Tuesday afternoon, the former CEO of Disney Bob Iger, suddenly announced that he was retiring after 15 years, immediately in force. Iger will still act as chairman, but his replacement, Bob Chapek, has gone from an insider figure to an abruptly prominent leading man. Formerly President of Disney Parks, Experiences and Products, Chapek has been working towards this moment for a long time, even if most people outside the company have never heard his name.
The choice came as a shock to Wall Street analysts who assumed that Kevin Mayer, head of Disney’s direct-to-consumer division, was a shoo-in. But while Mayer has become the face of Disney’s premier division, Chapek, who oversaw the launch of Disney’s new Galaxy’s Edge parks, ticks all the boxes the Disney board wants in a director who oversees daily activities of the entire company.
“He is going to get involved with both feet and jump into the deep,” said a former Disney director who worked with Iger and Chapek and asked to remain anonymous, said The edge.
It is crucial that Iger remains as executive chairman and reports directly and exclusively to the board of directors, according to a deposit from the Securities and Exchange Commission. That means Iger is still Chapek’s boss; the only difference is that Iger does not oversee the operational side of the company. With Chapek in as CEO, Iger told investors that “he will spend as much time as possible on the creative side of Disney’s businesses, noting that these areas” will become our top priority in 2021. “Iger will lead Chapek through the succession transition and bring him to the point where he can take over every aspect of the task when Iger retires as executive chairman at the end of 2021
Seen in that light, Chapek makes more sense as a successor. After years of high-risk betting, Disney is in a remarkably stable position with few material changes in the coming years. A supervisor like Chapek can implement Iger’s vision of Disney in the coming years, while Iger continues to work with different heads in creative departments on the future of Disney content.
“If he gets stuck, he may be the trainer,” said the former Disney executive. “The Sith student and Sith Lord. He will hold Chapek’s hand. He will take a position to still be deeply entwined with the company. It is still Bob’s show. “
Understand why Chapek is the obvious choice to replace Iger, as former Disney managers said The edge, it requires a little history lesson. In 2009, Chapek was appointed president of distribution for Walt Disney Studios, making him responsible for the distribution of Disney’s theatrical content, home entertainment and other media such as digital releases. During his time in the home entertainment division, Chapek was crucial in Disney’s distribution agreements with digital platforms such as Apple’s iTunes.
Iger was particularly interested in those details because of the changing landscape of release windows (which means when and where a movie can go after the theatrical release). The shift in technology made partnerships with companies such as Apple and platforms such as iTunes crucial for the company’s growth.
Those distribution offers were Disney’s early trip to the direct-to-consumer market – a sector that Iger sees as the future. As then chairman of Walt Disney Studios Rich Ross said in a 2009 press release: “Bob Chapek has been at the forefront of new technology for years and has the expertise and track record to guide and consolidate our future distribution efforts.”
Chapek excelled and helped develop some of Disney’s most popular straight-to-video franchises, including the direct to video Air Bud tiller series, Buddies. A former director told The edge that Chapek wanted to continue Air Bud“S popularity, and “the Buddies franchise has been developed as a direct-to-DVD series. “The Buddies series was a low-budget, seemingly random series of films for Disney (although the company has a long history of making films with cute puppies), but it presented an IP approach that now dominates Disney’s overall strategy.
Chapek continued to rise through the ranks of Disney. The next step in Chapek’s journey was to take over from Andy Mooney, the former president of consumer products at Disney stepped down in 2011. Tensions grew between Mooney and Iger, according to the director, and Chapek was called in to restore the consumer division. Under the leadership of Iger, Chapek began to reform Disney into the company it is called today. He was directly responsible for developing a brand and franchise-driven strategy for the Disney consumer division – similar to what he did with home entertainment and distribution. Chapek’s leadership came at a time when Disney was quickly moving towards a franchise-first strategy.
“They bring in Bob Chapek to implement the Iger agenda,” the director said The edge. “Bob’s vision was to place the strategic interests of the company above individual divisions. Consumer products would support the creative outlet of the studio, even if the division were to take a hit, because that benefited the Walt Disney Corporation. Chapek and Iger believed that executives are all men and women of the company and that they must support the agendas and priorities of the entire company. “
In essence, Chapek was cleaning the house. Chapek “did what Bob wanted him to do,” the director said, noting that Chapek proved that “he could be loyal, effective and not afraid of making tough decisions.”
By the time Chapek was promoted to chairman of Walt Disney Parks and Resorts in 2015, he was in the good graces of Iger. (He became head of parks, experiences and product division when the groups were merged in 2018.) It was a transition moment for Disney when the company launched its most ambitious project ever: Shanghai Disney Resort. Disney spent $ 5.5 billion on the construction of the park in a country that considered it important in its pursuit of even greater global expansion.
Iger told investors in 2018 that Disney was planning an expansion to meet the “strong and growing demand for entertainment with a high theme”. All of this was headed by Chapek who was with Iger when Shanghai Disney was launched. Iger said he formed a bond with Chapek during the Shanghai launch and problems in the United States.
“The bond that you form at times of great stress, when you share information that you can’t discuss with anyone else, is a powerful one,” Iger wrote in his book The ride of your life.
By 2020, Shanghai Disney became one of Disney’s most successful parks, with sales of $ 1 billion and approximately $ 50 million in operating income annually for the company. It was an important moment for Iger and the company’s development in China, as Iger noted in his recent book. “I was CEO of the Walt Disney Company for eleven years and my plan was to open Shanghai and then retire,” says Iger in the opening of his book. “It was an exciting run, and the creation of this park was the biggest achievement of my career.”
Chapek’s track record on top of his work with the opening of Shanghai Park turned out to be the most important criterion for the acquisition as CEO – his knowledge of every Disney division. “He is deeply integrated into the long-term of Disney and has the track record,” said the director. “He has extensive experience. If you think about it creatively – home entertainment, every movie and TV show, he understands. He then went to consumer products to clean the house on behalf of Bob Iger. Whenever they needed someone to curb the theme parks, Chapek was the chosen man. He has always been an Irish guy. “
The only area where Chapek has less experience is the same area where Iger sees the future of the Disney company: streaming. Disney’s streaming sector – also known as direct-to-consumer, where ESPN Plus, Hulu, Disney Plus and HotStar are located in India – is the flashy sector of Disney. It is perhaps the most important thing about Disney in the ever-changing digital landscape. Investors always ask for it, attention is paid to it at every event and while the streaming wars heat up, all eyes are on Kevin Mayer.
“It feels absolutely necessary for us to do this,” Iger said Bloomberg for the launch of Disney Plus in November. “This is without a doubt the future of the media.”
Many industry insiders and employees at Disney felt that Mayer was the obvious choice for CEO. Some were shocked when Chapek was announced, telling an employee in the direct-to-consumer division The edge they would “stop immediately if Kevin Mayer leaves.” Mayer, who calls the former Disney director as “the best person Disney ever had on the strategy side,” did not comment on Chapek’s promotion.
So why didn’t Iger choose Mayer as CEO? The simplest answer is that although he is an expert in the most talked-about sector of Disney, he does not have much experience with the rest of the company. “Kevin just didn’t have the benefit or the time to access those other companies,” the director said. “And that’s crucial when Disney takes care of the next CEO.”
Mayer still has one of the most important jobs in the company. Before leading the direct-to-consumer and international (DTCI) division of Disney (which started in 2018 after Disney acquired a majority stake in BAMTech and started the acquisition of Hulu), Mayer was senior executive vice president and chief strategy officer . Mayer helped orchestrate four of Disney’s most important acquisitions alongside Iger: Pixar, Marvel Entertainment, Lucasfilm and BAMTech, and played an important role in the purchase of 21st Century Fox.
But although Disney’s streaming strategy has been hugely successful, it’s all the more reason to keep Mayer in the same role. As Iger said yesterday afternoon during the phone call: “With the asset base present and our strategy essentially implemented,” Mayer already has everything he needs to make Disney’s direct-to-consumer company shine. He may be the only one who can. Giving him the lead over the entire company would upset the balance.
The Disney empire that exists today simply could not exist without Mayer and Iger working together to buy the studios and companies they did. The question remains: does Disney need a new Iger right now – if he is still busy developing content at the company for the next two years – or someone who can run his division with Mayer? As Iger told The New York Times after his announcement, “I’m not going to work three days a week at once. My new position is a full-time job.”
“No one will ever replace Iger,” the former Disney director said The edge. “Consider the parallel between Steve Jobs and Tim Cook. Iger will probably be the most incredible IP person in history. Does Disney need a new IP person? Or does it need a person who can use those IP assets and then manage and manage them? That’s where Chapek comes in. “
The history of Disney with CEO transitions is not exactly neat; Irishman’s own promotion in 2005 was overshadowed by the drama that had plagued the former CEO Michael Eisner for years before he was deposed in 2004. The previous heir who apparently Iger, former Chief Officer Tom Staggs, left the company in 2016 after years of being prepared for the position after Iger was suddenly told that the board had no confidence in his ability to manage the company.
But even according to that standard, Iger’s announcement is strange. As before Amazon Studios strategist and analyst Matthew Ball tweeted, Iger has been in a 36-month extension for 14 months, the follow-up was immediate, the news fell on a Tuesday afternoon and it comes months after Iger’s press trip – a strange move for a CEO who plans to resign. The former Disney director told The edge that the announcement was “very surprising and more than a little suspicious.” People at Disney are already wondering if there will be more news.
At the same time, the company has never been stronger. Disney had a record-breaking 2019, collected more than $ 13 billion at the register, and produced eight of the 10 best-selling films in the United States; Disney Plus starts off well with more than 28 million subscribers in just over three months; and the theme parks division continues to generate profits.
With that success, Chapek and Iger begin to resemble a classic combination of a creative personality with a traditional business type. That kind of competition has a long history for Disney, starting with Walt and Roy Disney at the start of the company and continuing with Eisner and former president and chief operating officer Frank Wells in the 80s and early 90s. Chapek and Iger are perhaps the third pair of executives who continue that tradition.
And don’t forget: Iger is not going anywhere. His story continues.