A long article on CNBC chronicled the rocky transition of the two Bobs at the helm of Disney. Passing the baton from Bob Iger to Bob Chapek and then back to Bob Iger. In between, everything happened: a pandemic, a stock market crash, the launch of Disney Plus, a legal battle with Scarlett Johansson, and the need for a clear political stance in the wake of the so-called Don’t Say Gay Act. This is the story of a difficult regency, which Capek himself defined as “almost three years of hell.”
Difficult retirement
Bob Iger has been trying to retire for some time, but kept putting it off. After blowing out 70 candles and launching Disney Plus to great fanfare and immediate success, the CEO was convinced he was ready to move on. He confidently appointed Bob Chapek as his successor, who managed to gain a good reputation with Iger and the Disney board during the colossal work of building a theme park in Shanghai. The two Bobs had time for at least ten trips to get to know each other and convince each other. Capek had a long history with the company and the ability to keep costs under control and successfully complete a very important project.
The calm Iger trusted his emotional intelligence, making what he later called one of the biggest mistakes of his career. One that he felt obligated to go back and heal for. In fact, he says, he chose the wrong successor. Above all, he did so with conviction, convincing board members that Chapek, given his long track record of success at Disney throughout his 27-year career, did not even need to be placed on probation.
The first doubts about passing the baton reached Capek himself. Just a few weeks later, the new CEO had a terrible suspicion: Iger really didn’t want to leave. The idea was shared with part of the company’s management. The more Iger referred to himself as “Big Bob” and his successor as “Little Bob,” the more suspicion grew that the new CEO would only be an executor of someone else’s ideas to continue going in the direction already set.
But Capek didn’t want this. And soon after entering the office, he realized that he simply could not be. In fact, he was preparing to face the storm of the pandemic.
What about Disney theme parks? The first fight between the Bobs
Covid-19 has hit Disney hard. Iger decided to return and stay until the emergency passed. He publicly stated that his return was necessary to help his successor. It’s a shame Capek didn’t share the same opinion. He replied that he did not need a savior in a clash that was said to be as bad as it had ever been. This will be just the first of many.
After Disney’s theme parks closed, the company found itself with nearly 100,000 employees and had to decide how to handle the furloughs. Capek wanted to hurry and act immediately so as not to lose additional money. However, it was Iger who made the decision to wait until April before laying off employees. He used a very personal method: he called Nancy Pelosi and Chuck Schumer directly to find out how long it would take the government to pass legislation to provide support for employees. After receiving the answer, he decided that it could wait.
Now that Iger has returned to the team, Disney now has two decision-makers: one in charge of operational decisions, the other in charge of creative decisions. Or at least that’s what we thought. The agreement remained just a rumor in the air, although the two did not even engage in personal negotiations regarding their roles.
Susan Arnold, president of the Walt Disney Company, urged Chapek to be patient until Iger’s contract expires. However, from Capek’s point of view, this period of waiting led to a gradual weakening of his position.
Transforming Disney into a technology company
Chapek had a very specific vision: During the pandemic crisis, Wall Street saw Disney Plus as an important lifeline for the company. The only one who could make a profit. The platform, which received good reviews, had an overly complex management structure. There were too many names to weigh in on the products: two content executives, Agnes Chu and Ricky Strauss, were appointed, but Kevin Feige and Kathleen Kennedy, as well as executives from Walt Disney Television and Walt Disney Studios, were also involved. .
Chapek knew that releasing the content directly through streaming would undermine its prestige compared to a traditional theatrical release. Even though theaters were closed and investors were looking at him, he nevertheless decided to bet on the platform, with the idea of positioning Disney more and more as a technology company. Thus, he created the Disney Media and Entertainment Distribution (DMED) division, headed by Kareem Daniel, with veto power over film and television production budgets (thus wresting control away from Iger and his circle). Daniel’s inexperience caused great dissatisfaction within the company, which resulted in many arguments and a very tense atmosphere. The reorganization also took place under quarantine conditions. A distance that increasingly turned into a crack. Old leaders who were losing power turned to Iger with complaints.
Scarlett Johansson vs Disney
Disney was doing well in early 2021 and Chapek finally felt in charge. Scarlett Johansson’s lawsuit against Disney for simultaneous release in theaters and on the film’s platform Black Widow (READ ALL ABOUT IT HERE). For Bob Chapek it was a creative challenge, so it concerned Bob Iger. For Iger, it was the other way around. In the face of this uncertainty, the reaction was rather clumsy: both signed a very harsh statement addressed to the actress (they accused her of only looking for money, without looking at the situation with the pandemic). The reason and tone of the discussion, which was so heated and public, damaged the company’s image. Iger called Capek and ordered him to issue a public apology. Capek refused, convinced that Iger should do it.
With tensions growing between the two (Bob Iger even “forgot” to thank Chapek during his retirement party), Disney found himself embroiled in politics.
Don’t say gay
In March 2022, Disney was accused of not taking a position on the Don’t Say Gay or Trans Act, which was sought by Florida Governor Ron DeSantis. (READ HERE). Disney is among the companies that pay the most taxes in Florida and create the most jobs. Many employees, including animators at Pixar and Disney Animation, demanded a new position.
However, Chapek intended to stay away from the political diatribe, simply reiterating the values that Mickey Mouse House was founded on: content, culture and supporting organizations that benefit the community.
Iger broke with the cautious strategy with a tweet that bluntly said: “If passed, this bill will put young and vulnerable people in the LGBT community at risk.“
The effect in terms of image was devastating. Susan Arnold asked Capek to apologize to employees for not speaking out publicly against the law. His reputation was now greatly damaged.
The latest blow to Chapek’s management has been a sharp drop in Wall Street’s confidence in the streaming giants. Disney shares fell sharply due to the backlash, but the worst was yet to come. Christine McCarthy, Disney’s chief financial officer, was very pessimistic about the company’s November earnings. When Chapek told the board about the report, he criticized McCarthy’s financial management. However, when the negative forecasts came true, Chapek supported a positive interpretation of the data, raising alarms about the shortsightedness of the situation facing the company. The next day, the company’s stock prices fell 13% and the board of directors decided it was time to change the CEO. Bob Iger appeared at the door. The only possible successor.
Source: cnbc