A lot has happened in less than 48 hours since the announcement — stock prices are on the rise, celebrities and Disney fans have expressed their opinions on social media, Bob Iger’s salary has been revealed, and Bob Chapek’s “right-hand man” Kareem Daniel has also left the company. This change in CEO was effective immediately as of Sunday night (November 20th) and things are already moving so fast. So what should Iger’s first steps be as Disney’s CEO? Let’s dig into it.
What has Iger already announced?
Bob Iger wasted no time making a plan about his first moves as CEO. As of Monday, November 21st, Iger was already making changes in the company. He sent an email to DMED employees (DMED stands for Disney Media and Entertainment Distribution, a department created while Bob Chapek was CEO) that outlined some of the changes coming to the company, which was shared by CNBC.
He started off by sharing his appreciation saying, “As we embark on the transformative work that I mentioned to you in my email last night, I want to begin by offering my sincere appreciation and gratitude to each and every one of you.” He then goes on to mention that the company will be seeing “organizational and operating changes” soon. Iger intends to make changes that “honors and respects creativity as the heart and soul of who we are.”
Also in this email, Iger announced that Kareem Daniel, Chapek’s right-hand man and chairperson of DMED, would be leaving the company. Iger’s goal is to have a new structure for DMED in the “coming months” and says that “elements of DMED will remain, but I fundamentally believe that storytelling is what fuels this company, and it belongs at the center of how we organize our businesses.”
That is what Iger announced in his first 24 hours in the position of CEO, but what other first steps is he planning to take or should he be taking?
1. Make more acquisitions for Disney
If there is one thing that Bob Iger excelled at during his first run as Disney’s CEO, it was acquisition for the company. According to Yahoo! Finance, Citi Managing Director Jason Bazinet said, “Iger should look to make more acquisitions to bolster Disney’s scale even further.”
During Iger’s first run as CEO from 2005 to 2020 (when Bob Chapek took over), he became known for the acquisitions he brought to The Walt Disney Company. We look at Disney nowadays and associate Star Wars and other Lucasfilm projects, Marvel, and Pixar with Disney — this was all acquired by Disney during Iger’s time in charge.
Pixar, Marvel, and Lucasfilm alone have earned Disney over $33.8 billion in the global box office since they moved under the Disney umbrella, according to CNBC. This does not include production and marketing costs or any benefits from merchandise and theme park additions.
When it comes to the domestic box office, Disney’s overall performance increased significantly as Iger’s time as CEO went on. Below is a chart showing Disney’s domestic box office market share from the year Iger became CEO to when he was about to step down. “Iger is going to be viewed historically as a major mogul,” according to USC professor and editor Jason Squire in 2019.
President of Box Office Analyst Doug Stone also commented in 2019, “Disney is totally different than what it used to be 10 or 12 years ago. Iger came in and was laser-focused on increasing profitability.”
As we can see from the numbers this is true, and much of that is due to the acquisitions he focused on — it makes sense that this should be another focus of his as CEO.
2. Work on making Disney+ profitable
Based on a report from Disney, we learned that the reason this change in CEOs happened when it did was based on the Quarter 4 earnings call that happened on November 8th, 2022. During the call, Bob Chapek reported that Disney+ gained 12 million subscribers internationally, however the company was still dealing with financial losses. Disney+ has been struggling with its profitability for a while now, and this was one of the reasons that led the board to decide to bring back Iger as CEO. So, how should he go about it?
According to Yahoo! Finance, Bazinet (who commented on Disney’s acquisitions above) brought up the idea that Iger should reset Disney+’s long-term financial expectations. He said, “Doing so would allow him to stabilize Disney’s business and then drive upside as the potential turnaround gains hold.”
Bazinet also said, “They may like they need to lower the [streaming] 2024 expectations that they have given the Street. They may know they are not going to hit those or breakeven by the fourth quarter of 2024. If you are going to to make an announcement like that, you are going to want to have someone of Mr. Iger’s caliber to make it more palatable.”
During the Q4 earnings call this year, Chapek said that they expect Disney+ to be profitable by 2024 and Christine McCarthy (Disney’s CFO) mentioned that the launch of the ad-supported tier on Disney+ will likely not have an impact on the streaming profitability until later in 2023. Based on experts who spoke with The Wall Street Journal, investors are growing weary of waiting to see profits from streaming services.
Since this is one of the reasons Iger was brought back as CEO, this should be a focus of his in the two years he is with Disney. His contract as CEO is set to end on December 31st, 2024 which is when Chapek estimated that Disney+ would be profitable.
3. Repair relationships and Disney’s reputation
During Chapek’s time as the Disney CEO, he has been criticized by both experts and Disney fans who visit the parks and watch content. There have been many controversies while Chapek was leading the company including the dissolution of the Reedy Creek District and his delay in comment on the “Don’t Say Gay” law passed in Florida. Not only has Chapek’s reputation been affected during his time as CEO, but the reputation of The Walt Disney Company has been impacted as well.
Disney’s Board of Directors determined that Chapek had done “irreparable damage to his ability to lead, with a string of missteps resulting in the lost confidence of Wall Street and most senior Disney executives, as well as many rank-and-file employees,” according to the New York Times. Disney has stated that the company “exercised its right to terminate without cause”, but this quote from the New York Times is about the reported determination of the Board.
When it comes to controversial topics, Bob Iger was quick to make statements about them including the “Don’t Say Gay” law that was passed in Florida. Iger commented on the subject before Chapek commented on behalf of The Walt Disney Company, and Chapek’s delay caused Cast Member walkouts and the decision suffered criticism from the public.
Celebrities and employees and fans of Disney have taken to social media to share their thoughts on the change in CEOs and based on posts, many seem positive about the change.
Former Imagineer Tom K. Morris tweeted “I don’t cry about why I’m not at WDI anymore bc I did feel it was time to leave, but that guy never even took 30 secs to stop in and introduce himself let alone learn my history or what I had accomplished, something all the other park leaders and CEO’s made it a point to do,” when speaking about Chapek. He went on the mention, “Eisner and Iger (& even Ovitz) made it a point to know who everyone was. They were always very engaged in what we did.”
Matt Braly, an animator for Disney, also commented on Twitter saying, “I cannot tell you how elated the entire animation industry is to see this man gone.”
Based on all of the controversy surrounding Disney while Chapek was CEO, Iger should make working on reputation and relationships with the public and Cast Members one of his priorities when it comes to first steps.
If you want to read more about the recent changes in the company, check out our posts below:
- Bob Iger Is Back at Disney. Here’s What Can Change (and What Won’t).
- Why Disney Replaced Bob Chapek With Bob Iger
- Celebrities React to Disney’s Decision To Bring Bob Iger Back as CEO
- Bob Iger Announces Kareem Daniel, a Lieutenant of Bob Chapek, Is Leaving Disney
- Disney CEO Bob Iger Salary REVEALED
- Bob Chapek Did “Irreparable Damage to His Ability to Lead,” Disney Board of Directors Reportedly Determined
Stay tuned to DFB for updates as Disney goes through this transition.
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What do you think should be Bob Iger’s first steps as Disney CEO? Let us know in the comments.
The post Bob Iger Is Back as Disney’s CEO — What Happens Now? first appeared on the disney food blog.