Disney lost $1.5 billion under Bob Chapek. They’re now betting on Bob Iger

Written by Danielle Chiriguayo, produced by Marcelle Hutchins

During its last earnings call, Disney announced it lost $1.5 billion in a quarter on streaming. Photo by Shutterstock.

Bob Iger is returning to Disney as its CEO. He replaces Bob Chapek, who took on the role in 2020. The shakeup comes after the company’s board of directors ousted Chapek on Sunday. The move is effective immediately. Iger served as Disney’s CEO for 15 years and stayed on as executive chairman while helping his successor settle in. 

“Iger was out there saying negative things about a guy that he handpicked to succeed him, which is somewhat unusual in the CEO world,” says Matt Belloni, founding partner of Puck News. “He was doing meetings with investors, which is something that you typically do when you are running a company, not when you previously ran a company. So I didn't know this was going to happen. But the tea leaves were all there. And it now makes perfect sense what was going on.”

Belloni says Chapek has had a rough time in his role as CEO. 

“There have been rumblings for a while back this summer right after Chapek was renewed. And even before that, it just wasn't a good fit. He had stumble after stumble. He got into a fight with the Florida governor. He got in a fight with Scarlett Johansson. He was not as respectful to the creative community. He had no creative experience. And this was one of those things that had been gurgling, gurgling, gurgling, and then all at once.” 

The final straw came during Disney’s latest earnings call, when the company announced it lost $1.5 billion in a quarter on streaming. Belloni says Chapek was talking about how good the company was doing elsewhere and didn’t focus on the losses. Two days later, Chapek announced layoffs and panic ensued. As a result, the board and the people he worked with lost confidence in him. 

Belloni says other companies are also struggling with streaming. Initially, companies rushed to gain as many subscribers as possible. But he points out that Wall Street says that won’t help profits or make a major impact.

“I call that the great Netflix correction. All of these companies have pivoted to become largely streaming companies because they wanted those tech-oriented valuations by Wall Street. Now, it’s a new game. These analysts are looking at profitability, not just subscribers, and Disney streaming service has one of the lowest revenue per users of any of them. They've got to fix that.” 

As Iger returns, his priority will include finding a new Disney CEO and mapping out a strategic course for the company.