Disney’s CEO Switch May Have Been Early Sign of Coronavirus Crisis Management
Last month, when Disney’s much-loved, long-standing CEO Bob Iger announced that he was taking a step down for his role EFFECTIVE IMMEDIATELY, it took the Disney World by storm. Though Iger was clear about his intentions to step down after the successful launch of Disney+ (Disney’s streaming network) up until that point insiders weren’t expecting the change until 2021.
Bob Chapek was quickly ushered in as Iger’s successor but the abruptness of the shift led many to wonder if something had happened internally. With the outbreak of the coronavirus, the shutdown of all Walt Disney World Theme Parks and Resorts (worldwide), this rapid shift may make a bit more sense according to a recent piece in TechCrunch.
As the piece points out, Iger, an astute businessman may have understood as early as a month ago the dire financial impact that the coronavirus would have on The Walt Disney Company. As the article states, that “the most important task of Disney’s CEO for the next two years will be rescuing Disney, not growing it.”
With Disney managing forced to address the impact that Coronavirus would have on the crisis on its parks in China all the way back January, Iger seemingly “anticipated the global spread of coronavirus and the economic damage sooner than most other American chief executives. Disney will be hit hard.”
In essence, Iger wanted to end his 15+ year role on a high note but is still working behind the scenes. It’s up to Chapek now to assume the role of Disney’s “Wartime Leader.”
The Disney brand will be facing some challenging times ahead. Disney stock has plummeted in recent works. Shares rose to $148 with the successful launch of Disney+ this past December but have since dropped down to $92. Yesterday some analysts were even speaking openly about whether tech-giant Apple would make a bid for the company.
As the article points out, 34% of the Disney’s revenue comes from the parks, cruises and resorts around the world. At the moment all of these properties (with the exception of Aulani in Hawaii) are closed- in a shutdown that could last for months. And even when things re-open, it will take time for people to re-adapt with tourists still remaining wary of travelling.
Next up are the cinemas! With most theaters around the world closed or reporting sparse audiences the global box office is also in decline. Disney Studio Entertainment releases are a MASSIVE money-maker for the company and account for $11 billion of the global box office market.
The largest division of Disney revenue is TV networks. This branch of Disney operations will be the least impacted however a downtown can still be seen in areas like ESPN which is scrambling for content as many sports leagues have postponed events. With that comes shrinking advertising revenue.
That leaves Disney+ as the company’s real money maker. So far Disney’s streaming service has come out the gate running with 28 million subscribers in January. The fact that most people will be spending the next two weeks at home should hopefully boost subscribers even further.
So what does the future hold for Chapek? As TechCrunch points out, we are entering into a new area of Disney leadership in every way imaginable. Chapek’s focus in the years ahead will be rescuing the company from the coronavirus fallout.
Source: Tech Crunch