Disney Replaces Bob Chapek with Bob Iger as CEO!
Disney has pulled off a classic Bob Swap, replacing Bob Chapek with once former and now current CEO Bob Iger. Yes, you read that correctly. No, this is not an early April Fool’s Day joke—but perhaps it is an early Christmas present! This post offers our commentary about what this does and does not mean for Walt Disney World, and what led to the ouster.
Let’s start with the official press release, in which the Walt Disney Company announced that Robert A. Iger is returning to lead Disney as Chief Executive Officer, effective immediately. Iger, who spent more than four decades at the Company, including 15 years as its CEO, has agreed to serve as Disney’s CEO for two years, with a mandate from the Board to set the strategic direction for renewed growth and to work closely with the Board in developing a successor to lead the Company at the completion of his term. Iger succeeds Bob Chapek, who has stepped down from his position.
“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 the Board. “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.”
“Iger has the deep respect of Disney’s senior leadership team, most of whom he worked closely with until his departure as executive chairman 11 months ago, and he is greatly admired by Disney employees worldwide—all of which will allow for a seamless transition of leadership,” Arnold said.
The position of Chairman of the Board remains unchanged, with Arnold serving in that capacity.
“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. “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.”
During his 15 years as CEO, from 2005 to 2020, Iger helped build Disney into one of the world’s most successful and admired media and entertainment companies with a strategic vision focused on creative excellence, technological innovation, and international growth. He expanded on Disney’s legacy of unparalleled storytelling with the acquisitions of Pixar, Marvel, Lucasfilm, and 21st Century Fox and increased the Company’s market capitalization fivefold during his time as CEO. Iger continued to direct Disney’s creative endeavors until his departure as Executive Chairman last December, and the Company’s robust pipeline of content is a testament to his leadership and vision.
In an email to employees and Cast Members, Iger revealed he was returning to the company. “It is with an incredible sense of gratitude and humility—and, I must admit, a bit of amazement—that I write to you this evening with the news that I am returning to the Walt Disney Company as chief executive officer,” he wrote.
According to the Wall Street Journal, several top Disney executives first learned the news that Bob Iger was returning as CEO via that email–with a few wondering if it was the result of a hacked account. Some of these executives were together attending an Elton John concert at Dodger Stadium in Los Angeles that was streamed live on Disney Plus. Chapek was expected to attend the concert and the company had planned for him to introduce Elton John on-stage, but that did not happen.
While being fired (sorry, “stepping down”) had to be a pretty big bummer for Bob Chapek, missing out on the chance to introduce Elton John at Dodger Stadium had to be a close second on the disappointment scale. If I in a position of strength negotiating my multi-million dollar severance package for a company that wanted rid of me, I might’ve pressed to be fired (sorry, “stepped down”) after that concert. That’s just me as someone who loves good music, though. Bob Chapek is probably more of a Justin Bieber fan.
But I digress. Also according to the Wall Street Journal, negotiations between Iger and Disney’s board of directors to return as CEO were initiated only in recent days. It’s unclear what convinced Iger to return, as he’s publicly stated on at least two occasions over the last year that he isn’t interested in returning to Disney.
In fairness, these denials have been about as convincing as a politician who has already established an exploratory committee claim that they have no intentions of running for president “at this time.” As with that, the time’s have changed since Iger issued those “vehement” denials. (On a related note, it’s also possible Iger has realized he doesn’t have an appetite for, or future in, politics.)
If you’ve followed the “Battle of the Bobs” that we’ve been documenting over the course of the last couple years, this “surprise” Bob Swap™️ (coming soon to Disney+ or perhaps another book by James B. Stewart) actually should NOT be so shocking. In fact, we’ve written repeatedly since February 2020 that Bob Chapek was likely brought in to fulfill a specific role, acting as a hatchet man to make unpopular decisions that were necessary fiscal austerity measures when times were tough.
Our position has been that Bob Chapek was a placeholder CEO–the one who would do the dirty work and help Disney emerge from a time of crisis as a stronger and leaner company. That it was likely even Chapek knew the score, and what he’d have to overcome in order to have a legacy and tenure on par with Bob Iger or even Michael Eisner.
We became even more confident in this prediction in the year after Bob Iger stepped down as CEO. During that time, there was nearly nonstop palace intrigue about the tensions between Bob Chapek and Bob Iger. Only a couple months after he stepped down, there were credible reports that Bob Iger reasserted control at Disney after riding off into the sunset.
It didn’t stop there. Variety published a story titled “Disney’s New World Order Leads to Confusion and Bruised Egos.” Since then, there have been several more articles about the tensions between Bob Iger and Bob Chapek. All of this was exacerbated by the bombshell Black Widow lawsuit filed by Scarlett Johansson against Disney, with insiders blaming CEO Bob Chapek for the handling of that embarrassing incident.
As recently as this spring, there were reports that the Bobs rarely talk–with some media insiders claiming they weren’t even on speaking terms. It almost certainly didn’t help that Iger took an early public position on the controversy in Florida, which was at odds with Chapek’s initial (but not final!) response. That made headlines for weeks, and culminated in Florida passing bills to dissolve Walt Disney World’s Reedy Creek Improvement District. Books (plural) will someday be written about this saga.
With that said, I’ve gotta be transparent rather than taking a victory lap: my confidence in the assessment that Bob Iger would return to helm the Walt Disney Company was shaken once he relinquished his role of Executive Chairman and actually left. My expectation was that he’d also extend that, and continue waiting in the wings.
It was a similar story when the Walt Disney Company’s board of directors extended CEO Bob Chapek’s contract for three more years earlier this summer. That was likely a show of confidence for investors after Chapek’s stumbles with Florida and numerous other unforced errors–and done with the realization that there were no better options short of a hail mary to bring back Bob Iger, Kevin Mayer, or Tom Staggs. It was still somewhat surprising, and cast serious doubt on predictions of Bob Iger returning. Honestly, I thought it closed the door on Iger’s future with Disney.
Then the last couple few weeks happened. The first (recent) red flag for me was Chapek’s session with the Wall Street Journal. While most fans focused on the substance of what he had to say, what I found more striking was his demeanor, erratic and contradictory statements. Notably, he ended by claiming he “can be teflon” and his own feelings aren’t important when it comes to fan criticism, saying so in about as defensive and wounded way as possible.
Only a couple weeks later, Chapek delivered the fiscal fourth quarter results, and offered optimistic commentary that Wall Street investors called divorced from the actual results and forward-looking guidance. As a result of the misses on earnings, revenue, and the lowered earnings forecast, Disney stock plummeted over 13% to close under $87 the following day.
Wall Street analysts and investors had criticism for CEO Bob Chapek and his stewardship of the company, with many downgrading the stock or slashing target prices, and CNBC television personality Jim Cramer calling for Chapek to be fired (repeatedly).
With that, it seemed that the chorus had grown to loud for the board of directors to ignore. Rather than continuing to weather tone-deaf decisions and clumsy communications, something had to be done. However, with all previous potential successors unceremoniously exiting Disney, that left only an outside candidate or…Bob Iger. And so the king has returned.
To be fair, we’ve also expressed plenty of disappointment that Bob Iger stepped down so abruptly right before the pandemic reached America and the resulting economic fallout ravaged the company. We’ve speculated that Iger was privy to non-public information, or at least had better insight into what was about to happen domestically given Disney’s business dealings in China. (This isn’t intended to sound conspiratorial—many multinational companies knew the writing was on the wall before things got bad in the US.)
From the outside looking in at the time—and with the benefit of hindsight—it sure seemed like Iger was cutting and running before times got tough in order to preserve his legacy. A legacy that, had he not returned, should’ve been appended with an asterisk about his lack of succession planning and the debt with which he saddled Disney thanks to the 21st Century Fox acquisition and launch of Disney Plus.
With that said, I’m happy about Iger’s homecoming to Disney and am excited to see his actual “final act” as the Walt Disney Company’s CEO. I was skeptical about how much he paid to acquire 21st Century Fox at the time, comparing it to the deals ESPN made with various leagues that became an albatross years later as the media landscape changed. However, I also noted that you should never bet against Bob Iger when it comes to M&A decisions.
You would’ve lost multiple times over betting against Iger, as he was previously “undefeated.” (It’s like doubting James Cameron—no matter how odd or bad the idea might seem, he has better vision than you or I.) Eventually, it’s likely that Iger will be vindicated with Fox just like he was with Pixar, Marvel, Star Wars, and all of the lower profile companies Disney bought during his tenure.
Now, Iger will also return as investors are reevaluating streaming, pent-up demand at the parks is fizzling out, and we’re on the precipice of a recession or economic downturn. (Already, Iger is receiving a vote of confidence from Wall Street as it anticipates a strategic redirection–shares of $DIS are up about 8% in premarket trading today–it’ll be interesting to see where the stock closes.)
This will be the first time since the early days of Iger’s (original) tenure that he’ll be tasked with dealing with economic headwinds. It should be another true test of his chops as one of the world’s most highly regarded executives, as cleaning up Chapek’s messes (and by extension, Iger’s own past mistakes) will be an even bigger challenge than undoing the damage of late-stage Eisner. Depending upon how quickly he can right the ship, Iger may still have a deal or two left in the tank–video games and social media are two notable ‘holes’ in the Disney empire, and acquiring another streamer (or at least full ownership of Hulu) is also possible.
However, Walt Disney World fans should not overestimate what’s in the purview of the Walt Disney Company’s CEO. Bob Iger is not going to come in this holiday season and give the gift of Disney’s Magical Express, free FastPass, unlimited Park Hopping, Annual Pass sales, reservation-free visits, lower prices, or the Disney Dining Plan.
Many of the unpopular decisions among Walt Disney World fans that have been made since Bob Chapek became CEO would’ve occurred regardless. A good number of things people blame on Chapek were well below his pay grade–he likely had no clue about them in the first place.
Beyond that there are other reasons reviled decisions would’ve happened regardless. That this was and is the trajectory of the theme park business, certain decisions were initiated while Bob Iger was still CEO, or due to changing circumstances–staffing shortages, pent-up demand, pandemic losses, increased consumer spending, etc.
Given the comedy of errors and how bad the last couple of years have been for the parks, it’s easy to forget that Bob Iger was also at the helm making unpopular decisions in 2019 and earlier. None of this started with Chapek, it just got much worse…and in a hurry!
Not to belabor the point, but a good example is paid FastPass. This was an inevitability at Walt Disney World for years before it came to fruition. Long before the closure and suspension of FastPass+ we warned readers that would happen and urging people to prepare for this day. The writing was on the wall for almost 4 years, with the first trial run being offered to Club Level guests. During that time, Disneyland launching MaxPass to great success, and other parks sold FastPass bundles.
Then came the announcement of the Genie app for Walt Disney World while Bob Iger was CEO. While pitched vaguely, the purpose of Genie was to up-sell guests and assist in crowd management. There was no other reason for the company to invest in yet another new app unless it will offer direct ROI.
If that’s the case, you might wonder why we’re happy to have Bob Iger back as the Walt Disney Company’s CEO. (And we very much are happy! We’re also just realists about his mandate, likely limitations, etc.) There are actually a lot of reasons, but I’ll boil it down to a few: stability, attention to detail, and care for the creative legacy of the Walt Disney Company.
The “unfortunate” angle of this news for me personally is that it renders obsolete a halfway finished article I was writing titled: Bob Chapek Doesn’t ‘Get’ Disney. You’re probably better off not having read that, as it said in 2,000+ words what the title says in 5. In a nutshell, Chapek seemed wholly unconcerned with legacy of Walt Disney and what made the 100 year old company so special, unique, and distinct from any other Fortune 500 corporation.
To that same point, Chapek came across as indifferent to creatives and the storytelling process. This isn’t just idle speculation. We have heard from countless employees and high-level Cast Members that Chapek was clueless and did not care. Although often mischaracterized as a theme parks guy, consumer products was his actual forte.
This was hardly a secret–plenty of former (and a few current) Imagineers have expressed exactly this sentiment publicly and did so while Chapek was still gainfully employed. Now that Chapek is powerless, even more are coming out to celebrate his downfall. These same individuals still rave about Eisner and have had positive (or at least not negative) things to say about Iger. The former is beloved for his years with Wells, while Iger is routinely praised as empowering Imagineers and putting Disney back on the right creative track following Eisner’s darker days.
It should go without saying, but how the CEO is viewed from within the company is a big deal. Imagineers, animators, artists, filmmakers, etc. are the heart and soul of the Walt Disney Company. To lose them is to lose the thread, so to speak, and the damage is done even if not immediately apparent in the near-term creative output. Inertia is most definitely a thing that can keep certain things going in the right direction…until it doesn’t.
On a similar note, we’ve remarked how with Chapek it was ironic that a company specializing in storytelling had a leader who is utterly incapable of presenting a compelling narrative or delivering a message in a way that seems sincere and heartfelt, rather than stilted and scripted. So many of the “unforced errors” that occurred under Chapek simply would not have happened with Iger at the helm. Even if the exact same decision were made, it would’ve been framed in a better way.
You may think that this doesn’t matter to you as a consumer or guest, but it absolutely does. Corporate culture and tone gets set from the top down. Iger ran a tight ship, was zealously on message, made Cast Members feel like they were part of something special, and didn’t relish insulting fans. There are a bunch of little (and large) fumbles and missteps that occurred under Chapek that never would’ve been tolerated under Iger (who will presumably be bringing back his c-suite team that was likewise great at this type of thing). All of this matters in the long run.
Similarly, Bob Iger was much more detail-oriented and far less sloppy. While Disney IT has been bad for a long time and the buck stops with Iger when it comes to the NextGen initiative and My Disney Experience app, those are the exception rather than the rule. (And to Iger’s credit, there are no easy solutions when it comes to Disney IT–there are a lot of legacy systems that cannot easily be replaced.)
I have a very difficult time imagining that Iger would’ve allowed Genie to be released in its initial (or present) form. Or that he would’ve allowed the launch and subsequent changes to be so sloppy. I also doubt Iger would’ve tolerated comments about guests’ waistlines or made any number of other mistakes, all of which add up in aggregate.
Ultimately, Bob Iger returning to his former role as CEO of the Walt Disney Company is very good news, in our opinion. The intention of this commentary isn’t to throw a wet blanket on the excitement Walt Disney World and Disneyland fans undoubtedly have in response to this news. Rather, we’re simply trying to manage expectations and provide a bit of reasonable context and commentary about what is and isn’t likely to change anytime soon.
In the end, you shouldn’t underestimate how pivotal this moment is–in a positive way–for the future of the Walt Disney Company. For all of the guest-facing damage that was plainly visible during Chapek’s reign of terror, there was just as much bubbling below the surface that would’ve manifested down the road. Iger absolutely will not make all of the “positive” changes you’d like to see. To the contrary, he’ll undoubtedly make some more “negative” ones that you won’t like.
However, Iger does have the chance to rectify Chapek’s missteps and mistakes, while making a variety of positive low-hanging fruit changes in the short term. More importantly, Iger has the chance to course-correct, altering the trajectory of the company and setting it back on the right path while also finding and grooming a suitable successor. It may not be enough for a lot of you, but I honestly cannot think of a better move for the Walt Disney Company as it enter its 100th year than setting things right to ensure it’s around for the next century. The king has returned, indeed.
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What do you think about the “surprise” announcement that the Walt Disney Company is doing a classic Bob Swap™️, replacing Chapek with Iger? Are you excited or disappointed that Disney is bringing back CEO Bob Iger? Think he’ll give the gift of Disney’s Magical Express, free FastPass, unlimited Park Hopping, Annual Pass sales, reservation-free visits, lower prices, or the Disney Dining Plan? Thoughts on anything else covered here? Are you bullish or bearish about the company’s future as the Walt Disney Company enters its 100th year? Agree or disagree with the firing of Chapek? Are you still worried about the future of Walt Disney World, Disneyland, or the company in general? Think things will improve or get worse throughout 2023? Do you agree or disagree with our assessment? Any questions we can help you answer? Hearing your feedback–even when you disagree with us–is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!
Iger is a politician whom wanted used Disney as a way to push him into a presidential run. As far as I am concerned the whole thing can burn down, and I hope he gets to go down with the ship this time, instead of jumping off last minute to let someone else take the hit. Paycheck deserves what he got as well. If ya ask me, they need to rid themselves of activist who could care less on whether or not this company makes any money at all. It is hemorrhaging money, D+ is more like an 8 billion loss, and their ROI on their last bumbling toxic films have shown exactly why they are losing money. In fact the parks are probably the only thing they are keeping them afloat. What they need to do is get out of the activist business and get back to what they do best, making show and telling stories that are relatable to everyone. Cater to a niche expect niche rewards.
“Bob Swap” should be the title of the next Pixar movie.
Iger can cement his legacy with a brilliant 100 yr Disney Anniversary celebration.
First tidy up some loose ends, throw the customers a perk (just pick one, make some people happy). Put out a new movie that was already in development….
Then throw a one year party – where every entrant gets a pin (cheap but effective souvenir – it will have Iger’s name on it somewhere). Just make everyone happy to show up, and when they go home they can reminisce and show off.
Then retire as a billionaire.
Maybe the board wanted the ruthless cost cutting of Chapek, without it being so ruthless and brand damaging? No one really knows what goes on behind closed doors but everyone knows what transpired, a near death spiral of the brand in rapid free fall. I don’t think Iger will “fix” the damage as I’m sure most of this was designed under his watch and executed by Chapek, but done too quickly and very sloppy.
Chapek flubbing the response about the Parent’s Bill of Rights, not their actual truly held belief about it, wasn’t as big of a deal as everyone is making it out to be. Disney’s official response to being against it was to keep the Imagineers happy and distracted from being paid appalingly low wages. When a company virtue signals while paying their execs 1:2,700 ratio vs their average worker, it’s more to do with giving them the illusion they matter when in reality they don’t.
Iger sending out a Sunday night email right before it hits the press? No, that isn’t him caring about CMs. Most CMs don’t have access to their emails after hours or are working in the parks and can’t access them. It’s just showboating.
Like Tom, I don’t think much of anything will improve, at least substantially that will reverse the negative image Disney has received under Chapek and Iger. Disney is hoping just the mere presence of Iger will improve their image rather than doing anything of meaning to improve guest experience and CM quality of life…..cause let’s be real, that stuff cost money and the board would rather line their pockets and lackeys’ pockets and get away with it.
Look….Shiney squirrel object over there, cue us all looking away from their disaster.
Of course Chapek “got” Disney. He worked there for decades, how could he not? But he wasn’t a people person, and he couldn’t communicate Disney’s magic in a way people could relate to.
Iger’s a smoothie. He’ll still pick your pocket, but he’ll give you a free massage while he’s doing it, and leave you with a smile on your face, though arguably poorer than in the Chapek era.
Tom, for what it’s worth, I would still be very interested in reading your article. All it needs is a change of tense to “Why Chapek Didn’t GET Disney”. As a retrospective, I think it would be a very interesting read.
I’m not as knowledgeable about the inside baseball portion of what is happening at Disney, but I can’t see Iger doing this – and risking his legacy – without some sort of big move. Is it building the long rumored 5th gate? Acquiring another streaming service? Or something we don’t know.