Bob Iger’s 2020 departure from the helm of The Walt Disney Co. (DIS, Financial) was a long time coming. Iger had initially planned to step down as CEO back in 2015 after a decade in the top spot. However, he decided to delay retirement in order to lead Disney through a critical period of transformation, including the launch of its streaming platform, Disney+.
Bob Chapek, Iger’s anointed successor, finally took the reins as CEO in February 2020. Unfortunately, his tenure was not a happy one, with many investors and analysts questioning his decisions and ability to lead Disney on his own. After a number of stumbles in 2022, Chapek was ousted as CEO. In his place, Disney’s board has once again turned to Iger, who returned officially as CEO last month.
While Iger’s return has been met by many investors and analysts with some enthusiasm, the task of righting the Disney ship may not be so easy.
Despite retiring as CEO, Iger remained a powerful force at Disney, donning the mantle of executive chairman ostensibly to help make the company’s long-delayed leadership transition as smooth as possible. This role was meant to be temporary, initially scheduled to expire at the end of 2020, but Disney’s board extended Iger’s appointment another year in response to the far reaching disruptions that followed the outbreak of the Covid-19 pandemic. Iger’s tenure as executive chairman finally ended on Dec. 31, 2021.
At the start of 2022, it appeared to many outside observers that the Iger era was finally over. With Iger no longer holding any official leadership role, Chapek seemed to at last be fully in charge at Disney. This appears not to have actually been the case. According to a host of reports in recent months, Chapek continued to struggle to exert his authority thanks to persistent meddling from Iger. A Dec. 21 report by Disney Fanatic, a website dedicated to tracking all aspects of Disney’s business, highlighted the remarkable extent of Iger’s interference:
“From secret meetings Iger conducted without Chapek to constantly ‘micro-managing’ the former CEO, it appears as more Disney insiders share behind-the-scenes information that the former Disney CEO Bob Chapek was not only unsupported in his role by Bob Iger but might have even been actively hindered in performing his duties. Recent reports from The Wall Street Journal even indicate that Iger kept an office at The Walt Disney Studios in Burbank, California, even after he theoretically left the Walt Disney Company at the end of 2021. Iger is known to have held strategy-based meetings without Chapek’s knowledge after Chapek succeeded him as Disney’s CEO in February 2020. Though Iger handpicked Chapek to take his role as chief executive officer after nearly 15 years at the helm, he remained as executive chairman to help him find his footing but frequently undermined him.”
These reports are especially remarkable given that Chapek was hand-picked by Iger in the first place. Whatever Iger’s reasoning for choosing Chapek had been in 2019, he seems to have quickly revised his opinion of his successor’s abilities. Faced as he was with what was effectively a dual power structure within the company, Chapek in many ways appears to have been set up to fail.
Return of the king
Before Iger had even stepped down as executive chairman at the end of 2021, industry commentators were already talking about the possibility of his reclaiming the mantle of CEO from Chapek. An industry executive told CNBC as much in December 2021:
“It hasn’t even been two years since Bob Chapek took over as Disney’s CEO. But one executive told CNBC there are already internal wagers at Disney. Disney shares have stumbled this year, down nearly 20% year to date. Iger owns a lot of those shares. The board and Iger may get restless if Disney+ growth stagnates and the company continues to have turf tensions between executives.”
As Disney’s stock continued to slump in the face of both media and economic headwinds over the course of 2022, calls for Iger’s return only intensified. On Nov. 21, Disney officially reappointed Iger as CEO for a two-year period. Disney Chairwoman Susan Arnold explained the reasoning for this decision at the time:
"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.”
Disney investors are clearly hoping for a change of pace in the new year. However, it is unclear whether Iger can deliver on that expectation. After all, Iger has only been away for less than a year, and he appears to have continued his active involvement in the company since his official departure in Dec. 2021. Perhaps Disney will be able to turn things around more easily with the collapse of the dueling parallel power structures under Chapek and Iger back into a single hierarchy under Iger alone.
Despite its recent stumbles, Disney remains an impressive company in my view. It boasts an unbeatable portfolio of bankable intellectual property, as well as myriad physical and digital assets through which it can reach audiences of all ages worldwide. Under sound leadership, Disney should be more than capable of recovering the ground it has lost over the past couple of years.
Iger is clearly capable of leading Disney effectively, but it is less clear whether he is as capable of selecting an equally effective successor. The bungled transition under Chapek will undoubtedly be on investors’ minds over the next two years as Iger searches for a new successor.