Bob Iger is credited with expanding the Disney empire to all corners of the globe. After becoming CEO in 2005, Iger oversaw Disney acquisitions of Pixar, Marvel Entertainment, Lucasfilm, and 21st Century Fox. Bob Iger returns to Disney while his predecessor Bob Chapek has faced heavy criticism over his management style.
Less than a year after he left Disney, Iger returned to the helm as Chapek struggled to bolster the company’s dwindling revenues, making investors worried. They hope to see a repeat of The Walt Disney success story, under Iger’s guidance.
Bob Iger Returns, Bob Chapek is Out
It is no secret that Iger has been disappointed by Chapek’s working style. Mid-July, reports surfaced that Bob Iger was unhappy with the way Chapek handled his exit and confided to some trusted associates that letting him take the reins was one of Iger’s “worst business decisions.”
Before these reports made the news, CNBC reported that the two men had a fallout over Florida’s “Don’t Say Gay” legislation and rarely speak to each other. Eventually, the entertainment giant lost its special tax status in the state. Disney’s misadventures prompted speculation that Chapek could be replaced by Bob Iger in the near future.
However, in June, Chapek received an extension on his contract, complete with a $20 million bonus that put wagging tongues to rest. Bob Chapek had taken over as Disney CEO in February 2020, just before Covid struck the world economy.
Shares of Disney have fallen roughly 41% this year and the stock is at a yearly low.
The change in leadership was conveyed on Sunday via email. Some employees refused to believe the news thinking it is a prank.
“It is with an incredible sense of gratitude and humility — and, I must admit, a bit of amazement — that I write to you this evening with the news that I am returning to The Walt Disney Company as Chief Executive Officer,” Iger wrote to employees in an email.
What does Iger’s Return Mean for Disney?
As Bob Iger returns, the Disney board is expecting him to turnaround slumping shares and boost investor confidence. Much like the return of Howard Schultz to Starbucks, Iger’s appointment seems to be an interim one for now. Disney has signed him on for two years, during which he will “set the strategic direction for renewed growth and to work closely with the Board in developing a successor to lead the Company at the completion of his term”
Bob Chapek has initially planned layoffs, cost cuts, and hiring freezes for this year, after a dismal earnings report. Chapek shepherded Disney when the pandemic ravaged the entertainment giant, forcing parks to shut down and preventing the release of its multi-billion-dollar movies from being released in theaters. The video streaming business has also incurred losses, with Chapek saying that the segment will be profitable by 2024.
But as losses rose, the Disney Board, despite the initial show of confidence, decided to bring Iger on board. Susan Arnold, Disney’s board chair stated that the company was grateful to Bob Chapek for his leadership, especially during the pandemic.
Bob Iger is very liked and respected within Disney’s walls. As the CEO who spearheaded multiple acquisitions that are each worth multi-billion-dollar franchises, nobody can question his business acumen. Although he has repeatedly said that he is not interested in returning, as Bob Iger returns to Disney, experts are curious to see what changes he will bring.
Some analysts predict that the first change would be an upturn in the company’s stock. Industry veterans are also optimistic that Bob Iger’s return will improve content offerings and quality.
“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,” board Chair Susan Arnold said in a statement.
Bog Iger’s return is expected to raise Disney’s fortunes, as the former Disney CEO enjoys a great relationship with the board and employees alike, fostering confidence that he will put the company to rights.
