Bob Iger is back as Disney CEO, but his return is hardly heroic

Disney CEO Bob Iger

Eric Grunwedel

NEWS ANALYSIS — The sudden and unexpected departure of Disney CEO Bob Chapek and the return of the media giant’s velvety former CEO Bob Iger underscores the harsh reality that good deeds and intentions in corporate Hollywood are often in the eye of the beholder.

Not long ago (February 25, 2020), Iger quietly announced that he would be stepping down as CEO after 15 years, to be replaced by Čapek, a former head of the home entertainment sector who moved from Blu-ray Disc fan to head of consumer products and business units parks and amusements.

Bob Chapek

At the time, Iger appeared to be in no rush to retire completely, having already written a memoir and given up his US presidential aspirations. He has twice renewed his employment contract with the Disney board (most recently until December 31, 2021), despite originally planning to retire in 2017.

But his transition from hands-on CEO to passive “executive chairman” came at the most convenient time for him. Iger had the guts to realize that a rising global pandemic tsunami was about to hit not only the United States but the world, shutting down much of what was near and dear to Disney: theatrical films (Disney dominated the world rent in 2019 with ticket sales of $11 billion), cruise ships, resorts and theme parks.

All four of these businesses effectively closed overnight in March 2020, leaving Capek with a bunch of long-term and short-term disasters. Indeed, Shanghai Disneyland, Disney’s sixth global theme park and China’s first foreign-invested theme park ($5.5 billion under Iger), remains closed due to Covid concerns.

Undoubtedly, Čapek made some arbitrary mistakes. Scarlett Johansson has publicly feuded for the first time after the actress filed a lawsuit accusing Disney of breaching a contractual agreement on her release Black widow on Disney+ at the same time as the theatrical release. The parties settled out of court.

Capek then sat too long in the political fray in response to Florida Gov. Ron DeSantis’ controversial “Don’t Say Gay” law, aimed at preventing discussion of the topic in public elementary schools. Iger condemned the bill from the start.

On the other hand, Iger led the $71 billion acquisition of 21st Century Fox, inheriting a studio with significant debt ($13 billion) and little cash-flow prospects. The long-delayed branded sequel, Avatar: The Path of Water, will finally hit the big screen next month. And the end result of the expensive purchase is the destruction of a vaunted, highly respected film studio with a rich Hollywood heritage.

“Many of Disney’s current problems were born out of Iger’s move into streaming to catch up with Netflix (after years of licensing the service for first-run movies). Besides, he did nothing but undercut Čapek at every turn, instead of supporting the man he supposedly handpicked as his successor,” said a source familiar with the studio.

Disney’s direct-to-consumer focus is on all media spaces. The segment’s $1.5 billion operating loss through Oct. 1 may have caught Wall Street off guard and happened on Chapek’s watch. But they arose under Higera.

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The increase in operating loss was due to higher losses at Disney+ and lower results at Hulu, partially offset by improved results at ESPN+. The Fox acquisition helped boost Disney+’s global subscriber base thanks to India’s obsession with cricket (Disney+’s Hotstar owned the rights to broadcast the Indian Premier League cricket), but also left Disney with 33% less than owning Hulu outright.

Iger is now set to exercise an option to buy the remaining stake in NBCUniversal for $27.5 billion on January 1, 2024. The latter’s parent company, Comcast, believes that stake is now worth a lot more. CEO Brian Roberts is also interested in acquiring Hulu.

Even so, Iger’s return to the spotlight and largely avoiding the latest two-year storm is hardly heroic.

https://www.mediaplaynews.com/bob-iger-is-back-as-disney-ceo-but-his-return-is-hardly-heroic/ Bob Iger is back as Disney CEO, but his return is hardly heroic

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