After being succeeded by Robert Chapek in 2020, Mr. Iger is returning to the company he led for 15 years. Disney CEO Bob Iger announced to employees on Sunday that he will replace Bob Chapek as CEO effective immediately, expressing “an incredible sense of gratitude and humility—and, I must admit, a bit of amazement.” He is not alone in this.
Since Chapek unexpectedly took over for Iger in early 2020, just as Covid launched, the story of the two Bobs has continued, and it has developed into a bit of a feud because the new CEO allegedly disliked the former boss always hovering over him. Wall Streeters and business insiders were concerned about Chapek’s future at the company after a few high-profile slip-ups, but those concerns subsided after Disney’s board of directors unanimously voted in June to extend his original contract, which was set to expire in February 2023, with a new three-year deal that began on July 1. The board, led by Susan Arnold, said in a statement at the time that “Bob is the right leader at the right time for The Walt Disney Company, and the Board has full confidence in him and his leadership team.”
In a statement released on Sunday night, Mr. Iger expressed his “extreme optimism for the future of this wonderful firm” and his “thrill” at the board’s request for him to take on the role of CEO once more. When contacted for comment, Mr. Chapek did not provide any.
The unexpected firing of Mr. Chapek and reinstatement of Mr. Iger follow a disastrous earnings report on November 8. Disney completely caught Wall Street off guard when it revealed that its nascent streaming division had lost $1.5 billion, up from $630 million the year before. Higher Disney+ production, marketing, and technology costs, according to Mr. Chapek, were a factor in the “peak” losses.
Disney made $20.15 billion in total in the three months that ended on October 1, up 9% from the same period last year. Analysts, though, had projected $21.3 billion. $162 million in profit, or 9 cents per share, was fairly flat from the prior year. Excluding items that affect comparisons, the most recent quarter’s per-share profit was only 30 cents, significantly less than what analysts had predicted. Disney exceeding forecasts for both revenue and earnings per share is practically unheard of.
In part because of investors’ and many Disney employees’ disbelief over Mr. Chapek’s upbeat demeanour when discussing the results report on a conference call with analysts, Disney shares fell 12 percent the next morning. Many others found Mr. Chapek’s manner to be tone deaf, especially when he began to implausibly discuss how enthusiastic the response to Mickey’s Not So Scary Halloween Party, a minor event at Disneyland, had been. At least one advisor had already informed Mr. Chapek that his prepared words were too upbeat.
Senior Disney officials were incensed by Mr. Cramer’s remarks, which caused several of them to confide in one another that they no longer believed Mr. Chapek could lead Disney out of its rut. The price of Disney stock has dropped 41% since January to around $98. Stock options make up a large portion of the compensation for key creative leaders at Disney.
In February 2020, Mr. Chapek was named CEO, succeeding Mr. Iger. It was not a smooth handoff. Mr. Chapek was forced to close most of the business due to the coronavirus pandemic. Mr. Chapek dealt with numerous crises this year, some of which were the result of his own doing.