Ex-CEO Bob Chapek was head of Disney for only two years. He’s just been forced to resign because of inadequate performance and too many internal conflicts. So the reins have been turned over to someone who is all too familiar with leading the company in tough times – Bob Iger.
Bob Iger, Disney’s white knight
Expectations for the new old Bob, however, are high. He needs to put an end to Disney’s recent profit declines without playing around too much with its existing cost structure, because doing so wouldn’t be good for business – whether the amusement park, cinema releases or streaming businesses. But if the past is indeed the best predictor of the future, the chances of the now 71-year-old American of turning things around are looking pretty good.
Expanding the empire with favourites such as «Star Wars»
Iger’s supposed last big acts as Disney CEO included the $70 billion-plus purchase of renowned film studio 21st Century Fox in 2019, as well as the launch of streaming service Disney+ that same year. Its first big series, «The Mandalorian», is still considered the streaming platform’s most popular title.
Bob Chapek takes the helm
His resignation after only two years – as logical as it seems in retrospect – has been a shock to the industry. Disney CEOs tend to stay in office for decades. The last CEO to serve for such a short period of time was Ron Miller (1983 to 1984), whose successor, Michael Eisner, served for 21 years.
I write about technology as if it were cinema, and about films as if they were real life. Between bits and blockbusters, I’m after stories that move people, not just generate clicks. And yes – sometimes I listen to film scores louder than I probably should.
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Bob is back. Between 2005 and 2020, Bob Iger was CEO of the Walt Disney Company. Now he’s once again the leader of the world’s largest media company. That’s what Disney’s board of directors announced on Monday night. And so ends the two-year, minimally successful interim with Bob Chapek, arguably Disney’s biggest blunder in recent times.
The industry magazine Hollywood Reporter calls Iger’s return «triumphant». Another entertainment magazine, Variety, even compares it to Steve Jobs’ return to Apple in 1997, 12 years after having left the company he had co-founded.
Iger has swept in to save the day before, taking the helm from Michael Eisner in 2005. Although Eisner did herald the Disney Renaissance of the 1990s with films such as «The Little Mermaid», «Beauty and the Beast» and «Aladdin», his leadership wasn’t golden. Eisner was considered a hot-tempered character who liked to be in the spotlight, made hasty decisions and showed little self-awareness. In the early 2000s, studios such as Pixar and Dreamworks even threatened to overtake Disney, the world’s largest animation studio. While Pixar and Dreamworks were turning out successful computer-animated films like «Toy Story» and «Shrek», Disney was lagging behind, still producing hand-drawn animations like «Atlantis» and «Treasure Planet», which flopped in comparison. At the same time, theme parks such as Disneyland and Disney World – the company’s flagships – were suffering from shrinking sales and the cost-cutting measures that were implemented to save them. Needless to say, it all ended with a blow-up; Michael Eisner left Disney amid dispute, leaving the stage to Bob Iger, who had been working under Eisner’s shadow for five years, as the number two man in charge.
Under Iger’s calm, charismatic leadership, Disney found its way back to its former greatness. The first thing he did was to restore the business relationship – which had been severely damaged by Eisner – with Apple and Pixar CEO Steve Jobs. Then, in 2006, Disney outright bought the animation studio. «It was not only a deal I desperately wanted, but more importantly, one that Disney desperately needed,» Iger later wrote in his book, «The Ride of a Lifetime». Even Iger is said to have been unaware of the desolate state of Disney’s once legendary animation department when he took over as Disney’s CEO.
Bob Iger is considered one of the most successful Disney CEOs in history, having pulled the company up by its bootstraps before. Source: Thomas Hawk (CC BY-NC 2.0)
With the acquisition, Disney not only secured Pixar’s technical know-how, but also its talents: John Lasseter and Edwin Catmull, old hands at Pixar, were given creative direction of the newly formed Walt Disney Animation Studios. And Iger made sure that – similar to Pixar – it wasn’t studio bosses and producers who set the creative direction, but the artists themselves. In 2020, in what was supposed to be his last official appearance before the Disney board, Iger expressed the importance of letting the artists hold the reins: «It’s tempting to use numbers and analytics to answer all our questions, including creative questions. But I beg you all not to do that.»
Thanks to hugely popular movies such as «Ratatouille» and «Frozen» and Iger’s refreshingly level-headed hand, it wasn’t just Pixar and Disney Animation Studios that flourished. The company’s portfolio also grew. In 2008, Disney teamed up with the comic book giant Marvel before officially buying it one year later. It was a win-win. Thanks to Disney’s financial clout, the company was able to buy back the film rights to popular comic book characters that Marvel had previously had to sell in order to stay afloat financially. Among them were «Spider-Man», the «Fantastic Four» and «X-Men».
Iger also oversaw the $4 billion purchase of Lucasfilm and «Star Wars» in 2012. Disney’s subsequential films were financially successful but divided fans. Though «The Force Awakens» and «Rogue One» met with approval, «The Last Jedi», «Solo» and «Rise of Skywalker» were considered highly controversial. That’s why Iger pulled the ripcord in 2019 and stopped further planned Star Wars films. «After the takeover, the pressure to quickly bring films into theatres was enormous. In retrospect, we left ourselves far too little time to plan a complete, creatively coherent trilogy including spin-offs,» Iger later admitted in his book – words that his predecessor Eisner would never have uttered. Indeed, filming on «The Force Awakens» began before it was clear what would later happen to the characters.
What else did Iger accomplish? In 2016, after several unsuccessful attempts, he was finally able to see his pet project come to fruition; he opened a theme park in Shanghai – Disney’s first in China. Despite accusations of cultural imperialism, ticket sales boomed. In fact, it was Disney’s first park to generate more revenue than costs after just one year. But Iger didn’t stop there; he had older parks renovated. Disneyland California was completely redesigned and new themed areas such as «Galaxy’s Edge» in Florida and Hollywood were created.
Disney World in Shanghai is arguably Bob Iger’s most prestigious project. Source: Wikimedia Commons
Bob Iger eventually decided to retire, believing he had paved the way for a successful future. Nevertheless, it hasn’t been an easy two years for his successor, Bob Chapek. Iger’s shoes have simply been too big to fill. And the waters of the global pandemic too stormy to navigate – though Chapek should have at least steered the ship out of harm’s way. Add to that the increasingly streaming-focused world of media, which has been changing too drastically for Chapek to keep up.
From the beginning, these challenges seem to have gotten the better of the man. Iger was always regarded as a calm, prudent leader who listened to others and valued their input, even if they were on the lower rungs of the corporate hierarchy. For instance, he would visit animation studios to discuss upcoming projects with the artists. The less charismatic Chapek, on the other hand, is said to have kept his distance and been far less approachable. What’s more, he’s gotten his knickers in a twist several times during his short reign.
For example, in a legal dispute with Scarlett Johansson (page in German only), he accused her of being greedy during a global pandemic. Johansson had complained about the lack of revenue sharing because her contract only specified a share of box office profits while Disney was releasing her film through streaming services at the same time it was in theatres. Chapek skillfully ignored the fact that no one could’ve foreseen a pandemic at the time the contract was signed.
Another faux pas was when Chapek tactlessly chose his words in reference to a future theatre release. It happened during his announcement that Marvel’s «Shang-Chi» would be the first Disney-produced film following the pandemic to be shown in theatres only and not simultaneously made available through streaming services. While Corona claimed millions of victims worldwide, Chapek spoke of this theatres-only release as an «interesting experiment».
Another strike against Chapek is the increasing reports of poor working conditions for staff at Disney theme parks. Although such reports did exist during Iger’s era, the situation has seemed to worsen under Chapek. He has also found himself in political controversy, as was the case during the passing of the disputed «Don’t Say Gay» law in Florida. LGBTQ+ employees almost staged a revolt because Disney – one of Florida’s largest employers – hadn’t condemned the bill. Bob Iger, meanwhile, expressed his solidarity with them via Twitter early on.
During his time as CEO, Chapek didn’t acknowledge problems involving the company’s theme parks. In his final appearance before Disney’s board, he even spoke of the «best year ever» for what could be Disney’s most important business division, according to the Hollywood Reporter. It didn’t seem to matter to him that the higher profits were mainly due to massive price increases rather than a spike in the number of park visitors. And while there’s been a hike in ticket prices, cuts have been made in other areas of the media company – but not for the better. Take, for example, the budgets for special effects which have clearly taken a hit for the worse in series such as «Moon Knight» and «She-Hulk».
Industry analysts have long feared that Chapek’s strategies could permanently damage the film and series division and drive the middle class demographic important to Disney out of its parks. At the same time, Disney’s profits haven’t risen nearly as much as Chapek’s own analysts had predicted. And according to the Hollywood Reporter, the board of directors has never really warmed up to Chapek’s character anyway. Most recently, Chapek is even said to have fallen out with his last advocate, Bob Iger.
«I’m extremely optimistic about the future [...] and am pleased that the board has asked me to return as CEO», Bob Iger said in Disney’s press release. That’s not surprising. After all, he’s the one we have to thank for the Disney we know today, on every continent. But the challenges that lie ahead shouldn’t be underestimated. Not even for the white knight. Iger is taking over as CEO at a moment that’s not only difficult for Disney, but for the entertainment industry as a whole.
He must deal with consumers’ declining willingness to spend money in times of high inflation. To make matters worse, revenues from cable TV – still an important sales market in the U.S. – have been falling for years. And while the streaming market is growing, it’s not doing so fast enough to be profitable – not even at Disney. The new old CEO is running out of time. The losses in the streaming sector are still being offset by the profits from theme parks, which are literally booming after the pandemic time-out. But consumer willingness to pay swiftly escalating ticket prices won’t last forever. That means Iger has two years. Two years to correct the course of the mighty steamer with the iconic black, circular ears. Two years to make sure Disney’s tomorrow is brighter than its today.
