More Details Emerge about Bob Chapek’s Firing
Nearly a year ago, The Walt Disney Company finally did the right thing.
Disney’s Board of Directors acknowledged the obvious and fired Bob Chapek.
At the time, some insiders leaked information about the cause of Chapek’s termination.
However, some recent journalism has provided greater insight into what transpired.
New details have emerged about Bob Chapek’s troubled final days at Disney. Here’s what we just learned.
A Crisis of Faith
In August 2022, I wrote an article that admittedly sounded clickbait-y. Its title was, “Wait, Is Bob Chapek Not Safe After All?”
I wrote that article six weeks after discussing the ostensible three-year renewal of The Bob Chapek Show.
Behind the scenes, matters devolved that quickly, although we should be honest that Chapek’s entire tenure felt like one long tire fire.
Many of his moves alienated allies, something we’ll discuss in a bit. Even worse, they frustrated and sometimes infuriated fans.
Chapek wasn’t good at PR, which led to innumerable unforced errors like the Scarlett Johansson debacle.
Even worse, Chapek never seemed to understand that Disney is special.
Often, Disney’s CEO acted like he was running a company that sold any random widget.
In reality, he was in charge of the most impactful storyteller in the world.
Chapek’s behavior eventually caused a crisis of faith among his employees, and that’s the reason why he no longer works at Disney.
We can track his final miscalculation to an admittedly strange day last year.
Chapek Loses His CFO’s Loyalty
On November 8th, 2022, Disney reported its quarterly and annual revenue against an awkward backdrop.
Hurricane Nicole was threatening the entirety of Florida barely one month after Hurricane Ian had devastated parts of the state.
Meanwhile, a national election occurred on November 8th as well.
With the benefit of hindsight, Disney never should have held a quarterly earnings report on that date.
We shouldn’t have one on the same date as a national election anyway, but the hurricane conditions caused even more concern.
Chapek stubbornly held to that date, but his behavior alienated everyone, from investors to fans. He appeared withdrawn and ambivalent.
Veteran CNBC analyst Jim Cramer called for Chapek’s firing. We later learned why.
One of the primary executives who’d lost faith in Chapek was his trusted lieutenant, Christine McCarthy.
While McCarthy positioned herself as a potential replacement to Bob Iger in the press, I quickly questioned her long-term viability at Disney.
At some point, McCarthy turned on Chapek and was reportedly the source for text exchanges with Jim Cramer.
Yes, the CFO at Disney provided Cramer with the intel that ultimately led to Chapek’s firing.
Of course, McCarthy later learned that she’d intertwined her fate with Chapek’s anyway, with Disney eventually parting ways with her.
Ideologically, McCarthy agreed with Chapek about Disney’s direction. It was his actual business moves that alienated her.
Specifically, Chapek hid losses in the Direct-to-Consumer (DTC) business by airing some of Disney’s streaming content on linear channels.
Then, Chapek wrote off the expenses as Linear Networks investments as a way of reducing the still-massive losses at DTC.
Investors are still filing lawsuits over this nonsense ten months later. It was that duplicitous.
To McCarthy’s credit, she wouldn’t commit fraud on Chapek’s behalf.
Chapek’s Other Lost Allies
In researching the final months of Chapek, something that surprised me was how he lost even his most trusted allies.
In December 2021, Chapek lured Horacio Gutierrez from Spotify. Gutierrez became Disney’s General Counsel.
In the process, Chapek replaced longtime Disney General Counsel Alan Braverman, who had worked with the company for nearly 20 years.
Disney also hired Kristina Schake to work in global communications. Schake also hadn’t previously worked for Disney before Chapek hired her.
Effectively, Chapek pushed out several Bob Iger loyalists and replaced them with people outside the company.
That way, Chapek knew he had people who worked for and were completely loyal to him rather than Disney’s legendary former CEO, Iger.
Remarkably, Chapek reportedly lost the support of Schake and Gutierrez.
That’s a polite way of saying that people with zero Disney experience came to the company, watched Chapek work, and didn’t respect him.
There’s simply no way to sugarcoat that, nor is there a method to diminish how Shake and Gutierrez stayed and earned promotions once Chapek left.
Bob Chapek hand-picked these people to run a post-Iger Disney. They’re now still with Disney, while Chapek isn’t.
I could describe Josh D’Amaro similarly. Chapek selected D’Amaro as the Chairman of Disney Parks, Experiences and Products in May 2020.
According to reporting in late 2022, D’Amaro had contemplated leaving Disney because he was frustrated with Chapek.
As a reminder, D’Amaro remains at Disney and could possibly replace Iger as CEO. He definitely has my vote.
Let’s be clear on the point that Chapek’s pandemic-related theme park decisions alienated D’Amaro in roughly two years.
That’s the timeline between D’Amaro earning his dream job and carefully considering a career change.
During his Disney tenure, Bob Chapek turned friends into enemies and allies into opponents.
The Last Straw
Here’s one last anecdote to demonstrate how much Chapek lost the confidence of his co-workers.
During a meeting with the Board of Directors in the fall of 2022, Christine McCarthy provided details about Disney’s financials.
She hadn’t previously discussed this idea with Chapek, who also attended the meeting.
Instead, McCarthy effectively blindsided her boss by telling her boss’s bosses about the company’s dire financial straits.
McCarthy feared that Disney had increased the risk of an activist investor buying stock, forcing its way on the Board, and demanding changes.
While the story didn’t garner much attention at the time, this actually happened in 2022.
Daniel Loeb’s Third Point purchased Disney stock, presented ideas for corporate changes, and earned a spot on the Board of Directors.
Nelson Peltz was trying the same thing right when Iger returned, which isn’t coincidental timing.
McCarthy didn’t want multiple new board members and feared that Chapek wasn’t taking the concerns seriously.
So, she absolutely sandbagged him at a board meeting in hopes that slugging him once would wake him up.
McCarthy hoped to “jar Chapek back to reality” on the subject.
Once that failed, she and other high-level Disney executives effectively pulled a coup d’état on their boss.
By the time Disney fired Chapek, his only remaining ally might have been Kareem Daniel, whom Disney also terminated the following day.
With the benefit of hindsight, Disney’s Board of Directors should have dumped Chapek MUCH sooner.
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Feature Photo:Source: CNBC.com