Bob Iger has replaced Bob Chapek as Disney’s CEO, a shocking turn of events for the world’s largest media company that has been in turmoil ever since Iger stepped down as CEO in February 2020.
The shakeup that caught the entertainment industry and Wall Street mostly by surprise was confirmed by Disney’s board of directors late Sunday. There had been rumblings of a shakeup in the C-suite but the prospect of Iger returning to the CEO job still seemed far-fetched. The turnabout recalls a situation a generation ago at Apple in 1997 when Steve Jobs returned to the helm of the company he co-founded after 12 years in the wilderness. Iger was out of power as CEO for a little under three years.
Disney stock jumped 8% in pre-market trading to $91.80/share early Monday morning in response to Iger’s stunning reinstatement. It comes less than two weeks after the company reported its lowest closing price for Disney shares in more than two years as the media conglomerate’s quarterly results fell short of Wall Street expectations.
“We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic,” said Susan Arnold, chairman of Disney’s board of directors. “The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period.”
The news came as a shock to even the most senior Disney executives, industry sources said. Staffers learned of the stunning reversal in the press release emailed by Disney’s corporate communications team. The first reaction from a number of employees reached by Variety was skepticism that it was some kind of phishing scam or internet hoax. The shock was even greater as the news was confirmed and the stranger-than-fiction reality sank in.
A number of top Disney leaders were attending a pre-show reception at Dodger Stadium tonight for Elton John’s farewell show, which aired as a live stream event on Disney+, as the news broke around 6:45 p.m. PT. Disney and ABC executives were also out in force at the Microsoft Theater in Hollywood for ABC’s live telecast of the American Music Awards. Anecdotal reports indicated that there was an exodus of top brass from the cushy seats at Dodger Stadium and the AMAs around the time the email landed in the inboxes of Disney’s 190,000 employees worldwide.
Chapek’s ouster comes on the heels of a third-quarter earnings report that spooked Wall Street as spending on content and marketing for Disney’s direct-to-consumer platforms hit its projected peak of $1.5 billion in fiscal 2022. Even though Disney had previously guided Wall Street to losses of that scale, and even as Disney+ posted subscriber growth for the quarter, the river of red-ink still took a toll on Disney’s stock price. Shares fell well below the $100 mark, to $90, on Nov. 9, the day after Disney’s after-market earnings report.
Iger’s stealthy return to the top adds a dramatic finish to the soap opera that has captivated Hollywood for the past few years. Iger, given his storied 15-year run that transformed Disney through acquisitions and great ambition, would invariably cast a large shadow over his successor. But in this case, there were reports of Iger vs. Chapek tussles almost from day one.
“I am extremely optimistic for the future of this great company and thrilled to be asked by the Board to return as its CEO,” Iger said in a statement. “Disney and its incomparable brands and franchises hold a special place in the hearts of so many people around the globe—most especially in the hearts of our employees, whose dedication to this company and its mission is an inspiration. I am deeply honored to be asked to again lead this remarkable team, with a clear mission focused on creative excellence to inspire generations through unrivaled, bold storytelling.” (Variety)