Disney Renews The Bob Chapek Show for Three Seasons
“Whether you like it or don’t like it, learn to love it.”
Yes, Bob Chapek, the CEO of The Walt Disney Company, is strutting around like “The Nature Boy” Ric Flair today.
Chapek just earned a rather stunning and unanimous vote of confidence from Disney’s Board of Directors.
In short, The Bob Chapek Show just earned a three-season renewal. It’s the old Hollywood adage that drama equals ratings.
Why did Disney just go all-in on the Bob Chapek era? Let’s discuss what we know and what we should expect over the next year.
Who’s the Boss?
Quick question: Do you remember who won the Game of Thrones? Yes, I know everyone hated the last season. So, I wouldn’t be surprised if you forgot.
Without spoiling, the person who ultimately claimed the Iron Throne wasn’t on anybody’s short list of viable candidates.
There’s a lesson there that translates to the corporate world as well.
Sometimes, the most viable strategy is to keep showing up and do what you’re told. Then, eventually, good things can happen.
You may not expect that strategy to apply to CEOs. However, as you should know by now, Chapek answers to someone.
Disney’s Board of Directors set up its corporate structure to give itself supremacy after Bob Iger retired.
Susan Arnold sits atop the Disney food chain, and she makes Chapek run all his plans by her.
Iger started the same way as CEO in 2005. He wouldn’t earn the title of Chairperson of the Board until 2011.
Someone you probably don’t even know, John Pepper, was Disney’s chairperson for most of Iger’s early CEO tenure.
Before that, the leader of Disney was former United States Senator George Mitchell, who ultimately chose Iger as CEO.
Disney’s Board of Directors has employed this strategy nearly since the beginning.
After 15 years as Co-Chairperson of the Board, Walt Disney gladly handed the sole title to his older brother, Roy. Many CEOs don’t want the added aggravation.
Conversely, the leader of the Board of Directors wants to maintain oversight over the entire company through the CEO.
That’s how Disney has worked for most of the past 60 years. Only Michael Eisner’s reign worked differently.
I’m Still Standing
Disney’s structure matters mightily in any discussion of Chapek’s role. I say this because Chapek knows his own strengths and weaknesses, as does his boss.
The CEO is acutely aware of his shortcomings regarding creativity and other work-related blind spots.
Chapek works transactionally. Someone will pitch something to him, and he’ll decide whether it makes financial sense. That’s the entire process.
Iger, who came from a creative background, viewed Disney differently, yet he still understood that everything collapsed if the company didn’t make money.
Chapek famously resents any labeling as a bean counter, but even his most ardent proponents would acknowledge that dollar signs drive his decisions.
While Chapek’s detractors haaaaate that about him, it’s what Disney’s Board wants and needs right now.
I don’t need to remind anyone that we’re only 28 months past the pandemic’s start.
As I type this, a Disney theme park remains closed, although it will reopen on June 30. The Parks Division has been chaos.
#Shanghai #Disneyland announced Tue it will reopen on June 30. Tickets are available for purchase beginning June 29. During the initial park reopening phase the resort management will implement enhanced health and safety measures and undertake a careful ramp up of operations. pic.twitter.com/j8RBSJViFB
— Shanghai Daily (@shanghaidaily) June 28, 2022
Disney’s financial infrastructure looked like a lost game of Jenga in mid-2020. Pieces were all over the floor.
Chapek’s measured approach to leadership isn’t for everyone. In truth, it might not be for the overwhelming majority of people.
However, he demonstrates the kind of decision-making that Disney needs right now, a point I’ve tried to make on several occasions while ducking pitchforks and torches.
Why Chapek Now?
Chapek isn’t the sexy choice as head of Disney. Instead, he’s like a good but strict parent. You don’t appreciate him now, but you will more when you’re older.
Even though you don’t like what he’s doing, he’s keeping the company vital during a time of dramatic upheaval in the corporate world.
Yes, Disney’s stock price is down. But, as I’ve mentioned, so are many others. We’re dancing on the edge of a recession right now.
As such, you should expect this fate for Disney for the next several months. The Board of Directors assuredly does.
Their decision reflects the fact that they believe Chapek’s dull but effective brand of gumptious singlemindedness will pay dividends in the long run.
Just as importantly, Disney has headed off a potential conflict before it could gain momentum.
Family scion Abigail Disney had threatened a shareholder battle regarding Chapek’s salary.
While that matter could still percolate into 2023, it will have no impact on Chapek’s job status.
So, Disney just avoided history repeating itself with Roy E. Disney and Michael Eisner.
Also, Disney’s Board of Directors forcefully backed up their prior statement of support for Chapek.
We now know they weren’t merely blowing hot air last month when Chapek unexpectedly fired well-respected TV mogul Peter Rice.
Arnold and her cohorts genuinely believed that was the best decision for the company at the time.
Is Chapek Here to Stay?
From Chapek’s perspective, the Rice firing should function as a cautionary tale, though.
Chapek will presumably sign his three-year contract any day now. When he does, he’ll be contractually locked in as Disney’s CEO through February 28th, 2026.
That sounds nice until you recall that Rice had just signed a contract extension with Disney in August of 2021.
Rice’s agreement theoretically kept him at Disney through 2024, but…you know.
The Board of Directors could always pay Chapek to go away, just as they did with Rice. It’d just cost more.
With Rice, we’re talking about a few million dollars. Conversely, Chapek’s contract guarantees him a “long-term incentive award” worth at least $20 million annually.
I’ll save you the math here. That’s another $60+ million that Disney has just committed to Bob Chapek. It’d be on the hook for that if he leaves.
I don’t think they’d agree to that total unless they planned for him to be here until at least the end of 2023.
Also, Disney just announced to both Floridian and national critics of Chapek/the company that he’s the boss for the foreseeable future.
Anyone who thought they could push Disney around until the company gained new leadership is in for a rude awakening today.
I strongly suspect that Disney’s Brightline announcement yesterday reflects the company’s first step in a more aggressive approach.
Disney IS Florida, and the state needs the company oh so much more than the reverse.
Now, we know that Chapek IS Disney for at least the next 18 months, possibly the long haul. So, all deals must go through him…and Susan Arnold.
The timing of all these events strikes me as significant. Chapek just assassinated Peter Rice, a favorite son of Rupert Murdoch.
In the process, Chapek eliminated any viable internal threats to his job…and he did so with the full-throated support of his Board of Directors.
Perhaps Disney’s overlords were looking for a more aggressive version of Chapek. Well, they’ve got one now.
— Walt Disney Company (@WaltDisneyCo) June 28, 2022
Meanwhile, Disney fans remain perplexed by the entirety of the Chapek regime. In barely two years, he has:
- Picked a fight with Scarlet Johansson
- Picked a fight with the Governor of Florida
- Forced his Imagineers to switch coasts
- Recanted on the forced employee move to Florida
- Raised every theme park price possible
- Recanted on a Brightline agreement years in the making
- Come across as aloof, bordering on robotic
- Blundered virtually every PR move thus far
Apparently, that’s enough to earn a three-year extension at Disney right now. Yes, I’m joking…mostly.
Folks, The Bob Chapek Show just got renewed for another three seasons. I cannot explain the why of it, but I don’t know any Kardashians, either.
So, all I’ll say is that we should expect more absolutely insane Disney headlines over the next 18 months.
Chapek is who he is, and it makes him a source of extreme fascination to many.
In fact, Hollywood held a collective mourning period today as agents recognized that Chapek will continue to run the entertainment industry for a while.
Studio bosses and the Hollywood elite are as mystified by him as the rest of us.
Face facts. The Bob Chapek Show is too good to cancel right now.
Buckle up for what’s sure to be a bumpy ride.
Feature Image: Photo: Matt Stroshane/Courtesy Disney Parks