didn't seem like he was ever on that same page.
And now it's like “Back to the Future.” They hope that Bob Iger can sprinkle a little magic dust and make this company good again.
Masters: Following Bob Iger, who was one of the most respected and glorified chief executives/chairman in business, that's tough for anyone. Chapek was not that kind of smooth cashmere guy that Bob Iger is.
Who will succeed Iger?
Masters: Bob Iger screwed up succession, as some people are pointing out, and is now back, supposedly for two years, although it could be extended. The guy who postponed retirement four times. So he's back, and of course, everybody's going to be scrutinizing to see who is taking over in two years or more.
Belloni: That is going to be the big thing, is, who he elevates into a position that the observers and internally this person is perceived as an heir apparent. I think he [has to] do that quickly. Two years is not a long time. If he wants to put someone in the pole position there, he [has to] think fast. I'm betting he already has some ideas.
Masters: He may. Although he has in the past done a couple of people who seemed to be very much in line for the job.
The challenges Iger will have to cope with
Masters: Hollywood is a very [challenging] business right now. He is coming into the problems that Chapek faced. He faced the pandemic. He faced the whole streaming flip-flop of Wall Street. Some of that stuff is still real. The movie business hasn't fully recovered by any means, although Disney is very strong in that department. The diminished legacy earnings from things like broadcast and cable, that continues. Streaming is still losing money.
These are all challenges that Iger will have to at least begin to cope with, and I know the expectations are high.
Belloni: And the issue is that the company that he left is no longer the same company. It's not even three years later, but it's an entirely different ecosystem. In the interest rate issue, he can't just go out and buy stuff like he used to because interest rates are so high, so he needs a new strategy for the new Disney.
Masters: Well, maybe he will sell.