Ousted CEO Bob Chapek Has Left Iger With Unfinished Business in Tallahassee
11/23/22 – – The conversations around Bob Chapek’s and Bob Iger’s Thanksgiving dinner tables should be very interesting. Last weekend, just two and a half years after Chapek assumed the CEO role at The Walt Disney Company from Iger, the former was abruptly ousted and the latter resumed his duties at the helm of the entertainment giant. Between the turkey and the pumpkin pie, Chapek will most likely be asking a whole lot of “what if?” questions, while Iger will be wondering, “what now?”
I wouldn’t be surprised if they both get indigestion.
Chapek, who wasn’t even given the courtesy of a quote in the media statement announcing his termination, has to feel abandoned by a board of directors that in June gave him a new long-term contract and an enthusiastic vote of confidence. Here’s what Disney Chairman Susan Arnold had to say about Chapek just five months ago:
“Disney was dealt a tough hand by the pandemic, yet with Bob at the helm, our businesses — from parks to streaming — not only weathered the storm but emerged in a position of strength. In this important time of growth and transformation, the Board is committed to keeping Disney on the successful path it is on today, and Bob’s leadership is key to achieving that goal. Bob is the right leader at the right time for The Walt Disney Company, and the Board has full confidence in him and his leadership team.”
So, what changed?
Unfortunately for Chapek, problems kept piling up over the summer for Disney. As Chapek tried to stay upbeat on what turned out to be a disastrous investor conference call on November 8, activist investors Dan Loeb and Nelson Peltz were circling, losses were mounting at Disney+, and the company’s market cap had fallen from a high of $366 billion to $163 billion. In addition, Florida Governor Ron DeSantis, who Chapek had gone head-to-head with over the state’s “Don’t Say Gay” legislation, was being reelected with overwhelming support from Florida voters, defeating his Democrat challenger Charlie Crist by almost 20 points.
Which brings us to Mr. Iger.
In addition to Disney’s very real structural, financial and performance issues, Iger has been handed a political hot potato. The historic vote of confidence for Republican culture warrior DeSantis has lessened the chances of reconciliation over the Florida legislature’s punishing, punitive changes to Disney World’s preferable tax and zoning status, scheduled to take effect next year.
Will Iger be able to reopen a constructive dialogue with DeSantis? And more broadly, can he convince disenchanted Disney fans and investors that the company is still committed to producing family-friendly, apolitical entertainment content and experiences, while not angering progressive audiences inside and outside the company? Chapek was unable to find that balance.
During the decade and a half of Bob Iger’s leadership (2005 – 2020), Disney established its willingness to take strong political stands. In a September 25, 2019, article in The Atlantic titled “Disney’s CEO Gets Why Employees Want Their Bosses to be More Political,” Iger, who considered running for President of the United States as a Democrat in 2020, said: “I do think companies, particularly large companies, have an obligation to try to solve some of these problems on behalf of their employees and come up with solutions.”
Iger, who has already announced significant management and structural changes throughout the company, is stepping into a toxic political environment more polarized and unforgiving than anything he experienced during his first tenure as CEO. Will he demonstrate a better sense of situational awareness and respect for Disney’s brand identity than his predecessor? Or will he double down on social activism and political confrontation?
Hopefully, he’s addressed these questions and gotten on the same page with the Disney board of directors, who have given him two years to, “set the strategic direction for renewed growth and to work closely with the Board in developing a successor to lead the company at the completion of his term.” His first conversation with Governor DeSantis may set the tone for what’s to come.
How do I think things will turn out? I don’t like to be pessimistic, but I keep hearing in my head the lyrics to The Who’s “Won’t Get Fooled Again”:
“Meet the new boss, same as the old boss.”
I wish all of you and the two Bobs a wonderful, indigestion-free Thanksgiving.
UPDATE:11/29/22 – – Bob Iger in a Disney employee town hall meeting addressed his position on political activism: “We’re not going to make everybody happy all the time, and we’re not going to try to . . . It’s complicated. There’s a balance. We do what we believe is right. Some might criticize and say who are you to say what’s right. When you’re in a job like mine, you need to have a sense of what’s right.”