Iger Calls for Help and Possibly Starts a New Bake-Off
We’ve entered the dog days of summer and reached the trade deadline in Major League Baseball.
Everyone is tired and in desperate need of help. That statement applies to Disney as well, as Bob Iger just made a call to the bullpen.
Iger has called for help as The Walt Disney Company debates what to sell. What just happened, and what does it mean?
Alias Staggs & Mayer
Photo: DIsney+
From the moment Iger returned, I’ve speculated that someone outside the company could become Iger’s successor.
I specifically discussed two candidates, former Disney CFO Thomas Staggs and former Disney Chairman of Direct-to-Consumer & International Kevin Mayer.
Photo: Variety
You don’t need to connect many dots to recognize the rationale here.
Staggs famously won a bakeoff with Jay Rasulo to become the leader in the clubhouse as Iger’s successor.
Nobody expressed surprise over this outcome at the time. Iger and Staggs were so close that their families even vacationed together.
GENE DUNCAN/DISNEY/GETTY IMAGES
Then, almost as suddenly as the bakeoff ended, Staggs followed the same career trajectory as Rasulo.
Staggs left Disney seemingly overnight and out of nowhere. Rasulo has kept a low profile since then, but Staggs ventured out on his own.
Staggs co-founded Candle Media, which has become a powerhouse in the business of mergers and acquisitions (M&A).
BEVERLY HILLS, CA – OCTOBER 16: Honoree Disney executive vice president Kevin Mayer attends CoachArt “Gala Of Champions” at The Beverly Hilton Hotel on October 16, 2014 in Beverly Hills, California. (Photo by Beck Starr/WireImage)
Mayer followed a career path somewhere between Staggs and Rasulo.
Iger appeared to favor Mayer as his choice for a successor at Disney. However, Disney’s Board of Directors favored Chapek.
That’s a bit of speculation on my part rather than a confirmed fact, but I’ve mentioned it before.
Photo: CNBC
Iger’s autobiography mentions Mayer several times but Chapek only in a cursory manner.
Once Mayer lost that gig to Chapek, he left Disney…and his career took an odd trajectory.
Photo: Disney
Mayer became CEO of TikTok just as the American government waged war against the social media platform.
Staggs threw his former co-worker a lifeline by offering Mayer an opportunity to co-found Candle Media.
Since then, the company, powered by Blackstone’s deep pockets, has performed several high-profile M&A purchases.
Photo: Disney
Most notably, Candle bagged ownership of CoComelon and Hello Sunshine, Reese Witherspoon’s production company.
In short, this powerhouse Disney-trained duo has built strong relationships in the field of M&A.
A Sort of Homecoming
Photo: TheWrap.com
Now, a generally reliable news organization has broken the news that Iger is working with Staggs and Mayer again in a professional capacity.
That’s not a shocking revelation in and of itself. Staggs and Iger reportedly repaired their relationship years ago over the Disney split, which worked out better for Staggs anyway.
Meanwhile, Iger always treated Mayer like his most trusted advisor. They maintained a strong working relationship even after Mayer left.
I’ve previously suggested that Disney might prioritize Candle Media as an M&A target during Iger’s next buying spree.
Before then, Disney must enhance its cash flow, though. And that’s challenging now.
Photo: skillastics.com
Disney had planned to pay its long-anticipated losses with its Direct-to-Consumer content, Mayer’s former initiative, with its Linear TV revenue.
Alas, the pandemic delivered a killshot to cable television as we’ve known it, and the network ratings are spiraling as well.
Disney’s Linear TV profit margins are dwindling, a trend I suspect will come into focus during next week’s earnings report.
Photo: simplemost.com
Let’s just say I’m bracing for the worst. Iger himself has described Linear TV as a “no-growth business” and wants to sell.
While I liken this marketing strategy to saying, “Please buy my barely running used car before it breaks down for good,” it’s what Iger has done.
Now, the CEO needs help in selling what some will view as useful assets for at least a few more years.
Photo: Getty Images
Who can help broker relationships with such interested parties? That’s right, folks. It’s the very people Iger trained in the art of M&A!
Iger needs help and has called on his former loyal lieutenants to work some deals.
The Succession Story
Photo: The Walt Disney Company
Dana Walden and Josh D’Amaro likely aren’t happy about any of this news.
Walden holds the title of Co-Chairman of Disney Entertainment, while D’Amaro has been Chairman of Disney Parks, Experiences since 2020.
Photo: orlandothemeparkzone.com
These two executives had elevated themselves to the point that they stood as the leaders in the clubhouse to replace Iger as Disney CEO.
A lot can change in a short period, though. Disney has suffered through a frustrating summer with much of its entertainment lineup.
Haunted Mansion recently became the latest Disney theatrical release to disappoint at the box office.
Meanwhile, Secret Invasion claimed some of the worst reviews ever for a Marvel title.
Most of the blame for these mistakes shouldn’t fall on Walden. After all, one of her primary assignments was FX/Hulu.
Walden deserves credit for triumphs like The Bear and Only Murders in the Building rather than criticism for something like Indiana Jones and the Dial of Destiny.
Photo: Orlando Sentinel
In fact, the strongest proponent of that title was…Bob Iger. Similarly, D’Amaro’s Parks division has thrived despite tumult at the top.
Bob Chapek specifically chose D’Amaro as his successor as Parks Chairman. Then, when Iger returned, he leaned on D’Amaro heavily.
Both should remain in Iger’s good graces indefinitely. But the re-engagement of prior Disney executives is worrisome.
What Is Happening at Disney?
Ostensibly, what’s happening at Disney is simple. Bob Iger wants to sell an ownership interest in ESPN large enough to secure its future.
Mayer and Staggs have proven that they’re masterful negotiations with a massive address book of deep-pocketed connections.
Also, the duo can ostensibly convince Blackstone to splash some money here and there in Disney deals as well.
Photo: Washington Post
I’m not saying that will happen, but those two executives already write checks using Blackstone’s money. So, it’s a possibility.
Iger would love to work a deal wherein he keeps the ABC marketing firehose but also persuades someone else to buy a large portion of Disney’s Linear TV arm.
Photo: DIsney+
I previously speculated about what Iger might sell from Disney’s library of assets.
As advisors to Iger, Mayer and Staggs triple the number of M&A pros negotiating on Disney’s behalf. And that brings us to the hidden part of this story.
Will Mayer or Staggs Replace Iger?
Photo: Playbuzz.com
Why should D’Amaro and Walden worry about this turn of events?
At one point, Iger preferred both Staggs and Mayer as his successor at Disney.
Disney’s CEO is now testing them again to see how much they’ve learned on their own.
Photo: Walt Disney Company
If one of them stands out and agrees to return to Disney, that individual becomes a near-certainty to succeed Iger as CEO.
I’m not ready to say that I expect this to happen, but the odds increased dramatically this week.
Iger has mended some fences and corrected some previous mistakes.
Image: Disney
Now, Mayer and Staggs find themselves with a rare opportunity to rewrite their histories…if so inclined.
Let’s be clear that both executives are well on their way to becoming billionaires on their own. They don’t really need Disney per see.
Still, the lingering appeal of what was once a dream job likely appeals to both individuals.
Disney’s succession plan just added another layer of depth. We’ve got a new undeclared bake-off with at least four participants, two of whom may not even want the job.
Photo: MickeyBlog
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Feature Photo by Kimberly White/Getty Images for Vanity Fair
