The Walt Disney Company announced this afternoon that Robert Iger, the company’s long-time CEO who ushered in the company’s lush franchise and entertainment platform profits, will step down immediately as chief executive. Bob Chapek, a long-time senior exec at the company who most recently held the position of Chairman of Disney Parks, Experiences and Products, will succeed him.
Chapek, as head of Disney’s Parks Division was a somewhat divisive figure in that he led with a ‘value engineering’ (the Imagineering word for trimming cool stuff) and budget concious strategy instead of the more popular ‘let Imagineers do the most’ tactic that has produced some of the Parks most enduring rides and experiences. Disney Twitter has been quick to descend upon the Chapek choice as a sign of possible rough times ahead for Parks budgets.
Our guess for who would head Parks is Josh D’Amaro, extremely well liked former head of Disneyland who now heads Walt Disney World. Liked by Parks people for a lot of the opposite reasons, which politically could make this a non starter, but would be very popular appointment.
A few oddities surround this sudden change. Iger is only 14 months into a 36 month contract extension and this comes not on a regularly scheduled earnings call but in the midst of an interesting time for Disney as it faces Parks shutdowns due to the Corona virus outbreak. Disney’s earnings have been amazing lately, which would have made for a nice two-hander at earnings time. Speculation is still high for the exact reason behind Iger’s departure, with many hoping for something benign (ish) like a Presidential run vs. a personal issue.
Iger will address Disney employees at 5: 30EST today, we’ll update if anything further comes of that address.
Under Iger’s tenure since 2005, Disney expanded aggressively into movies, theme parks, and other entertainment verticals, culminating late last year with the introduction of the company’s Disney+ streaming service. Iger oversaw such dramatic acquisitions as Marvel Entertainment a little more than a decade ago, and also bought Lucasfilm and its Star Wars and Indiana Jones series. He also helped to rebuild a partnership with late Apple founder and CEO Steve Jobs, and eventually acquired the Pixar animation studio, which Jobs had founded in 1986. Those decisions, among other aggressive media growth strategies, has given Disney a commanding role in the media universe.
As Jake Coyle noted in the AP earlier this year:
But in today’s IP-driven movie world, one studio is in a league of its own. In 2019, Disney dominated American moviegoing more than any studio ever has before — roughly 38% of all domestic moviegoing.
The year’s top five films were all Disney movies, and it played a hand in the sixth. Disney’s Marvel Studios produced the Sony Pictures release “Spider-Man: Far From Home.”
Since its launch, Disney+ itself has drawn almost 30 million subscribers according to data released by the company earlier this month.
Iger will assume the role of Executive Chairman through 2021 according to Disney’s statement.
It has been no secret that Iger has been thinking about succession planning for years, but at least until recently, details had remained scant. Media analysts probed for news in Iger’s book The Ride of a Lifetime, which was published late last year and was a summation of his tenure at the media conglomerate and his business philosophy. Yet, finding a successor at the company has been challenging, with multiple heirs apparent departing the company when the top slot looked like it would remain locked in Iger’s grasp.
On an already heavy red-ink day, Disney stock was further hit in after-hours trading by investors. Yahoo Finance’s most recent quotes puts Disney stock down 2.57% in after-hours trading, following a 3.62% decline during trading hours stemming from the global coronavirus outbreak. Disney has significant properties in Asia, including Shanghai Disney Resort, which was the company’s first platform in China and was overseen by incoming CEO Chapek.