It felt like pulling off a Band-Aid: fast and by surprise.
“Did not see this coming – Wowza,” entertainment analyst Rich Greenfield of LightShed Partners tweeted Tuesday, moments after Disney announced that Bob Chapek would take over as CEO immediately, with longtime chairman and CEO Bob Iger moving to an executive chairman role until his contract expires in December 2021.
“The timing was a surprise. We knew Bob was going to leave, we didn’t know it would happen this quickly,” entertainment analyst Michael Nathanson of MoffattNatthanson said in an interview on CNBC.
Everyone knew Iger was leaving — he’d already renewed his contract a few times and affirmed last April that he’d definitely be gone in 2021, and succession planning was well underway. And yet today’s final announcement was sudden. Wall Street wanted to know why now and why him – referring to Chapek, chairman of Disney’s Parks Experiences and Products division.
The news certainly caught many Disney employees by surprise. Kevin Mayer, chairman of Disney’s Direct-to-Consumer and International, was said to have been at Hulu today announcing the promotion of marketing chief Kelly Campbell to president of the streamer, when he cut his visit short to return to the Disney headquarters, presumably to attend a meeting where Iger’s successor was unveiled.
Disney Names Bob Chapek CEO As Bob Iger’s Successor; Iger Becomes Executive Chairman Through 2021
Mayer had been rumored to be a possible successor, as was Peter Rice, chairman of Walt Disney Television and co-chair of Disney Media Networks.
Today’s timing was unfortunate, coming as the market racked up a second day running of big losses due to fears of the coronavirus, which has also indefinitely shuttered Disney’s parks in Shanghai and Hong Kong.
But after digesting the news momentarily, Wall Street seemed OK with the move, or at least couldn’t find anything really amiss.
Nathanson in fact said he believes Chapek is “probably the best qualified person in the company to take this job.”
Parks, Nathanson noted, are focused on data, pricing, engagement and consumers — all hallmarks of the new media world like direct-to-consumer that occupy today’s headlines. Chapek’s division is also big and profitable, despite the coronavirus headwinds.
Chapek, at a hastily arranged conference call this afternoon where both Bobs took to the phones, called the park closures “a bump in the road that we will come through like we’ve come through every other challenge we’ve had.” The long-term health of the business is about consumer “affinity with the [Disney] brand and storytelling,” he said.
The incoming and outgoing CEOs explained and reassured. Iger said he felt the 21st Century Fox deal and launch of Disney+ cemented the company’s position strategically and operationally, and that ensuring continuity on the content side — which will be his focus as executive chairman until the end of 2021 — is the really crucial enterprise before he hands over the reins for good.
“Storytelling is at the heart of what we do,” Iger said on the call. “Getting everything right creatively would be my No. 1 goal when I leave at the end of 2021. I couldn’t do that if I was still running the company day to day.” He said he’ll been working across U.S. and international assets, from the film studio to ESPN to media networks to Disney+. The idea is to make the creative pipelines “rich and secure.” It’s not clear exactly what this means but it sounds like a good idea.
Chapek will be reporting to him for the next 18 months, with everyone else reporting to Chapek.
Chapek has been at Disney for 27 years. He’s run home video and studio distribution and knows consumer products, which now falls under the Parks business. Iger called him “smart, thoughtful” and a innovative risk-taker with lots of integrity. He said they have worked closely and well together.
Chapek said he grew up in Hammond, IN, “the son of a World War II vet and a working mother” and the family visited Disneyland every year, which is where he fell in love with the brand. “That little boy would never have imaged that he would become the seventh CEO in the company’s nearly 100-year history.”
Trying to assuage analyst jitters, Chapek, who began working at Disney in 1993, insisted that DTC is an area he understands.
“I feel that I know the company extremely well and even before I joined the company I started in advertising, then consumer packaged goods, then media packaged goods, so everything has been a consumer-oriented business,” he said. “That is where I played. So I will be able to take that background and experience and employ it in a direct-to-consumer business. It feels directly in my wheelhouse.”
The two Bobs hinted that there would not be much if any corporate upheaval with the shift. “We just had a fairly major reorganization when we completed the Fox acquisition and went into the DTC business, so a lot of that heavy lifting has already been done,” said Chapek.
Iger said today that he and board have been talking succession for several year and Chapek’s name was raised “a while ago,” although the board “did its duty” and also looked at other candidates. “We all felt fortunate to have a candidate like Bob,” Iger said.
Wall Streeters recalled that hell that broke loose 15 years ago when former CEO Michael Eisner and the Disney board named Iger to the top job — with what Wall Street considered little vetting of other higher-profile candidates. In other words, people thought Iger was an odd choice too. They hope lightening can strike twice.
Iger, who published a book The Ride of a Lifetime in September, has been rumored in the past to be interested in going into politics. We’ll see in 2022.