Why Disney could have to go outside the Mouse House for a new CEO
The Walt Disney Co. is redoubling efforts to find its next chief executive after the surprise announcement Monday that Thomas Staggs would step down from his No. 2 post next month.
News of Staggs’ impending departure stunned Hollywood and Wall Street -- largely because Disney had adhered to a yearslong succession plan that laid the groundwork for Staggs to assume the top job when Chief Executive and Chairman Robert Iger’s contract expires in June 2018.
Now, Burbank-based Disney, which has long promoted from within for its major posts, is increasingly likely to turn to an outside candidate for the CEO position.
While there is plenty of major talent among Disney’s executive ranks, there are few internal candidates who have the management experience necessary for taking on the top job at the world’s largest entertainment company, analysts said.
“There certainly hasn’t been anyone who has risen to that level at this point,” said Robin Diedrich, an analyst for Edward Jones Research. “Nothing really comes to mind.”
Disney declined to comment.
Disney is a more complex company than its entertainment rivals because of the breadth and scope of its various businesses. The company, which has 185,000 employees, owns and operates a sprawling portfolio of theme parks, has a movie studio that consistently is a top performer, and controls a television empire that boasts crown jewels ABC and ESPN.
Many of Disney’s division heads are relatively new to their posts, and don’t have the sort of long-term tenures in top jobs or breadth of management experience that the company typically seeks. (Staggs, for example, has been with Disney for 26 years. The 55-year-old executive served as chief financial officer for 12 years and head of the parks and resorts group from 2010 to 2015.)
Alan Horn, 73, the respected chief of Disney’s film studio, has had a long career in the movie business, previously serving in high-profile posts at Warner Bros. and 20th Century Fox. However, Horn doesn’t have experience overseeing other divisions as Disney, which he joined in 2012.
The company’s TV business is run by Ben Sherwood, who oversees ABC and the entertainment cable channels, and John Skipper, who heads ESPN. Sherwood, 52, has risen quickly through the ranks but has considerable challenges with ABC, the No. 4 broadcast network in the valuable 18-to-49 demographic. He also has only been in his job for a little more than a year.
Skipper is well regarded, and has creative chops, but ESPN’s growth prospects have become increasingly scrutinized by investors in recent months.
Bob Chapek, the chairman of the company’s parks and resorts division, is a 23-year veteran of Disney. But he only became head of the unit last year. He previously ran Disney’s consumer products division.
James Pitaro became the sole chairman of Disney’s consumer products and interactive media unit in February after co-chair Leslie Ferraro departed the company. He’s a relative newcomer to Disney, having joined in 2010.
Disney has a handful of powerhouse executives in charge of companies it has acquired over the last decade: John Lasseter, the chief creative officer of Pixar Animation Studios; Ike Perlmutter, the CEO of Marvel Entertainment; and Kathleen Kennedy, 62, the president of Lucasfilm.
Lasseter and Kennedy are considered strong leaders -- and creative forces. But neither has the range of management experience boasted by Staggs or Iger, who has been with Disney since 1996 and previously oversaw the company’s TV business.
Perlmutter, 73, a sharp-elbowed Israeli American businessman, is not expected to be in the running, though he has been an influential voice with the company’s board of directors.
There is one executive at Disney who could take on the top job -- the one who already has it.
In a research report issued Monday afternoon, analyst Anthony DiClemente of Nomura Securities suggested that Iger, 65, could extend his contract with the company.
He noted that Iger previously extended his contract in 2014 -- in part to ensure that he would remain in the fold for the launch of Shanghai Disney Resort and other projects. (The theme park opens in June.)
“We also believe Mr. Staggs’ departure potentially increases the likelihood that Mr. Iger extends his tenure as CEO,” DiClemente said. “To borrow a phrase, the best successor to Bob Iger may very well be Bob Iger.”
Follow @DanielNMiller for film business news.
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