Chapek Leaves and Iger Returns. Wishes DO Come True at Disney!
For the overwhelming majority of Disney fans, Christmas came early this year.
Bob Chapek is out as the CEO of The Walt Disney Company. His replacement is former Disney CEO Bob Iger, whose retirement lasted exactly 324 days.
Photo: Disney
I know that your minds are blown and that you have questions. Here’s what just happened and why it had to go down this way.
Disney Just Fired the Head Coach
Two weeks ago, the Indianapolis Colts fired their head coach and replaced him with a former player, Jeff Saturday.
The move proved shocking, but it’s also sort of like what just happened at Disney.
With the Colts, the former head coach had lost all respect among his fanbase, who had stopped supporting the team.
From NFL Now: The #Colts hire Jeff Saturday as their interim coach, a move that no doubt highly qualified candidates who are minorities have noted. pic.twitter.com/BU0RgY35LX
— Ian Rapoport (@RapSheet) November 7, 2022
That’s how modern sports works in America. And as we’ve witnessed over the last 24 hours, it’s how major corporations can work as well.
In truth, Disney’s decision eerily mirrors what the Colts just did. The only difference would be if Indianapolis had brought back Tony Dungy, its most successful coach, instead of hiring someone new.
Steven C. Mitchell / EPA
That’s what Disney just did. Less than two weeks ago, Disney’s then-CEO, Bob Chapek, hosted an earnings report that many analysts described as delusional.
One well-known critic, Jim Cramer, went so far as to call for Chapek’s firing.
I laughed that statement off at the time because Cramer is little more than a caricature now. However, someone in either Disney’s or Iger’s camp took note.
The other day, Puck.news caught wind of a story involving Iger. I wrote about this in an article that never even published due to last night’s events.
Photo: Alberto E. Rodriguez / Getty Images
The gist was that Iger had completely soured on Chapek’s leadership. And the article felt like a sign from Iger that he was growing tired of watching Chapek struggle.
Iger also had a financial investment here. In 2021, he sold more than half his remaining Disney stock at nearly $180.
As of last Friday, Disney’s stock sat at barely half that…and Iger still reportedly owned 500,000 shares.
Chapek’s 2022 setbacks personally cost Iger more than $40 million in value.
Unsurprisingly, Iger was okay with Disney firing its head coach, Chapek, and taking back his old job.
Photo: D23.com
The History of Chapek and Iger
Before we get to the why of it, I should remind you of the two men’s history.
Chapek started with Disney in 1993, while Iger joined after a merger in 1996. The two men worked closely together over the years as their careers ascended.
Photo: Disney
Eventually, Iger became Disney’s CEO in March 2005, while Chapek led Disney’s theme parks division starting in February 2015.
In 2017, speculation centered on Chapek as the potential replacement for Iger, as Disney’s theme parks had proven massively profitable during those two years.
Still, nobody could even be certain of Iger’s behavior or motives because he’d previously groomed multiple other successors.
Those former executives had left Disney after Iger chose not to retire. Even with Chapek, Iger hedged on his plans.
Photo: TheWrap.com
At one point, Iger reportedly told another high-level Disney executive, Kevin Mayer, that the job as Disney CEO would be his after Iger left.
However, when the Board of Directors learned that Iger was finally serious about retirement, they vetted both Mayer and Chapek.
Photo: TheWrap.com
Ultimately, Disney’s Board chose the money man, Chapek, over the creative/technical mastermind, Mayer.
I suspect Disney would like to have that one back. Once Chapek earned the CEO title, his relationship with Iger collapsed within a month.
Photo: Getty Images
Simultaneously, Mayer left the company, leaving Disney+ without its original architect.
As the Executive Chairman of Disney’s Board, Iger had finally settled on Chapek as his successor. According to most accounts, he instantly regretted the choice, though.
Conversely, as I mentioned during a discussion of Iger’s autobiography, he praised Mayer more than 10 times in his book. Chapek barely came up.
In short, with the benefit of hindsight, I suspect Iger wants a do-over on this one…and he may yet get it!
Photo: Getty
Why Did This Happen?
Still, the call of Disney CEO wasn’t Iger’s to make. He quit the company last New Year’s Eve, remember? But the choice was still a no-brainer.
Let’s say that you have one basketball game to win. Who would you rather have as your coach, Greg Popovich or some regular guy?
Photo: Gregory Shamus/Getty Images
In the NFL, would you prefer Bill Belichick or that dude Indy just fired?
Finally, if you had your choice of Disney CEOs, would you pick Chapek or Iger?
That last one might be the easiest call of the bunch. Disney’s Chairperson of the Board, Susan Arnold, could keep Chapek, or she could make a big move.
Image Credit: Health Quest Capital
At some point over the past few days, Iger and Arnold discussed his return. Obviously, they settled on agreeable terms for the big comeback.
All these negotiations must have happened quickly, as the news shocked everybody.
Photo: CNBC
Chapek was reportedly about to announce Elton John live on stage for a Disney+ special when the story broke.
News that Bob Iger was coming back as CEO landed in Disney executive’s inboxes while they were together at Dodger Stadium where the ousted CEO Chapek was set to introduce Elton John on a live Disney+ stream, per WSJ. (Instead a host for the Dodgers TV network introduced John) pic.twitter.com/WOQh02rdaN
— Steve Kopack (@SteveKopack) November 21, 2022
During Iger’s 2022 downtimes, his actions have seemed aimless while his frustrations with Chapek have mounted.
Meanwhile, Arnold only recently earned the gig as Disney’s first female Chairperson. She understandably doesn’t want her performance inexorably linked with Chapek’s.
With Iger, Arnold retakes control of her narrative. She’s effectively just traded an underachieving player for a perennial MVP.
The Perception of Chapek vs. Iger
Even better, this one move resets Hollywood and Wall Street’s perspective of Disney. Under Chapek, the company faced another year of negative headlines.
Photo: History.com
Remember that Chapek recently extended his contract through July 2025. He was the unquestioned Disney leader until then if not for this move.
Imagine what 2023 would have looked like in that scenario. Chapek has spent $33 billion on content in fiscal 2022, and that number may go up.
Photo: Patrick T. Fallon/Bloomberg
That knowledge comes on top of the fear analysts have for an impending economic recession.
Should that occur, consumers will have less disposable income to spend on things like Disney+, Disney theme parks, and Disney merchandise.
Source: CNBC.com
Chapek would have spent the entire year playing defense against a rising tide of negative headlines. Meanwhile, his company could have spent one-third of its 2023 revenue on content.
To pay for that stuff, Chapek’s primary move seems to be raising prices at theme parks. Each time he does, fans grow angrier and less appreciative. And we’ve reached a breaking point here.
Photo: Matt Stroshane/Courtesy Disney Parks
Meanwhile, Iger’s opinion has soared during the past three years. Fans already adored him, but now they’ve discovered that the grass isn’t greener on the other side.
Chapek’s failures make Iger seem that much more brilliant by comparison. He seems like a white knight riding in on his majestic horse, ready to save the day.
Photo: The Wrap
Fair or not, the perception of Chapek was that he was a balder Ebenezer Scrooge.
So, Disney and Arnold’s choice here was simple. The company could stay the course with someone who had become a PR nightmare of sorts, or they could bring back a revered former CEO.
What would you do? Exactly. That’s why Bob Chapek is out as Disney CEO, while Bob Iger has returned for (at least) the next two years.
Feature Image: Disney
