Who Will James Gorman Pick to Run Disney?
On November 29th, 2023, The Walt Disney Company added James Gorman to its Board of Directors.
This move didn’t make for a splashy headline, even though Disney tried.
At the time, Disney faced a showdown with an activist investor, Nelson Peltz.
So, Disney CEO Bob Iger wanted to send a strong message to Wall Street. He was taking Disney’s succession seriously.
Gorman, the Executive Chairman of Morgan Stanley, earned acclaim for his deft handling of that company’s succession.
By adding Gorman, Iger demonstrated that he’s willing to listen to outside opinions from trusted executives.
As of this week, Disney has clarified that Gorman is leading its Succession Planning Committee, something I thought Wall Street already knew.
Apparently, some analysts hadn’t put two and two together on why Disney brought Gorman onboard. So, here we are.
Now, the question becomes a simple one. Who will James Gorman pick to run Disney?
About the Decision
Nobody wants to mess up the succession choice. Iger did that during his final days at Disney, and he instantly regretted it.
Once Bob Chapek became CEO, he quickly consolidated power, leaving Disney executives frustrated by his lack of trust.
Only a small inner circle of Chapek cohorts understood what was happening at Disney, and none of them were in a position to stop him.
Ultimately, Chapek’s unwillingness to listen to others proved his undoing, with Iger returning as Disney CEO.
However, Iger was already in his 70s by this point, causing investors to wonder how long he’d stay.
While Iger signed a contract extension that lasts through the end of 2026, he may prefer to step back sooner.
By adopting this approach, Iger could oversee his successor and help them understand the exhaustive tasks required to run Disney.
Iger had wanted to do this with Chapek, but the latter individual decided to go it alone.
No matter who Disney chooses as its next CEO, I guarantee that’s the first question they’re being asked in interviews.
Will this person call on Iger, Gorman, Disney Chairman Mark Parker, and others for advice rather than acting like lone wolves?
Chapek dismissed the significance of institutional knowledge in any number of capacities. It’s why he’s unemployed now.
Disney’s next CEO must be somehow who trusts others enough to listen when they disagree. Chapek wasn’t that.
Thus, Gorman is seeking a collaborative leader capable of communicating across divisions.
Please remember that as we discuss the known candidates…but remember that Disney could always pull a surprise.
After all, Gorman, an Australian native, is renowned for his global connections.
Evaluating Jimmy Pitaro
Importantly, when Gorman chose a successor at Morgan Stanley, he picked a lifer, though.
Morgan Stanley’s current CEO, Ted Pick, has worked with the company since 1990.
Pick graduated from business school and started with them immediately.
I mention this because two of Disney’s main four candidates are lifers, while the other two arrived within the past decade.
Historically, Gorman has valued stability, which works against Jimmy Pitaro, who joined Disney in 2018.
Otherwise, Pitaro possesses a relatively impressive resume.
Some would argue that he was handed the keys to daddy’s Porsche rather than did anything himself.
Still, the reality is that most cable channels have struggled mightily in recent years.
Somehow, ESPN has remained above the fray, earning record-setting carriage fees and revenue as the rest of the industry dies.
Live sports remain the biggest draw on the planet, and Pitaro has deftly positioned Disney to dominate for many years to come.
His company’s recent deals with the NBA, NFL, and college sports guarantee that ESPN will remain a constant presence in our lives.
Ratings have been strong for all sports, including the NHL playoffs, the NBA Finals, and especially women’s college basketball.
ESPN even dominated this year’s Emmys with eight different victories.
The year has gone so well that ESPN took a rare victory lap after only six months.
Pitaro has been tested in other ways, such as the weird Pat McAfee feud, which led to the termination of a longstanding executive.
Pitaro also isn’t afraid to lay off talent or hire the hot new name, although some of the choices strike me as regrettable.
Still, Pitaro’s resume is exemplary. However, a recent setback and some upcoming renegotiations qualify as stumbling blocks for his candidacy.
Alan Bergman
I’ve been performing a kind of CEO power rankings for a while now.
In reading some of my evaluations from last year, it’s fascinating how much the tables have turned in some regards.
ESPN Chairman Pitaro was facing criticism over some recent negative headlines involving ESPN.
Somehow, Disney Entertainment Co-Chairman Alan Bergman had it even worse, though.
Disney films suffered through a disappointing 2023, which wasn’t anywhere near as bad as some made it sound.
In terms of average box office per release, Disney won the year.
Even with regard to total box office, it only lost by a fractional amount of $80 million.
The other studio released seven more titles to attain that $80 million. Thus, you could argue Disney won the year.
The problem is that Disney didn’t win by as much as usual, which caused heads to roll and the film division to make changes.
Fast forward to now. Disney currently claims the top two films of the year, which also happen to be among the top 30 titles ever.
Not coincidentally, Disney stands as the dominant studio in terms of market share.
So, everything is great now, which makes Bergman look like a better candidate.
Then, we have the thing I mentioned earlier about lifers. Bergman has worked at Disney since 1996. He has Mouse Blood.
Bergman deserves tremendous credit for turning around Disney’s film division by prioritizing quality over quantity.
Still, the lingering memory of Disney’s 2023 struggles probably works against Bergman as a candidate.
The Favorites
A few weeks ago, I described August as Disney’s big month.
In a rare confluence of events, Disney had an earnings report, San Diego Comic-Con, the Emmy nominations, and the 2024 D23 Expo occur within 30 days.
Thus, every CEO candidate but Jimmy Pitaro had skin in the game in late July and early August.
You already know how well Bergman did, what with Deadpool & Wolverine destroying the box office and the Avengers: Doomsday announcement.
Meanwhile, Dana Walden, the leader in the clubhouse to succeed Iger, just finished the best month of her career.
As Co-Chairman of Disney Entertainment, Walden is in charge of the television side of the business.
How did Disney do? Well, the company just earned a record-shattering number of Emmy nominations.
While the company has experienced a handful of setbacks such as The Acolyte, setbacks are expected in such a high-volume business.
Overall, Disney Entertainment is riding a high it hasn’t seen since at least 2019.
Walden receives much of the credit for that, as does Bergman. However, there’s a difference between the two.
Unlike Bergman, Walden only joined Disney five years ago. So, she’s not a lifer.
Do you know who is a lifer? Josh D’Amaro. The Chairman of Disney Experiences joined the company in 1998.
D’Amaro has been with Disney almost as long as Bergman. Thus, they both have Mouse Blood.
How was D’Amaro’s month? Everyone hinged on the success of the D23 parks panel.
I think it’s fair to say D’Amaro aced that test with a high-quality production that delighted fans.
The Chairman also made a smart choice in not revealing the closure of Rivers of America. He wanted a totally positive experience.
I like that the head of Disney Experiences thinks like that.
Who Will James Gorman Pick?
I’ve said the same thing for a while, which makes me a bit uncomfortable.
In covering Wall Street for as long as I have, I’ve noticed a strange pattern.
Once someone becomes a clear-cut favorite and stays that way for too long, they often don’t get the job.
I realize that makes little sense, but many corporations prefer the splashy headline, which is rarely the heavy favorite.
Disney fans learned this the hard way, as several presumed favorites like Thomas O. Staggs fell by the wayside.
Then, a new candidate, Kevin Mayer, surged in popularity and appeared likely to be Iger’s choice.
Somehow, that made the former frontrunner for a few years, Chapek, the unlikely choice.
When Disney announced its new CEO in 2020, most people who spoke with me on the matter expressed shock.
Chapek wasn’t supposed to be the successor. He’d allegedly fallen out of favor.
Thus, it makes me incredibly nervous when I say who the frontrunners are now.
In my evaluation, no matter what Disney says, it has already narrowed its selection to Walden or D’Amaro.
Iger wants plausible deniability here to protect his legacy, which the Chapek selection somewhat tarnished.
Thus, he has brought in Gorman to claim someone else is ostensibly vetting the candidates.
Still, Iger most closely identifies with Walden, an extraordinarily competent executive who earned her reputation in television.
That’s what Iger did as well. He weathered the storm of the rise of cable television. She’s done the same with streaming.
Her admirable performance in a time of such a seismic shift in viewer habits outweighs D’Amaro’s passion for Disney.
Well, it doesn’t to you or me, but to the person in charge of Morgan Stanley, it’s the money that matters.
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