The Walt Disney Company has tapped former CEO Bob Iger to return to lead the company for two years, firing his successor Bob Chapek in a move that shocked the entertainment industry.
Chapek is leaving after the company posted lower-than-expected earnings in the last quarter. Hollywood’s creative community had complained about Chapek’s cost-cutting measures and sometimes heavy-handed approach to talent, while theme park regulars had been unhappy with the price hikes.
Disney’s quarterly financial performance fell well short of Wall Street expectations on both profit and revenue, a rarity, and sent the stock down 12 percent. The shares of The Walt Disney Co. they are down 40 percent this year.
So, back to Iger.
The company’s shares rose 8 percent at the opening bell on Monday
“The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely positioned to lead the company through this crucial period,” said Susan Arnold, chairman of Disney, in a statement.
Arnold thanked Chapek for leading the company during the pandemic, while also being excited about Iger’s stature within the company, which he led for 15 years before his ouster in early 2020.
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Iger has the “deep respect of Disney’s senior leadership team,” he said. He also said he was “greatly admired by Disney employees around the world.”
“The company’s strong content pipeline is a testament to its leadership and vision,” the company’s statement said.
Iger said in the statement that he was “thrilled” to return and “extremely optimistic” about Disney’s future.
“I am deeply honored to be asked to once again lead this extraordinary team, with a clear mission focused on creative excellence to inspire generations through bold and unparalleled storytelling,” said Iger, who is 71.
Controversies in Hollywood, Florida
Iger replaced Michael Eisner as CEO in 2005, and the former TV weatherman won over Wall Street and Hollywood with bold acquisitions and public displays of respect for the creative community and the company’s storied history.
During his 15 years at the helm, Disney absorbed the entertainment businesses of Pixar, Lucasfilm, Marvel and Fox, then launched its Disney+ streaming service. The company is also the parent of ABC, ESPN and Hulu, among other properties.
Welcome back to Disney, @RobertIger!
—@Michael_Eisner
After Chapek became CEO in 2020, Iger remained as chairman until 2021.
Chapek resigns in what has been a tough year for Disney. He faced backlash earlier this year for not using the company’s large clout in Florida to help overturn a Republican bill that would have barred teachers from teaching early grades about LGBTQ issues. The bill sparked a dispute between Disney and Republican Gov. Ron DeSantis.
He was also criticized for his handling of Scarlett Johansson’s lawsuit last year over her pay for Black Widow, an unusually public conflict between the studio and a Hollywood star. The 2021 Marvel movie was released simultaneously in theaters and via Disney+ for a $30 rental.
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There are reports of major layoff plans as the company maneuvers to improve profitability.
Disney+ is currently ad-free, but will launch a new tiered service for US subscribers in December. The basic Disney+ service that costs $7.99 a month will run ads. A subscriber who doesn’t want ads will have to upgrade to a premium service that starts at $10.99 per month, a 38% increase over current prices.
Disney said it ended its fiscal year with more than 235 million subscribers to its streaming services. That was above analysts’ expectations of 231.5 million.
Disney’s stock price is roughly where it was when Iger stepped down as CEO in early 2020, closing Friday at $91.80. That’s about half of its high of just over $200 a share in March 2021.