Why Disney Will Miss Bob Iger
In 2019, Time Magazine chose Bob Iger as its Businessperson of the Year. That was only the latest in a never-ending series of honorifics for the man.
Why does the business world revere Iger so much? Let’s take this opportunity to look back at the entrepreneur and his legacy.
Here’s why Disney will miss Bob Iger.
About Bob Iger
In 2005, after an unlikely series of events, The Walt Disney Company chose Iger as its new CEO.
Suffice to say that the choice proved unpopular. Iger has later commented that some members of Disney’s Board of Directors actively campaigned against him.
These individuals felt that a company like Disney should have a proven veteran at the helm rather than a virtual unknown.
Alas, with Disney in turmoil due to an ongoing fight with Walt Disney’s nephew, the company went with a numbers guru.
If that choice sounds familiar, it should. History just repeated itself in 2020 when Bob Chapek earned the role. Unfortunately, his reputation is also that of a bean counter.
With Iger, the concerns stemmed from the fact that although he came up in television, he’d primarily worked in the shadow of Michael Eisner.
Once Eisner entered a blood feud with Roy E. Disney, the company needed someone who could pick up the pieces without ignoring the bottom line.
Again, that sounds a lot like Bob Chapek, doesn’t it? History may be repeating itself at Disney. Then again, Iger’s career arc may prove singularly unique.
For a time, even Iger didn’t think he’d make it as head of Disney. This belief proved oddly helpful to his career.
Since the CEO perceived himself as on borrowed time, he could demonstrate more daring with his moves. And he proved that with his first masterstroke.
The Pixar Purchase
Only film historians remember this now, but Disney struggled early in the 2000s.
After the Disney Renaissance ended, the next batch of animated films like Treasure Planet and Brother Bear fell somewhere between disappointing and disastrous.
Meanwhile, an upstart competitor, Pixar, had earned a claim as the darlings of animation. That’s not a title Disney willingly cedes to anybody.
Some leaders grow combative in such situations and pick a fight with their opponent. Iger quickly demonstrated that his mind worked differently, though.
The CEO went straight to the top of Apple, as Steve Jobs had co-founded Pixar and remained the ultimate decision-maker for the animation house.
Only two years earlier, Jobs had ended Pixar’s distribution agreement with Disney, claiming that he would never work with them again.
Imagine working a business deal with the person who just dumped you. That’s pretty much what Iger did.
Hat in hand, Disney’s new leader went to Jobs and proposed something patently absurd. He wanted to buy Pixar.
Sometimes, the craziest ideas prove the most fruitful. Two days before the second anniversary of Jobs claiming Pixar was done with Disney, Iger got his wish.
Disney purchased Pixar for $7.4 billion.
Everyone in Hollywood and Wall Street immediately took note. Bob Iger had done the impossible, and that made him mighty.
Building the Disney Brand
During the 1980s, several people like Ted Turner and Kirk Kerkorian deduced the importance of intellectual property in the entertainment industry.
Two decades later, Iger mastered this art. First, he recognized that Disney hadn’t developed enough brands of its own during the early 2000s.
So, Iger evaluated the marketplace and identified several targets that fit the Disney brand.
Pixar was obviously the first, but it worked as the first foothold in a grander plan. However, it was Iger’s next move that proved his most savvy.
In 1995, Marvel Entertainment nearly went bankrupt, as in completely out of business. The New York Stock Exchange actually delisted the company. That’s a death sentence.
Then, the comic book company spent the next decade trying to claw its way out of financial ruin.
Iger saw glimmers of hope amongst the wreckage. He recognized the sheer volume of potential intellectual properties (IPs) available.
A storytelling company like Disney could mine those IPs and eventually enhance their value. Ideas like this are why we have Guardians of the Galaxy.
Whereas most people saw a talking raccoon and a laconic tree, Iger and his staff saw merchandising opportunities.
Disney paid $4 billion to purchase Marvel Comics in what is quite possibly the best entertainment acquisition of the 21st century.
Analysts believe that Disney has already earned $10 billion from Marvel merchandise sales alone. And that’s just one part of the Marvel revenue machine.
Two years ago, CNBC suggested that Disney has earned $18 billion from its $4 billion purchase!
Marvel has become THE most identifiable modern Disney brand, although there’s definitely other competition…
The Other Two Big Ticket Items
Iger knew almost immediately that he’d struck gold with Marvel. Along with Pixar, those two acquisitions served as positive reinforcement for his strategy.
So, Disney’s head scanned the marketplace for other undervalued IPs that also fit the brand.
Many people on this planet have managed noteworthy achievements, but George Lucas stands in rare air.
His iconic work, Star Wars, has reached so many people that they dedicated a calendar day, May the 4th, to honor his creation. How many other storytellers or entrepreneurs can say that?
Alas, Lucas turned 68 in 2012. He knew he wouldn’t work forever. So, when Iger approached him about buying Lucasfilm, the director said yes.
Now, Lucas’ child suggests that he feels buyer’s remorse about this transaction. From Disney’s perspective, it was another masterstroke, though.
The seventh and ninth films in the Star Wars saga shattered box office records, while The Mandalorian has…well, I’m getting ahead of myself.
Suffice to say that Disney has again already turned a profit on its Lucasfilm purchase, and I say that before an Indiana Jones movie has even been released.
The Final Proof of Genius
In November of 2017, word leaked that Disney had pulled off another coup. The company would purchase all significant assets of Fox.
That’s the entire Fox film and television library, including its most valuable asset, The Simpsons.
Somehow, Iger had negotiated a price so low that Fox’s Board of Directors received word from outsiders that it should open up the bidding.
Eventually, an initial purchase estimate of $52.4 billion soared to $71.3 billion.
Disney almost immediately got $9.6 billion of that back by dumping some assets that the FCC wouldn’t let it keep, though.
So, Disney effectively swallowed a competing media company for about $61.7 billion.
What was Iger’s plan here? The CEO has always remained several steps ahead of the competition.
Iger had evaluated Netflix’s distribution model and recognized it solved Disney’s most glaring weakness.
Disney relies heavily on advertising revenue and carriage fees gained from network and cable television.
By 2017, analysts had recognized that cable television was slowly dying.
Iger cut a $71.3 billion check to get a jumpstart on the service we now know as Disney+.
The CEO had correctly deduced that a streaming business model would require even more IP.
When he went out and got it, Iger positioned Disney in a way that other media companies couldn’t match.
Even now, companies like NBCUniversal and WarnerMedia are still trying to organize their licensing and technological issues.
Conversely, Iger didn’t just buy content. He also purchased BAMTech, the company with the best streaming media infrastructure other than Netflix.
Not coincidentally, Disney+ hit the ground running on its debut and has already gained 118 million subscribers in barely two years.
Bob Iger set all that in motion more than four years ago. He’s that far ahead of the game.
Thank You for Everything, Mr. Iger
On December 31st, Bob Iger will sign out of his Disney account for the final time as the Executive Chairman of the Board of Directors.
He’d previously ceded the title of CEO to Bob Chapek in February of 2020, just before the pandemic started in North America.
Iger recently posted a parting letter to his co-workers at Disney. Here are some of the most important takeaways.
His tenure succeeded “by producing the finest in content and experiences, embracing cutting-edge technologies, and expanding our presence around the world.”
He’s also proud that Disney led by example. In his words, his company has “also endeavored to tell stories that reflect the rich diversity of our world, nurturing a multitude of perspectives, both in front of and behind the camera.”
Finally, Iger adds the following: “As the world continues to evolve and transform, we will always gravitate to stories that bind us together.”
There’s some context to that, as he recently stated publicly that he hopes Disney always prioritizes story over anything else like, say, money.
That’s the one difference between Iger and his successor, Chapek, thus far.
All other things being equal, Bob Iger appreciated that storytelling has always differentiated Disney from its peers.
The Walt Disney Company made an astounding amount of money under Bob Iger.
However, Iger’s real legacy involves those Pixar, Marvel, Star Wars, and Fox stories already told and yet to be seen.
Feature Image: AFP