Walt Disney Co. stunned the media world Tuesday when Bob Iger handed the keys to the Magic Kingdom to a longtime lieutenant, Bob Chapek. Here’s what you need to know about this shake-up and the two executives:
Why is this change such a big deal?
Bob Iger’s tenure as chief executive of Disney has been one of the most ambitious and successful runs in modern-day Hollywood. Since stepping into the top job in 2005, he has transformed Disney into a cultural and financial juggernaut beloved by both Wall Street and millions of consumers worldwide. Iger spearheaded the multibillion-dollar acquisitions of Pixar Animation, Lucasfilm and Marvel Entertainment, bringing such gems as “Toy Story,” “Star Wars,” and “Black Panther” into the Disney family known for Mickey Mouse, Winnie the Pooh and Ariel the Mermaid. He pulled off Disney’s purchase of National Geographic channels, FX and the Fox movie and television studios, which brought even more characters — from “X-Men” to “The Simpsons” — into the company; the deal also gave Disney majority ownership of Hulu, and Iger negotiated to buy Comcast’s stake in the streamer a few months later. Just three months ago, the company launched Disney+ streaming service, which has attracted 28 million subscribers.
Why did this move come as such a surprise?
Iger, who just turned 69, has extended his retirement four times during the last decade, and his contract runs through 2021; he’ll still be deeply involved as executive chairman. His previous heir apparent, Thomas Staggs, exited as COO in April 2016, setting off new rounds of speculation about the company’s succession plan, with Chapek emerging as a rumored contender alongside Fox TV executive Peter Rice and Disney direct-to-consumer chairman Kevin Mayer, who led the rollout of Disney+. The late February announcement surprised not only Wall Street but most of Disney’s 200,000 employees — the announcement earlier Tuesday of a new president for Hulu, Kelly Campbell, was instantly dwarfed by the parent company news. Iger told analysts on a Tuesday call: “I believe it was the right time to transition to a new CEO.”
Why does Wall Street love Iger?
Iger has proven himself to be a bold risk-taker, and most of his big bets have paid off. Disney is currently valued at nearly $230 billion and since Iger ascended to the top job, the stock price has more than quadrupled; it closed Tuesday (before the announcement) at $128.19.
Does this mean that Iger will run for president?
Iger has flirted with campaigning for office and he would draw plenty of high-profile corporate and Hollywood supporters — Oprah Winfrey called him “the man I wish was running for president” in an Instagram post — but he’s fully engaged in the business. He confirmed Tuesday that a presidential run is not in the plans. Instead, Iger said he plans to spend the next year focused on Disney creative endeavors, leaving day-to-day operations to Chapek.
Who is the new guy?
Bob Chapek has worked at Disney for 27 years in some of the company’s most important divisions. With Tuesday’s handoff, the 60-year-old executive became the seventh CEO in Disney’s nearly 100-year history. In his five-year tenure leading parks and resorts, he oversaw the division’s largest expansion with the opening of Shanghai Disney. He previously ran the company’s global consumer products operations, including Disney stores. But he has little experience in some of the company’s largest arenas: television, sports and movies. Iger, when asked about the choice, cited Chapek’s operational experience and knowledge of the company as well as his relationships: “Bob has worked closely and collaboratively with leaders across the different segments of our company,” Iger said.
Does this signal a change in Disney’s direction?
No, according to company executives. Disney has spent the last two years ramping up its strategy to reach consumers directly through streaming services — Hulu, ESPN+ and now Disney+ — rather than relying on outside distributors, such as pay-TV operators. Is it working? Just ask Baby Yoda. And as consumer cord-cutting accelerates, Disney is likely to double down on this strategy. Handing the reins to Chapek, Iger said, was designed to ensure a “smart transition process.”