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Iger Wrestling back Control from Chapek... for now

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  • News Iger Wrestling back Control from Chapek... for now

    "Mr. Iger assured Mr. Chapek that the extraordinary circumstances would be taken into consideration in the board’s evaluation of Mr. Chapek’s performance. But in reality, two hard, unpredictable years will determine if he can hold the job."

    -NY Times: Bob Iger Thought He Was Leaving on Top. Now, He’s Fighting for Disney’s Life.

    --

    The New York Times has just published an article about how Bob Iger is stepping in from his previously diminished role as executive chairman to help manage the crisis at Disney. Either Iger or the Board didn't trust Bob Chapek enough to be able to start his new role in a crisis. This once-in-a-generation pandemic is a difficult test for even the most adept CEOs to pass, to be sure, but it says something that information has suddenly begun finding its way to one of America's biggest newspapers.

    It's important to remember that Iger has always closely managed PR with Zenia Mucha. He even brought her along on his personal book tour when giving interviews. If leaks about the company are getting out, it either means (1) things aren't looking good and employees are terrified, or (2) Iger is letting stuff leak to rehab his and the company's image. Both could certainly be true, but I think the biggest takeaway has to be the goal of Iger's return.

    He's not just engaged in crisis management, but he is analyzing ways to undertake a massive reorganization at Disney. Never one to let a good crisis go to waste, he seems to be all in on entirely reshaping parts of Disney's business. From major cuts in/philosophy changes towards the pilot season and upfront processes in the TV industry, to simply selling off office space (goodbye TDA/TDO?), what better excuse to trim fat and inefficiency than necessity?

    The most important part of a potential reorganization would be the workforce Disney employs. Iger says he does not remember saying Disney is likely to have fewer employees, though the article has independently verified his comments with two other sources. Who would take the blame for cutting the workforce, should such events come to pass? Iger lays the decision at Chapek's feet, saying, "Any decision about staff reductions will be made by my successor and not me." I guess there is a world in which Chapek is not Iger's successor, but for now we know who will play the bad cop.

    I don't mean to take a biased view: efficiencies can certainly be found by cutting back on the bloated executive structures and salaries. Corners should not be cut in the product and experiences they provide to guests, because those decisions can have dire consequences. Every business in the world (except for Netflix, perhaps) is reevaluating how they operate, and Disney is right to do the same. It's rare, however, that such comments about Disney make the New York Times instead of just remaining part of the usual rumor mill.

    Time will tell how Disney fares under the Return of Iger.

  • #2
    Thanks, Alec, for posting the link and for your thoughtful analysis -- particularly about Zenia's PR machine.

    If the Covid-19 crisis follows the extended timeframe that many scientists and economists are predicting, a major reorganization of the Company seems inevitable.

    To that point, some quotes that jumped out from the article:

    "...Disney’s much-imitated [business] model was almost perfectly exposed to the pandemic. The shift from on-screen entertainment into in-person experiences helped Disney become the biggest media company in the world. But those businesses have been impossible to protect from the pandemic. The company’s largest division brought in more than $26 billion in the year ending last June by extending its brands to cruise ships and theme parks. Those are all shuttered now. It has three new cruise ships under construction in Germany, their futures unclear. The jewel in its second largest division, television, is ESPN, which in a sports-less world is now broadcasting athletes playing video games. The third group, studio, had expected to bring in most of its revenue from movie openings in theaters, which are now closed....

    This all means the company is losing as much as $30 million or more a day, the media industry analyst Hal Vogel estimated in an interview. The company borrowed $6 billion at the end of March, a sign both of its desperate plight and lenders’ confidence that it could rebound....

    The mood at Disney is 'dire,' said a person who has done projects with the company. 'They’re covering the mirrors and ripping clothes.'"


    Last edited by Mr Wiggins; 04-12-2020, 11:05 PM.
    "Disneyland is often called a magic kingdom because
    it combines fantasy and history, adventure and learning,
    together with every variety of recreation and fun,
    designed to appeal to everyone."

    - Walt Disney

    "Disneyland is all about turning movies into rides."
    - Michael Eisner

    "It's very symbiotic."
    - Bob Chapek

    Comment


    • #3
      It will be extremely interesting to see how Disney rebounds from this. It's not a matter of if they will rebound, but when and how. I'm sure we can all agree, though, that I trust Iger with a recovery much more than Chapek. I almost feel bad for the guy. While I formally left Disney several years ago, I recently interviewed and received an offer from the advertising agency responsible for Disney+ and Disney Parks. Needless to say, I'm incredibly fortunate in hindsight that I didn't take the offer, as I'm sure the company's furloughs would have hit too close to home.

      Comment


      • #4
        The current pandemic crisis along with a new CEO likely represented too much instability for investors to stomach. Iger was surely asked by the board of directors to step back in to ease some of the panic since he's been at the helm for such a long time and understands the role better than Chapek.

        Comment


        • #5
          No doubt the timing for this switch couldn't have been worse. No matter how anyone looks at this though Chapek will take a huge criticism whether we see it or not and more than likely won't be CEO too long. Just what I think of course but I have seen execs in my work get run out for a lot less.
          These are some of my favorite TRs I have posted

          DL 55th BDAY trip report
          My company had a special night at the park
          WdW trip report with WWoHP
          NYE 2011 trip report
          Mice Chat 7th anniversary
          Leap year 24 hour report
          New DCA trip report
          NYE 2012
          HKDL trip report

          Comment


          • #6
            Originally posted by biggsworth View Post
            No doubt the timing for this switch couldn't have been worse. No matter how anyone looks at this though Chapek will take a huge criticism whether we see it or not and more than likely won't be CEO too long. Just what I think of course but I have seen execs in my work get run out for a lot less.
            Agreed.

            Which, in the world of corporate politics, almost wouldn't surprise me if this whole fiasco was intentional. Iger putting Chapek in charge knowing that the company was going to crash during the pandemic, as a case to say "hey, Chapek isn't worth being CEO" and ultimately ousting him.

            Sounds like some Olivia Pope kind of stuff, but remember, Olivia Pope was based on a real person...

            Comment


            • #7
              I think Chapek was put in an impossible situation. Iger abruptly quit because I think he knew this thing was going to be big, based on what he already heard going on from his contacts in China w/regard to HK and Shanghai.

              There was no successor for Chapek named which means it was very quickly rolled out. Shareholder value has been eviscerated under Chapek will likely be weak for sometime. There is not much that Chapek can do either to improve the situation as his hands are tied. I am no Chapek fan, but I think he is in a no win situation.

              Disneyland may have a big attendance problem, and you couple that with the challenges of a deeply damaged economy, extended social distancing rules, health checks, and general health concerns, it will be an immensely challenging year for Parks and Resorts. My heart goes out to the tens of thousands of hardworking cast members whose lives are being turned upside down.

              It will take extraordinary courage, ingenuity, and creativity to helm Disney and the Disneyland Resort through what is arguably its greatest challenge yet. It will not be a time for fakery, trite solutions, or the usually corporate gibberish that passes for wisdom in this day and age.

              The choices will not be easy, they will not be light. The response will determine the future of the parks and how viable they will be in the future.

              I hope great wisdom will prevail!

              Comment


              • #8
                Bob I. coming back in says a lot about Bob C. leadership. This sounds like a great opportunity to get rid of Bob C. for good.
                keep moving forward

                Comment


                • #9
                  Originally posted by denyuntilcaught View Post
                  Agreed.

                  Which, in the world of corporate politics, almost wouldn't surprise me if this whole fiasco was intentional. Iger putting Chapek in charge knowing that the company was going to crash during the pandemic, as a case to say "hey, Chapek isn't worth being CEO" and ultimately ousting him.

                  Sounds like some Olivia Pope kind of stuff, but remember, Olivia Pope was based on a real person...
                  I really have a hard time buying the idea that Bob I. would set up Bob C. to take any kind of fall. TBD was lauding Chapek as a golden-haired money machine clear back when he was at DHV. By the time he left DCP, you could almost hear a choir of angels sing a God-chord whenever his name was mentioned under the 7 Dwarfs roof. At Parks he hit lightspeed, bringing in profits that made Pressler look like an amateur. The fact that he has always been disliked by the rank & file has just added to his luster among the ruling elite. Marketing took the hit for the Galaxy's Edge attendance debacle; Chapek's star remained untarnished. Sorry, folks -- as much as he makes me hork, I'm not buying this one.
                  "Disneyland is often called a magic kingdom because
                  it combines fantasy and history, adventure and learning,
                  together with every variety of recreation and fun,
                  designed to appeal to everyone."

                  - Walt Disney

                  "Disneyland is all about turning movies into rides."
                  - Michael Eisner

                  "It's very symbiotic."
                  - Bob Chapek

                  Comment


                  • #10
                    Disney+, interestingly, is going to be their saving grace throughout this all. Can you imagine if they just had to eat Onward or loan it out to HBO? Instead, they've bolstered their new product. What they SHOULD be doing right now is accelerating timelines to get this product out across the globe.

                    Additionally, they should be pumping content onto it. I get holding things back to release over time to create the illusion of a continuously updated product, but right now, more archival content is what is needed. Can't open the theme parks? Why aren't all of Walt Disney's Disneyland series from the 1950s on here to tide folks over and teach a little bit of history at the same time?

                    Comment


                    • #11
                      Originally posted by savarese04 View Post
                      Disney+, interestingly, is going to be their saving grace throughout this all.
                      Actually it isn't going to help Disney's finances -- at least not anytime soon.

                      From the New York Times article that Alec cited in his OP:

                      "There has been a glimmer of good news in the introduction of Disney+. The company’s troubled share price jumped about 7 percent in after-hours trading last Wednesday on the news that the streaming service had attracted 50 million subscribers. But the project is still an investment, years away from generating revenue that could replace a big movie opening in theaters. And the service is desperate for new content — at a time when television and film production has ground to a halt."



                      "Disneyland is often called a magic kingdom because
                      it combines fantasy and history, adventure and learning,
                      together with every variety of recreation and fun,
                      designed to appeal to everyone."

                      - Walt Disney

                      "Disneyland is all about turning movies into rides."
                      - Michael Eisner

                      "It's very symbiotic."
                      - Bob Chapek

                      Comment


                      • #12
                        Everyone knew the pandemic was coming. Don’t tell me Iger thought all would be well when he suddenly stepped down.

                        Comment


                        • #13
                          Originally posted by denyuntilcaught View Post

                          Which, in the world of corporate politics, almost wouldn't surprise me if this whole fiasco was intentional. Iger putting Chapek in charge knowing that the company was going to crash during the pandemic, as a case to say "hey, Chapek isn't worth being CEO" and ultimately ousting him.
                          And of course, when Iger comes back to save the day, he will demand much more than a paltry $40,000,000 bonus.

                          There's no question in my mind that Iger is plenty smart enough and plenty greedy enough to plan this out from the start.

                          Comment


                          • #14
                            Disney's outlook is in very bad shape. With any hope of a vaccine at least 1.5 years away. And no part of Disney's businesses looks promising in the near future. Unless things take a remarkable turn for the better, I could see Disney being taken over by another company. Hopefully they would want to keep the theme parks open and not sell the land off to developers.

                            Comment


                            • #15
                              This doesn't look good for Chapek's future. Yanking something away because you get cold feet about his skill as a leader in a crisis ins't exactly a ringing endorsement for him down the line.
                              "Have I gone mad?"
                              "I'm afraid so. You're entirely bonkers. But I'll tell you a secret. All the best people are. "

                              Comment


                              • #16
                                Get rid of both bobs-
                                Reorganization of the Company!
                                IMO
                                Soaring like an EAGLE !

                                Comment


                                • #17
                                  Remember Thomas Staggs?

                                  It seems to me that Iger carefully picks "successors" who are less impressive than he is, then times it so he gets to stay and keep making the monster bucks.

                                  Michael Eisner & Frank Wells had an amazing decade, but even with those two back then, the main purpose of Disney seems to have been to make its CEO (& Wells) as much money as possible. (They doubled Disneyland's admission price in about two years.) Eisner & Iger have obviously had some some extraordinary successes and have overseen some impressive talent like Katzenberg, Lasseter, Steve Burke, Matt Ouimet, but three of these four had to leave because they hit a ceiling.
                                  Last edited by jcruise86; 04-15-2020, 04:09 PM. Reason: 2 typos, but in fairness to me I was drunk when posting

                                  Comment


                                  • #18
                                    Originally posted by Mr Wiggins View Post

                                    I really have a hard time buying the idea that Bob I. would set up Bob C. to take any kind of fall. TBD was lauding Chapek as a golden-haired money machine clear back when he was at DHV. By the time he left DCP, you could almost hear a choir of angels sing a God-chord whenever his name was mentioned under the 7 Dwarfs roof. At Parks he hit lightspeed, bringing in profits that made Pressler look like an amateur. The fact that he has always been disliked by the rank & file has just added to his luster among the ruling elite. Marketing took the hit for the Galaxy's Edge attendance debacle; Chapek's star remained untarnished. Sorry, folks -- as much as he makes me hork, I'm not buying this one.
                                    Look Mr. Wiggins, just let me have my conspiracy theories. They're the only thing keeping me occupied during this time.

                                    Comment


                                    • #19
                                      Originally posted by denyuntilcaught View Post
                                      Look Mr. Wiggins, just let me have my conspiracy theories. They're the only thing keeping me occupied during this time.
                                      I hear that! Fair enough.
                                      "Disneyland is often called a magic kingdom because
                                      it combines fantasy and history, adventure and learning,
                                      together with every variety of recreation and fun,
                                      designed to appeal to everyone."

                                      - Walt Disney

                                      "Disneyland is all about turning movies into rides."
                                      - Michael Eisner

                                      "It's very symbiotic."
                                      - Bob Chapek

                                      Comment


                                      • #20
                                        Sorry Mr Wiggins but I also need to interject here. Your claims about TBD lauding Chapek as some kind of golden-haired money machine are wildly outrageous... the man doesn't have a hair on his head!
                                        "I take no side. I am beyond your worrying and wars. I am unseen. Unknowable. Like a rock in the river."

                                        Comment

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