Bob Iger Stepping Down as Disney CEO, Effective Immediately
The Walt Disney Company just announced that Bob Iger is stepping down as Disney CEO, and will assume the role of Executive Chairman. Bob Chapek, who was Chairman of Disney Parks, Experiences & Products up until now, has been named the new Chief Executive Officer by TWDC’s Board of Directors.
Per Disney, Bob Iger will direct creative endeavors, lead the Board of Directors, provide the full benefit of his experience, and work towards ensuring a smooth and successful transition for the next two years–through the end of his contract on December 31, 2021.
This is nothing short of stunning news. In this post, we’ll share the Walt Disney Company’s press release about new CEO Bob Chapek and the transition between outgoing CEO Bob Iger and Chapek. Finally, we’ll offer commentary about this bombshell (scroll down to “Our Commentary” if you don’t care about or have already read the details), including how this could impact Walt Disney World and Disneyland…
In Mr. Chapek’s new role as CEO, he will directly oversee all of the Company’s business segments and corporate functions. Mr. Chapek will report to the Executive Chairman, Mr. Iger, and the Board of Directors. He will be appointed to the Walt Disney Company’s Board of Directors at a later date.
A new head of Disney Parks, Experiences and Products will also be named at a future time. Mr. Chapek served as Chairman of Disney Parks, Experiences and Products since the segment’s creation. Prior to that, Mr. Chapek was Chairman of Walt Disney Parks and Resorts.
In offering statements about the change, Bob Iger said that “With the successful launch of Disney’s direct-to-consumer businesses and the integration of Twenty-First Century Fox well underway, I believe this is the optimal time to transition to a new CEO.
I have the utmost confidence in Bob and look forward to working closely with him over the next 22 months as he assumes this new role and delves deeper into Disney’s multifaceted global businesses and operations, while I continue to focus on the Company’s creative endeavors.”
Mr. Iger added: “Bob will be the seventh CEO in Disney’s nearly 100-year history, and he has proven himself exceptionally qualified to lead the Company into its next century. Throughout his career, Bob has led with integrity and conviction, always respecting Disney’s rich legacy while at the same time taking smart, innovative risks for the future.
His success over the past 27 years reflects his visionary leadership and the strong business growth and stellar results he has consistently achieved in his roles at Parks, Consumer Products and the Studio. Under Bob’s leadership as CEO, our portfolio of great businesses and our amazing and talented people will continue to serve the Company and its shareholders well for years to come.”
“I am incredibly honored and humbled to assume the role of CEO of what I truly believe is the greatest company in the world, and to lead our exceptionally talented and dedicated cast members and employees,” Mr. Chapek said. “Bob Iger has built Disney into the most admired and successful media and entertainment company, and I have been lucky to enjoy a front-row seat as a member of his leadership team.
I share his commitment to creative excellence, technological innovation and international 2 expansion, and I will continue to embrace these same strategic pillars going forward. Everything we have achieved thus far serves as a solid foundation for further creative storytelling, bold innovation and thoughtful risk-taking.”
Susan Arnold, independent Lead Director of the Disney Board, said, “The Board has been actively engaged in succession planning for the past several years, and after consideration of internal and external candidates, we unanimously elected Bob Chapek as the next CEO of The Walt Disney Company.
Mr. Chapek has shown outstanding leadership and a proven ability to deliver strong results across a wide array of businesses, and his tremendous understanding of the breadth and depth of the Company and appreciation for the special connection between Disney and its consumers makes him the perfect choice as the next CEO.
“Mr. Chapek will also benefit from the guidance of one of the world’s most esteemed and successful business leaders, Bob Iger,” Ms. Arnold continued. “Over the past 15- plus years as CEO, Mr. Iger has transformed The Walt Disney Company, building on the Company’s history of great storytelling with the acquisitions of Pixar, Marvel, Lucasfilm and Twenty-First Century Fox and increasing the Company’s market capitalization fivefold.
Disney has reached unparalleled financial and creative heights thanks to Mr. Iger’s strong leadership and clear strategic vision. We believe Mr. Chapek’s leadership and commitment to this strategy will ensure that the Company continues to create significant value for our shareholders in the years ahead.”
As Chairman of Disney Parks, Experiences and Products, Mr. Chapek oversaw the Company’s largest business segment, with operations around the globe and more than 170,000 employees worldwide. The segment includes Disney’s iconic travel and leisure businesses, encompassing six resort destinations in the United States, Europe and Asia, a top-rated cruise line, a popular vacation ownership program, and an award-winning guided family adventure business.
Disney’s global consumer products operations include the world’s leading licensing business across toys, apparel, home goods, digital games and apps, the world’s largest children’s print publisher, Disney store locations around the world, and the shopDisney e-commerce platform.
During his tenure at the Parks segment, Mr. Chapek oversaw the opening of Disney’s first theme park and resort in mainland China, Shanghai Disney Resort; the addition of numerous guest offerings across Disney’s six resort destinations in the U.S., Europe and Asia, including the creation of the new Star Wars: Galaxy’s Edge lands at Disneyland and Walt Disney World and the addition of Marvel-inspired attractions around the globe; and the expansion of Disney Cruise Line with the announced construction of three new ships.
From 2011 to 2015, Mr. Chapek was President of the former Disney Consumer Products segment, where he drove the technology-led transformation of the Company’s consumer products, retail and publishing operations. Prior to that, he served as President of Distribution for The Walt Disney Studios and was responsible for overseeing the Studios’ overall content distribution strategy across multiple platforms including theatrical exhibition, home entertainment, pay TV, digital entertainment and new media.
Commentary
There are two aspects of this news: Bob Iger abruptly stepping down as Walt Disney Company’s CEO and Bob Chapek as his successor. We’ll start with the Bob Iger aspect of the news. Suffice to say, it strikes us as odd. There’s almost certainly more to this story than what has been revealed.
After extending his tenure on a couple of occasions, we anticipated that Bob Iger would groom a replacement and slowly reveal that individual, perhaps with carefully-placed “rumors” in trade publications. Disney would set the stage for that person as Iger’s clear successor even before an official announcement. With that, we expected that there’d be an announcement that said successor would take the helm at a future date a year or so down the road upon Iger’s exit, with a smooth transition coming first.
While the press release uses the word transition (and the same word was just used on the investor call a lot), stepping down immediately certainly doesn’t suggest that this is going to be a smooth and seamless process. Nor does elevating Bob Chapek without naming a new Chairman of Disney Parks, Experiences and Products.
It’s possible that Bob Iger’s new role as Executive Chairman will actually serve to ensure a smooth transition. However, that could just as easily be an honorary or superficial title to make it appear that this change isn’t abrupt. Disney has a history of creating and filling meaningless positions for high-profile executives who are leaving to “spend more time with family.”
As for the motivation, your speculation is as good as ours. There are all of the obvious assumptions when this type of thing happens, but we’re not going to engage in rumor mongering. We do question whether there’s more to this story, and what subsequent developments will occur. Quite simply, the explanation that the time was right does not pass the smell test. This looks and feels very sudden and odd.
As for our thoughts on Bob Chapek as CEO of the Walt Disney Company, we’ll share similar sentiment to what we did in the commentary to our recent Walt Disney World Investing Millions of Dollars on Cast Morale article.
We don’t normally offer commentary about executive leadership at the Walt Disney Company because it’s tough to do so from the outside looking in. Quite simply, fans see what we want to see. We view things in reductionist terms, and can be manipulated by agendas both internal and external to the company. Consequently, it’s easy to paint leadership in the familiar terms of Disney fairytales.
There’s always a villain—the one blamed for the gratuitous injection of IP in attractions. There’s also usually an underdog hero—the one who “gets” Disney and would save the parks and restore Epcot’s original vision if they just had a little more power. There’s perhaps a kernel of truth to some of this, but just as much is attributable to media savvy (or lack thereof) and how executives present themselves and mold their own public image.
With all of that said, our outsider’s perspective on Bob Chapek is not exactly glowing. As is the case with many Disney theme park fans, we’re skeptical of his consumer products background. There are plenty of anecdotes about him that suggest he doesn’t “get” theme parks, and his own words in publicly-available interviews reinforce how he views the parks and Disney brand as a whole.
However, we’ve never even met Bob Chapek and obviously have no firsthand experience of his leadership. Our view is largely uninformed and biased towards parks. Obviously, his new role as CEO encompasses far more than just theme parks, and perhaps he’s well-suited for such a position.
There’s also the matter of what this means for Walt Disney World, Disneyland, and the international theme parks. Per the Walt Disney Company, the role vacated by Bob Chapek will be filled at a later date. It’s a pretty significant position to simply leave vacant, and we’d expect it to be filled sooner rather than later.
In the past, when the Parks & Resorts division has received a new leader, they’ve acted quickly to make their mark. Perhaps most notably, Tom Staggs changed the scope of New Fantasyland in Magic Kingdom shortly after his arrival, transforming plans for a slew of meet & greets into Seven Dwarfs Mine Train. Other examples of such changes abound as leaders aim to leave their fingerprints on the parks and have a say in future developments.
This isn’t necessarily cause for concern–we wouldn’t expect any plans to be put on hold, especially anything that’s already in-progress construction. However, the scope and scale of previously-announced projects could change, especially those where little-to-no physical work has begun. This could also impact concepts that are in various stages of development but have not yet been greenlit. (Basically, we’re talking about Walt Disney World and Disneyland projects on the horizon for 2022 or beyond. Little if anything before then should be impacted.) We’ll continue monitoring this news, and will share whatever else develops as this transition takes shape…
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Your Thoughts
What do you think of Bob Iger stepping down as the Walt Disney Company’s CEO? Do you think the time is right, or agree that this seems very abrupt and odd? Thoughts on Bob Chapek being named new CEO? Who would you like to see be the next Chairman of Parks, Resorts & Experiences? Any questions? We love hearing from readers, so please share any other thoughts or questions you have in the comments below!
I know it feels like Iger’s stepping down as CEO was abrupt but I see it a lot more naturally than that. When his book came out last fall entitled “The Ride of a Lifetime” it felt like the writing on the wall that his tenure was coming to an end. I’ve heard he’s also been spending more and more time in New York. The Avengers Phase 3 and the new Star Wars trilogy have both come to an end. The launch of both Galaxy’s Edge is complete. The Fox merger is done. Disney+ is off to a great start. Now with the coronavirus closing parks & stocks going down it makes sense for him to handoff the CEO day-to-day operations role at this time. It’ll be a lot less time involved with his new role but it’ll still be satisfying to oversee the creative future of the company. He’s a very ambitious guy so who knows what the future is for Iger. Since he’s staying with the company until 2021 the earliest he could really get into politics is the 2022 mid-term elections. I only wished he would’ve topped off his tenure by securing the rights back to the Spider-Man franchise but he’ll end up going down as the best Disney CEO.
Agreed! It makes sense that the parks are fairly stable, yet there are plenty of new parks projects coming. Mr. Chapek will obviously be comfortable finishing those. I love Bob Iger’s leadership of Disney and cannot even fathom how he has done it all in his tenure. I hope he can enjoy the creative side, hopefully without so much stress from the business side. He’s earned it!
I would assume that being added to a lawsuit associated with Weinstein would prompt Iger to take action to avoid bringing the company into the mess. I know he had been planning his succession anyways so it would make sense that once he was named in the lawsuit his timeline would be sped up for the good of the company.
I’d be interested to hear your thoughts on the potential closures to the parks for Coronavirus. Given they have closed parks in other countries, though those were very heavily owned by the government, what are your thoughts based on your experience of the likelihood that they will close Parks here?
Do you think there is a risk of the domestic parks closing if Coronavirus arrives in Florida/Cali?
I don’t really want to speculate on that yet as this situation is rapidly changing–and also worsening.
If you asked me a couple of weeks ago, I would’ve said that coronavirus poses no threat to the US parks. I wouldn’t make that same statement now. Too much has changed and continues to change on a daily basis.
Tom, a post suggestion. Would be interesting if you could explain the decision making chain in WDW. There’s is each park’s vice-president , WDW resort’s president, the head of Parks & Resorts, WD Imagineering… I guess the decision of something big as a new land comes from really high (Company’s CEO) and something related to operations as of park hours is park’s Vice President duty. But what about a new attraction? Where the idea comes from? Who suggest? Who decides? Or something smaller like a meet and greet. Thanks for your great work from Finland!
I hesitate to even write this, & please take it for what it is – rumor.
Coincidentally shortly prior to reading this blog post, I read a disturbing article about potential legal trouble on the horizon for Iger.
Very disturbing.
The article also theorized that if we suddenly see Iger jump Into national politics, it will be to avoid prosecution.
This sounds kinda like crazy, tin foil hat stuff I know lol. Just thought I’d share.
I think the article you read compounded a few small things to make it into one sensational thing. For instance, Bob Iger was added to a lawsuit by an actress because she felt his conduct or leadership allowed Weinstein to do what he did – not that Iger was an active predator. The second part is that a few years ago Iger had looked into joining the presidential race, but ultimately did not. Announcing his role as Executive Chairman for what is effectively almost 2 years does not allow time for politics.
Democrats wanted him to run because he fits a mold that is middle road enough for some Republicans to consider. Especially when the party is more radically left aligned going into an important election. Not tin foil because this is actual discussions in past years.
I sit on the board of a public company so I have some thoughts as to what might be going on. While we are not nearly Disney’s size, our meetings are, by necessity, very scripted. Something like Iger stepping down just doesn’t show in the board book at the last minute. Disney’s board had to meet in late January as they announced earning on Feb 4th. What changed? Some commenters suggested illness although I would find that a little surprising because they gave Iger real responsibilities whereas they could have simply made him Executive Chairman. Someone mentioned the corona virus, and the stock market tumble. That is certainly a possibility and that would explain the quick action. Generally, items addressed at a Board meeting (that are public in nature) are announced shortly after the meeting. This was more likely a telephone meeting called at the last minute. This is supported by the fact that they did not announce a replacement. There is also the possibility that Chapek gave them an ultimatum. That could be the case but he was likely at the Board meeting in January so why now? I don’t find it surprising that Chapek was named, but it will be interesting if anything comes out about the circumstances.
if chapek gave them an ultimatum, they made the wrong call in keeping him. they should have run away, fast.
I do not think there is something secret going on. Iger saw that the great works had been done (fox integration, starting disney+ and espn+), now the day to day managing of these assets can be done by someone else. Iger is almost 70 years, he has a family and maybe another 15 years to enjoy his pension. He’s sticking around for another year and a half on the board and lets not forget that the board is the most powerful instrument in the company, not the CEO. At the moment the most important thing for Disney is to create content for Disney+ and the whole Disney universe (products, parks, …). Bog Iger knows that Disney is nothing without great stories to tell and I have the impression that he likes that part of the job the most, doing creative story stuff for the studio’s. I also think he as a good nose for which stories work. Bob Iger is tiered of doing day to day management, he is also looking older last couple of months, he has had a tough time the last couple of years, give the man a break before he dies.
Maybe Iger is Ill and needs a fast exit for treatment It may not be something he wants to share with the public. That is his right
Two thoughts – 1) If there ends up being a brokered convention, there will be a need to pick VP candidates who were not tarnished in this circus of a nominating process.
2) I have no insider knowledge, but it could be that Chapek was the chosen successor, other options were eliminated (for one reason or the other) and Chapek forced their hand by threatening to walk to another company, frustrated with Iger’s extensions.
Maybe an odd theory, but maybe the timing has to do with the stock market taking a dive this week could mask any effect on Disney stock price due to the leadership change.
I don’t think that’s necessarily an odd theory. However, if that motivated this prompt decision, I do think there’s more to the story than that…
I think this was Market timed. (Disclosure: I work in Finance). Long time blue chip watchers will know that this is a leadership change strategy employed by other biggies. General Electric announced its leadership change and stock split during the Great Recession, a risk that they hoped would increase value for shareholders. I think in Disney’s case, monetary performance was exceptional under Iger and any leadership change would devalue stock. Softening of the market, combined with pandemic threat, already has markets on edge. This was likely opportunistic timing- Disney stock was losing value with the market.
I see this as a savvy financial move, and probably preserved stock value for the long term. Iger wanted to leave, for whatever reason, and taking advantage of a market slide was smart.
Now, I’m a huge parks fan and I’ll be disappointed if short-sighted parks changes keep coming down the pike. No question current leadership put stock value over parks experience. This decision is a Trojan Horse.
Hilary, I think this is a savvy and measured assessment–thanks for sharing it. I hope you’re right and that’s all there is to this.
I still question the abruptness. If this is the thinking, why not draw it out a little longer and create a better impression of smoothness? It sure looks like the market isn’t going to find the bottom in the near-term, so why not take at least another week to better sort out the details and come out with a more measured announcement? Isn’t this just going to spook investors and drive a deeper dip in DIS stock?
Thanks Hilary – that was my impression as well – the stocks were going to dip anyway , and they can combine that with “hiding” the news under bigger headlines right now
I had a similar line of thinking – Iger has had an excellent run as CEO and has stated many times recently that he was retirement-minded – he would have to name a successor eventually. With two Parks shuttered and the possibility of more, along with stock prices tumbling, why wait and end his leadership on a sour note of a terrible Q2 earnings report?
Cognitive research shows that the end of something is representative in people’s minds of the whole event. Bob Iger is stepping out ahead of any catastrophe that will mar his legacy.
On the other hand, none of this is anyone’s fault, so bringing in another CEO as things are getting bad will only put him in a positive light when they start to turn around. Iger leaves on a relatively good note, given his limited time. Chapek comes in at a low point with plenty of time to have things turn around.
What Hilary said, and said well.
Tom, I do think something else is inside that Trojan Horse, but it could be that earnings slide has already started because of closures in Asia. Not just parks, but think about movie theaters, merchandise. With public space quarantine and social distancing, movie theaters in China, the largest global market, are going to take a hit. My sense is the market hasn’t bottomed out, but investors are anticipating the cascading effects, like supply chain disruption. In Disney’s case, entertainment and merchandising, is going to take a hit. Merch that would be made for Fall/Christmas is likely to be disrupted or delayed.
Your photo choices for this article speak volumes about your opinion of Chapek…
I have no clue what you mean. 😉
I thought the exact same thing when the first 3 were Pixar Pier, B&tB Sing-Along, and Mission Breakout. 🙂
Maybe it’s because I’ve recently had a diagnosis in my immediate family, but my first thought was that Iger had received some bad news health wise. I hope that’s not the case.
That crossed my mind, too. It should go without saying, but I really hope that isn’t the case.
Obviously totally speculation- it could be a family member instead of Iger himself with a health issue. On a happier note, maybe his wife has been pressuring him to spend more time away from work and finally won the argument.
If I recall correctly, on the Bill Simmons podcast dated Feb 9. (Simmons worked for ESPN for a long period of time), Mr. Iger actually drops into the conversation that he planned on being finished at Disney by the end of 2021. Simmons’ response “I’ll believe it when I see it”.
Thanks for the heads up that Iger did Simmons’ podcast. That’s actually a bit surprising–the way Simmons and ESPN parted ways was a bit acrimonious, to say the least.
I’ve been following Simmons since he was the Boston Sports Guy back in 1998ish. Personally I feel that Simmons took about a year to cool his jets, and has been rebuilding bridges with ESPN ever since. He’s had several ESPN personalities on his pods over the last couple of years – once ESPN eased the ban on their personalities doing other companies’ media platforms.
In the Iger interview, they mention that they were going to do a pod back when he was on his way out, but it would’ve been awkward, so they cancelled. No real signs of any animosity in the podcast.
As to the new CEO, I think it was a Kevin Mayer vs Bob Chapek decision. While people may not like Bob Chapek, think of this decision as streaming over parks/real estate. The right one was picked. Wall Street was fairly shocked as they expected all of Disney’s resources to go towards media/streaming. This decision shows that Disney still values the park experience.
I think what’s surprising there is that Mayer has done everything right. While I may not personally love Disney+, the business decisions made on the streaming front have been incredibly savvy, and poised the company for the future.
The couple of years have been much bumpier for Parks & Resorts.
I recently asked a corporate CM friend about Kevin Mayer as an option and that was laughed off. They said he’s a well-liked guy riding high on the recent win, but that no one ever talks about him as having that level of leadership potential. Just one person’s insights, but I thought it was interesting.
Disney from a media standpoint has killed it and will continue but tech changes faster than the desire to spend time with family on vacations. The parks are difficult to master with Disney fans being so passionate but I believe they remain the core and staple that drives the media even more so. Immersion builds a deeper love for the merchandise and films.
Who gets to take the hit for the big loss of money in Asia? None of the parks have reopened and who knows when they will reopen.
If I had to guess, coronavirus would be my pick for the most plausible (non-nefarious) explanation of Iger’s abrupt move. Not necessarily because of the impact thus far to the parks in HK and Shanghai, but for the potential impact to the domestic parks and other business units due to supply-chain issues, etc.
The uncertainty surrounding all of that could’ve left Iger eyeing the exit, not wanting to tarnish his legacy. That is total speculation on my part, though.
This is interesting news for sure, but I think the new head of Parks & Resorts is the more interesting aspect. From that perspective it’s mostly irrelevant to what extent Chapek “gets” the parks – as long as the person appointed to the parks division steers the ship in the right direction.
The key is in accepting that this means the right direction for shareholders, which puts me in a difficult position as a fan. Do I dislike the amount of brand synergy in the parks – absolutely. Is it objectively the wrong decision, in the short, medium or long terms? Time will tell. I don’t think demonising the leadership is the right approach, and nor is it realistic to assume that in today’s increasingly digital age, attempts to cross market wouldn’t increase.
First, Bob Iger/Bob Chapek News, now spaceship earth! big day at Disney https://disneyparks.disney.go.com/blog/2020/02/the-reimagining-of-spaceship-earth-at-epcot-begins-may-26/?CMP=SOC-DPFY20Q2wo0220200226200008F
“not great, bob.”
looking for a silver lining, my hope is that now that chapek won’t have his hands directly on the parks themselves, maybe his replacement will have a little more interest in the guest experience and satisfaction like the company once had, instead of the vision is have of chapek seeing all guests as nothing more than numbers wearing dollar sign tshirts with mickey ears on them. ultimately, chapek has final say, but that’s my hope. iger wasn’t the best but chapek is not an upgrade here. this makes me uneasy, especially with the abruptness of it all.
Spot On Analogy! I blame then both for declining goodwill
Maybe delving into politics??
I still think that’s his eventual play, but I don’t see that as the move right now given where we stand in the cycle. It’d be one thing if a moderate already had a strong lead and Iger had assurances he’d be the VP pick. That’s not the case, though.
However, that’s probably the best-case scenario as for the real explanation here.
Strong moderate? There are no moderates at all trying to run! Just full on nutcases.
Mr Nico….You Sir have a Strong Affinity for Weeding Out the Truth from All the BS!
Why would we want another billionaire in the White House? I would absolutely not vote for a ticket with Iger on it. Trump will have a massive turnout on Election Day. The Dems need to nominate that can also turnout a huge amount of people. Iger should make other plans.
This type of move goes back to Walk Disney when his final title was Founder. Walt was left to work on creative endeavors while other ran the company.