In a stunning reversal, the Walt Disney Co.
announced Sunday night that Chief Executive Bob Chapek was out, and will be replaced by his predecessor, Robert Iger.
“We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic,” boardf chair Susan Arnold said in a statement. “The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period.”
Iger served as Disney’s CEO from 2005-’20, and has served as executive chairman and chairman of the board since 2021. Over his 15-year tenure as CEO, Disney rebuilt itself as a media powerhouse, with the acquisitions of Pixar, Marvel, Lucasfilm and its “Star Wars” properties, and 21st Century Fox.
“Mr. Iger has the deep respect of Disney’s senior leadership team, most of whom he worked closely with until his departure as executive chairman 11 months ago, and he is greatly admired by Disney employees worldwide — all of which will allow for a seamless transition of leadership,” Arnold said in the statement.
Iger announced he was stepping down in February 2020, with Disney saying at the time he would continue to “direct the company’s creative endeavors.”
Earlier this month, Disney stock suffered its worst day since 2001 following what one analyst termed a “massive earnings downgrade,” after the company in its fourth-quarter earnings report forecast significantly softer-than-expected, single-digit growth in the coming fiscal year, far below analysts’ consensus view of 25% growth.
That was all despite Disney’s best year for revenue growth in more than 25 years. Disney’s theme parks grew steadily in the third year of the COVID-19 pandemic, but its largest business segment, media and entertainment distribution, suffered a sharp drop in sales last quarter. And while the Disney+ streaming service is rapidly growing, it’s a money-loser. The service will add a cheaper, advertising-supported tier in December in a bid to increase revenue.
Earlier this month, the Wall Street Journal reported Disney’s companywide plans to cut costs, including a near-ban on business travel, a hiring freeze and likely layoffs. “We are going to have to make tough and uncomfortable decisions,” Chapek reportedly said in an internal memo.
Earlier this year, Chapek widely criticized for Disney’s response to Florida’s new “Don’t Say Gay” law. After at first saying Disney would stay out of the political fight, he finally expressed his concerns to Florida Gov. Ron DeSantis and pledged millions to LGBTQ+ causes and paused the company’s political donations in Florida. That drew harsh backlash from conservatives, while many Disney employees participated in walkouts to protest what they said was Chapek’s slow and lackluster response. Chapek apologized to employees, saying “I let you down.”
This past June, Disney extended Chapek’s contract for another three years, with Arnold calling Chapek “the right leader at the right time,” and saying he had the board’s “full confidence.”
Disney shares have fallen about 10% since June, and are down 38% year to date, compared to the 5% decline this year by the Dow Jones Industrial Average
of which it is a component.
In a statement Sunday night, Iger said he was “thrilled” to return.
“I am extremely optimistic for the future of this great company and thrilled to be asked by the Board to return as its CEO,” Iger said. “Disney and its incomparable brands and franchises hold a special place in the hearts of so many people around the globe–most especially in the hearts of our employees, whose dedication to this company and its mission is an inspiration. I am deeply honored to be asked to again lead this remarkable team, with a clear mission focused on creative excellence to inspire generations through unrivaled, bold storytelling.”