Photo by Kimberly White/Getty Images for Vanity Fair
- Bob Iger returned to Disney as CEO in November, ending Bob Chapek’s rocky tenure.
- The change comes as Disney contends with mounting financial challenges and likely layoffs in 2023.
- Here’s everything you need to know about what led to Chapek’s ouster and what comes next.
In one of the most dramatic reversals in corporate history, the Walt Disney Co. board reinstated Bob Iger as CEO in November, ousting his predecessor Bob Chapek.
The return of Iger, who had previously served as CEO for 15 years before Chapek took over, set off a flood of Wall Street investor notes focused on the challenges facing Iger — analysts and Hollywood industry observers also scrutinized Chapek’s rocky tenure and his selection as CEO.
Here’s a rundown of what led to the change at the top of one of America’s most beloved companies and the challenges that lie ahead for Iger in what was announced to be a two-year tenure, from finding a new successor to fixing Disney’s streaming business and repairing the company’s relationships with Hollywood.
What went wrong under Chapek and how Iger’s return happened
Iger’s return cut short the tenure of his protege Bob Chapek, who had spent less than three years in the role. Insider reported that Disney executives had complained to the company’s board about Chapek’s leadership.
Chapek’s fumbles were wide-ranging. Disney had just reported a $1.5 billion loss in its streaming business on a November 8 earnings call. Earlier in the year, the company faced backlash from customers over price increases at its theme parks. Separately, employees walked out in protest over Disney’s reluctance to take a strong stance against Florida’s “Don’t Say Gay” law.
Chapek had also alienated creative execs and Hollywood by taking content budgets away from creative execs at Disney and by releasing movies on streaming at the same time as in theaters during the pandemic; the move resulted in a high-profile legal spat with Scarlett Johansson and her reps.
The company also faced pressure from activist investors like Daniel Loeb to cut costs and make big strategy changes.
It didn’t help that Chapek, while he was considered an effective operator, was also seen as less charismatic and communicative than his popular predecessor. Wall Street faulted him for waiting until after the 3Q earnings call to announce that layoffs were planned, for example.
More on Chapek’s tenure and Iger’s shocking return:
- Inside Bob Iger’s return to Disney: A senior executive’s outreach to the former chief followed months of complaints to the board about CEO Bob Chapek
- Former Disney CEO Bob Iger battled the company’s board over succession, insiders say, and was unhappy about the transition of power to Bob Chapek
- Disney has a new CEO: Bob Chapek. Wall Street breaks down the former parks boss’ strengths and weaknesses.
- What went wrong at Disney: Insiders reveal weeks of ‘internal strife and outrage’ over CEO’s messaging on Florida ‘Don’t Say Gay’ bill
Why Iger’s top priority will be a solid succession plan
Iger’s return reassured employees who were familiar with the Disney vet but also drew criticism, considering his previous remit as CEO included finding and grooming his replacement. So the pressure’s on for him to carry through on that task before his two-year contract is up (though the board could always extend his contract again, considering it already did so four times before).
During Chapek’s first year as CEO, Iger remained as executive chairman of the company, and there were tensions between the two executives. The Wall Street Journal reported that Iger undermined Chapek’s leadership.
While many in Hollywood cheered Iger’s reinstatement, the move also quickly drew criticism from some on Wall Street over Disney’s succession planning and questions about whether the company even has execs who could be groomed to succeed him in two years.
More on succession at Disney:
- Disney succession plan is a top priority for returning CEO Bob Iger: ‘People would struggle to write down three names’ at the company who could step up
- 6 key Disney executives working with Bob Iger to remake former CEO Bob Chapek’s business structure
- Hollywood insiders say there’s growing tension at Disney as CEO Bob Chapek chafes at Bob Iger’s ‘long goodbye’
- Disney insiders reveal why Bob Chapek fired TV chief Peter Rice and what it means for CEO succession plans
How Iger can strengthen Disney’s streaming business and control costs
Iger returns to a streaming landscape that’s more competitive since he left, with new entrants like Netflix’s ad-supported tier fighting for viewers’ share of wallet. Disney, which in December launched its own ad-supported Disney+ offering, has enjoyed strong streaming growth, but Wall Street cares more about profitability now.
Iger previously scored wins for Disney with acquisitions of Lucasfilm, Pixar, and other companies but told Disney staffers at a November meeting not to expect more big acquisitions. He also said a hiring freeze announced by Chapek would remain in effect.
Stepping up to lead the company amid a tough economic environment, Iger will have to address not only steep losses in Disney’s streaming business but also big decisions like whether to seek full ownership of Hulu, now part-owned by Comcast; how to manage content distribution across Hulu and Disney+; and whether to keep or sell ESPN.
Read more about Disney’s streaming business and M&A plans:
- Disney insiders are cheering the return of Bob Iger. But they know he can’t save them from layoffs.
- Hulu insiders are confused and frustrated about their future as Disney and Comcast battle it out for control of the streamer
- Bob Iger’s return to Disney could dramatically change what a Hulu deal looks like, Comcast insiders say
- Disney and Netflix are battling to sell ads on their cheaper versions, but Disney’s pricing and seasoned sales teams are winning with brands
- The biggest media targets and buyers in 2023, as speculation swirls around Disney’s next move under CEO Bob Iger and how Warner Bros. Discovery can shed debt
How a sluggish box office and talent demands will create new challenges for Iger
Iger wasted no time in making changes, ousting Kareem Daniel — the exec who led distribution under Chapek’s unpopular business restructure — and announcing plans to give Disney creative executives more power.
But he also has to deal with a box office business that’s been scarred by the pandemic and mollify Hollywood talent still miffed by some of Chapek’s moves. Recent animation releases have flopped, and there’s been a slowdown in Star Wars releases.
Long considered one of Hollywood’s most successful CEOs, Iger will need to marshal all of his business acumen, cultural savvy, and management skills to usher Disney through a challenging economic landscape and transition the company to a strong new leader.
Read more about what Disney, Hollywood, and Iger expect from Iger:
- Disney CEO Bob Iger will overhaul predecessor Bob Chapek’s business structure — here’s why company insiders hated it and what they hope will change
- ‘Avatar: The Way of Water’ failed to live up to box office expectations on its opening weekend, reports say — putting pressure on Disney’s $2 billion bet
- Disney is in an animation slump after ‘Strange World’ and ‘Lightyear’ flopped. Bob Iger may have the magic touch to turn it around.
- Bob Iger needs to fix Disney’s ‘Star Wars’ problem
- Bob Iger signals support for LGBTQ rights on company call. Here’s why that’s so important for Disney’s future.