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Disney C.E.O. Bob Iger Is Stepping Down Disney C.E.O. Bob Iger Steps Aside and Into Advisory Role
(32 minutes later)
Robert A. Iger, who delayed his retirement four times in recent years, abruptly stepped down as chief executive of the Walt Disney Company on Tuesday after 15 years at the helm. Disney said he would be replaced by Bob Chapek, a 27-year veteran of the company who has most recently served as chairman of Disney’s parks business.Robert A. Iger, who delayed his retirement four times in recent years, abruptly stepped down as chief executive of the Walt Disney Company on Tuesday after 15 years at the helm. Disney said he would be replaced by Bob Chapek, a 27-year veteran of the company who has most recently served as chairman of Disney’s parks business.
Mr. Iger, 69, will take on the role of executive chairman — and direct Disney’s creative endeavors — to ensure a smooth transition through the end of his contract on Dec. 31, 2021, the company said. Mr. Iger, 69, will take on the role of executive chairman — and direct Disney’s creative endeavors — to ensure a smooth transition through the end of his contract on Dec. 31, 2021, the company said. Mr. Iger had been expected to remain chief executive until that date. As such, the out-of-the-blue passing of the baton to Mr. Chapek, 60, surprised Wall Street and Hollywood. Disney shares dropped 3 percent in after-hours trading, to $125.30.
“With the successful launch of Disney’s direct-to-consumer businesses and the integration of 21st Century Fox well underway, I believe this is the optimal time to transition to a new C.E.O.,” Mr. Iger said in a statement. Mr. Iger added: “Bob will be the seventh C.E.O. in Disney’s nearly 100-year history, and he has proven himself exceptionally qualified to lead the company into its next century.” Mr. Chapek will report to the Disney board, which is led by Mr. Iger.
Disney shares dropped 3 percent in after-hours trading, to $125.30. “It’s only abrupt in other people’s eyes because we haven’t been talking about it publicly,” Mr. Iger said by phone. “I have been discussing this with the board for a number of months. I basically described what I thought my best use was given that our asset base and strategy are pretty much in place. And that was to fully focus on the creative side of our business and making sure that our creative pipelines are vibrant.”
Since taking over as chief executive in 2005, Mr. Iger has led Disney to record financial results, even in the face of economic downturns, the occasional horrendous movie write-off and changing consumer habits that dented ESPN, the company’s longtime profit engine. Last year, Mr. Iger completed a $71.3 billion acquisition that gave Disney the bulk of Rupert Murdoch’s media empire, substantially altering the entertainment landscape. In November, Mr. Iger oversaw the successful introduction of a Netflix-style streaming service, Disney Plus. He added, “That is very, very important, especially as we roll out Disney Plus around the world.” The company’s Disney Plus streaming service, which was introduced in November, has nearly 30 million subscribers in the United States and will arrive in the coming months in Europe and India.
Mr. Iger said he considered elevating Mr. Chapek to an interim role — perhaps chief operating officer, a job that does not currently exist at Disney. “But I did not believe that would bestow on him the kind of autonomy that I wanted him to have during this transition,” Mr. Iger said. Furthermore, “I’m not going to suddenly be working three days a week. My new role is a full-time job.”
And, no, he is not planning to run for president, as he had flirted with in the past. “I think it’s a little late for that,” Mr. Iger said with a chuckle.
Mr. Chapek, who has limited creative experience, became the seventh chief executive in Disney’s nearly 100-year history. “I have absolute confidence in his abilities, as does the board,” Mr. Iger told analysts on a conference call. “I intend to work very closely with Bob. My goal when I leave here is that he will be just as steeped in the creative part of the business as I am today.”
Mr. Chapek said that he had spent “the last couple weeks” talking with Mr. Iger and the Disney board about becoming chief executive. “I share his commitment to creative excellence, technological innovation and international expansion, and I will continue to embrace these same strategic pillars going forward,” Mr. Chapek told analysts.
Before joining Disney in 1993, Mr. Chapek worked in brand management at H.J. Heinz and J. Walter Thompson Worldwide. Raised in Hammond, Ind., Mr. Chapek has a degree in microbiology from Indiana University and received his M.B.A. from Michigan State University.
“Chapek is a really good, no-brainer pick — the other division leaders have been there too short of a time,” Michael Nathanson, a media analyst and founding partner at MoffettNathanson, said in a phone interview. “He’s a really nice person who is part of the Disney culture, which is important.” Other candidates to succeed Mr. Iger included Kevin A. Mayer, chairman of Disney’s direct-to-consumer and international division, and Peter Rice, chairman of Walt Disney Television.
Since taking over as chief executive in 2005, Mr. Iger has led Disney to record financial results, even in the face of economic downturns, the occasional horrendous movie write-off and changing consumer habits that dented ESPN, the company’s longtime profit engine. Last year, Mr. Iger completed a $71.3 billion acquisition that gave Disney the bulk of Rupert Murdoch’s media empire, substantially altering the entertainment landscape. Mr. Iger then oversaw the successful introduction of Disney Plus.
The downside to that success? Nobody seemed to measure up, complicating succession at a company that has a history of bumpy transfers of power. Mr. Iger’s predecessor, Michael D. Eisner, tried to cling to his job, resulting in him eventually turning over a company that was struggling.The downside to that success? Nobody seemed to measure up, complicating succession at a company that has a history of bumpy transfers of power. Mr. Iger’s predecessor, Michael D. Eisner, tried to cling to his job, resulting in him eventually turning over a company that was struggling.
One internal candidate to succeed Mr. Iger, the well-regarded Thomas O. Staggs, abruptly left Disney in 2016 after losing the unqualified support of Mr. Iger and some other board members. Since then, Disney has been engaged in a quiet hunt for a successor, with candidates including Mr. Chapek. One internal candidate to succeed Mr. Iger, the well-regarded Thomas O. Staggs, abruptly left Disney in 2016 after losing the unqualified support of Mr. Iger and some other board members. Since then, Disney has been engaged in a quiet hunt for a successor.
Even among media conglomerates, Disney has a unique mix of businesses, some of which are healthier than others. The company’s movie studio is widely regarded as the strongest in Hollywood and the Disney theme parks are delivering record profits. But the company’s vast consumer products division has been in decline, and Disney’s television operation, which includes ABC, Disney Channel and Freeform, has been struggling with ratings weakness and a lack of breakout shows. Now it has entered the streaming era with Disney Plus. This month, the company said that the service, which is less than three months old, had more than 28 million subscribers. Even among media conglomerates, Disney has a unique mix of businesses, some of which are healthier than others. The company’s movie studio is widely regarded as the strongest in Hollywood and the Disney theme parks are delivering record profits. But the company’s vast consumer products division has been in decline, and Disney’s television operation, which includes ABC, Disney Channel and Freeform, has been struggling with ratings weakness and a lack of breakout shows. Now it has entered the streaming era with Disney Plus, which has started strong but will lose money for the coming years as Disney spends billions of dollars on original content and technological infrastructure.
Mr. Iger started his entertainment career at ABC in 1974. Disney has no mandatory retirement age for chief executives; the company’s mandatory retirement age for board members is 74.Mr. Iger started his entertainment career at ABC in 1974. Disney has no mandatory retirement age for chief executives; the company’s mandatory retirement age for board members is 74.
This is a developing story. Check back for updates.This is a developing story. Check back for updates.