In a shock move, Disney announced late on Sunday that it was replacing its chief executive Bob Chapek with his predecessor, Bob Iger, effective immediately.
Chapek, who had been hand-picked for the role by Iger, led Disney for less than three years, a period marked by staff unrest, poor talent relations, stagnating franchises, and a steep drop in share price. Iger’s first stint as CEO lasted 15 years. He was well liked; acquired Pixar, Marvel, Lucasfilm, and 20th Century Fox; and launched Disney Plus, turning a family entertainment company into a 21st-century media juggernaut. During that time, Disney’s market value increased fivefold.
The board’s decision, while surprising, looks quite simple when you put it like that. But there are a number of things going on here, and the picture isn’t always clear cut.
Iger’s reappointment is probably intended to reassure shareholders and shore up the company’s share price, which has dropped 40% in 2022 to date. The plan is for Iger, 71, to serve as CEO for just two years, during which time one of his primary responsibilities will be to search, once again, for his own replacement.
But Iger had some difficulty letting go last time. He postponed his own retirement several times, eventually leaving in early 2020, though he stayed on as executive chairman until late 2021, keeping a watchful eye on his successor. Even then, he seemed to be experiencing a form of buyer’s remorse, stopping just short of publicly criticizing Chapek a number of times.
Chapek is the fall guy for Disney’s recent underwhelming financial performance. Although he was judged to have handled the challenges of the pandemic — including the closure of movie theaters, parks, and cruises — reasonably well, and the parks business has bounced back, in the last year the company has been falling short of Wall Street’s expectations of it. The main culprit has been the turbulent changes in the TV landscape, as traditional TV revenues decline but the astronomical cost of building up a streaming platform to take their place takes its toll.
Disney Plus’ growth has been impressive, and with Hulu and ESPN Plus also under its wing, the company challenges Netflix for overall subscriber numbers. Yet Disney’s streaming business just lost $1.47 billion in one quarter alone. Wall Street is increasingly skeptical about the long-term profitability of streaming platforms — Netflix has lost a lot of investor confidence this year, too.
Is this Chapek’s fault, though? Disney Plus was Iger’s (very expensive) baby, and the “increasingly complex period of industry transformation” that the board cited in its press release about the change of CEO is happening to everyone. To understand why Disney felt it needed a new broom, we have to look at the broader picture.
The fact is that Chapek, who rose through Disney’s parks wing, had repeatedly shown himself unequal to the diplomatic challenges of running a major entertainment business. He lost the trust and confidence of many staff and creatives when his initial response to the passing of Florida’s “Don’t Say Gay” bill was neutral and politically disengaged. He later had to apologize — and yet still persisted in his plan to move 2,000 staff from California to Florida, eventually delaying it months later, but only after it had sparked mass resignations from the famous Imagineers team of theme park and attractions designers.
This wasn’t the only way Chapek had alienated the creative people that power Disney’s business. An unpopular corporate reorganization took power away from content executives, and Chapek fired well-regarded TV chief Peter Rice. The hostile way he managed the legal dispute with Scarlett Johansson about the decision to release Black Widow simultaneously on Disney Plus and in theaters was received very poorly by Hollywood talent, even though it was eventually settled. Chapek was known to have a dismissive attitude toward animation, despite its position at the very core of Disney culture, and drove Pixar morale into the ground by bypassing a theatrical release for three of its films in a row — Soul, Luca, and Turning Red. (Pixar’s return to theaters with Lightyear fizzled, too.)
It is harder to connect Chapek directly to the fortunes of Marvel and Star Wars, but both these crown jewel franchises have shown signs of stagnation during his tenure. Lucasfilm boss Kathleen Kennedy has been unable to get any new Star Wars movie project to stick since 2019’s The Rise of Skywalker. Marvel has been a reliable earner, but quality control has started to suffer under the weight of a chaotic and overstuffed schedule of movie and TV releases, while Black Panther: Wakanda Forever’s box office receipts — which are huge but a little below expectations, tracking slightly behind Doctor Strange in the Multiverse of Madness — perhaps show the first indication of franchise fatigue. Kennedy and Marvel Studios boss Kevin Feige could certainly both use guidance from the top.
Iger is known as a talent-friendly boss. Smoothing things over with Hollywood stars and setting the internal studios — Pixar especially — back on their feet will be on his to-do list. Although he might have to do some cost-cutting to put Disney’s finances in order, he is certainly not who Disney’s board would have chosen if it wanted to carve up assets and slash and burn production in the style of David Zaslav, the destructive head of the recently merged Warner Bros. Discovery. It’s possible to see the future for Marvel, Star Wars, Pixar, and the rest of the Disney film and TV family looking brighter with Iger in charge, at least temporarily.
It seems few will mourn Chapek. Disney’s latest financial results — and the disastrously handled earnings call that announced them — are what finished him off, but his style had long since made him deeply unpopular at Disney and within the industry.
One question remains: Why would Iger go back, after retiring in triumph? What’s in it for him? One theory is that he wants a chance to correct the one decision he got wrong: his choice of successor. Another is that this great dealmaker senses one last deal to be made. (Netflix, even?) Or perhaps, unlike the great Disney heroine of his era, he just can’t let it go.