Economy

Disney Brings Back Bob Iger After Ousting Chapek as C.E.O.

In a move that dropped jaws in Hollywood and prompted comparisons to an implausible screenplay, the board of the Walt Disney Company fired Bob Chapek as chief executive on Sunday and announced that Robert A. Iger would return to run the company, effective immediately.

In effect, Disney is replacing Mr. Iger’s handpicked successor as chief executive with Mr. Iger. In a Sunday night email to Disney employees, Mr. Iger said it was “with an incredible sense of gratitude and humility — and, I must admit, a bit of amazement — that I write to you this evening with the news that I am returning.”

Mr. Iger, 71, agreed to a two-year contract after the board determined that Mr. Chapek, 62, 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. Mr. Iger previously served as Disney’s chief executive from 2005 to 2020, a run that was widely seen as one of the most successful in Hollywood history.

Mr. Iger left Disney entirely at the end of 2021, having served as executive chairman for two years to help Mr. Chapek gain his footing. Now, Mr. Iger has been given two years by the board to steer the company on to the right path and groom another successor.

“We thank Bob Chapek for his service,” Susan Arnold, the board chair, said in a statement. “The board has concluded that as Disney embarks on an increasingly complex period of industry transformation Bob Iger is uniquely situated to lead the company through this pivotal period.”

Bob Chapek at Disney California Adventure Park in Anaheim, California, in September. Credit…Alex Welsh for The New York Times

Ms. Arnold called Mr. Iger on Thursday and asked him to consider returning to the company, according to three people with knowledge of the matter, who spoke on the condition of anonymity to discuss private conversations. In recent months, Mr. Iger has made no secret of his extreme disappointment with Mr. Chapek, telling people close to him that he was “devastated” by the downward direction that Disney had taken and that it felt that Disney was losing its soul.

Mr. Iger had delayed his retirement from Disney three times and, in some ways, seemed reluctant to leave the company when he did. At the same time, Mr. Iger was firm when people in the upper ranks of Hollywood asked him in recent months if he would ever return: No.

Since leaving Disney, Mr. Iger has joined Josh Kushner’s Thrive Capital as a venture partner; joined the board of Genies Inc., a crypto start-up that allows people to create digital avatars; started to work on a second book; and spent time on his yacht in locales like the Ionian Sea. It was not immediately clear whether he will cut ties with Thrive Capital.

Mr. Iger said in a statement on Sunday night that he was “extremely optimistic for the future of this great company and thrilled to be asked by the board to return as CEO.”

Mr. Chapek did not respond to requests for comment.

The surprise reinstatement of Mr. Iger and ouster of Mr. Chapek comes in the wake of a disastrous earnings announcement on Nov. 8. Disney blindsided Wall Street by reporting $1.5 billion in losses at its fledgling streaming division, up from $630 million a year earlier. Mr. Chapek said that higher Disney+ production, marketing and technology costs had contributed to the “peak” losses.

In total, Disney generated $20.15 billion in revenue in three months that ended on Oct. 1, a 9 percent increase from a year earlier. But analysts had expected $21.3 billion. Profit totaled $162 million, or 9 cents a share, roughly flat from a year earlier. Excluding items affecting comparisons, per-share profit for the most recent quarter was 30 cents, much less than analysts had expected.

It is almost unheard-of for Disney to miss expectations on both revenue and earnings per share.

Disney shares dropped 12 percent the next morning, in part because investors — and many people inside Disney — were shocked by the happy-go-lucky tone that Mr. Chapek struck while discussing the earnings report on a conference call with analysts. Mr. Chapek’s demeanor struck many as tone deaf, in particular when he started to implausibly talk about how great the response had been to Mickey’s Not So Scary Halloween Party, a relatively inconsequential event at Disneyland. At least one adviser had warned Mr. Chapek ahead of time that his prepared remarks were inappropriately sunny.

Immediately, the CNBC host Jim Cramer began to call for Mr. Chapek’s firing during comments on his show. On Friday, Mr. Cramer said that Mr. Chapek was “incapable of running a fantastic company” and “we need someone new at Disney.”

Mr. Cramer added, “That balance sheet is the balance sheet from hell.”

The comments by Mr. Cramer ricocheted among senior executives at Disney, who became increasingly irate, with a few telling each other that they had lost confidence in Mr. Chapek’s ability to lead Disney out of its slump. Disney shares have fallen 41 percent since January, to about $98, and much of the compensation of senior creative leaders at Disney comes in stock options.

Mr. Chapek was named C.E.O. in February 2020, taking over from Mr. Iger. The handoff did not go smoothly. The coronavirus pandemic forced Mr. Chapek to close most of the company. This year, Mr. Chapek contended with one crisis after another, some of his own making.

In March, Disney became entangled in a heated dispute with Gov. Ron DeSantis of Florida, a Republican, over legislation meant to prohibit classroom discussion of sexual orientation and gender identity through the third grade. Mr. Chapek tried not to take a side at first, at least publicly, which prompted an employee revolt. Mr. Chapek then denounced the bill, setting off a political firestorm, with right-wing figures railing against “woke Disney.”

In June, Mr. Chapek abruptly fired Disney’s top television executive, to howls of disapproval from Hollywood. In August, the activist investor Dan Loeb pushed Mr. Chapek to consider a range of changes, including shaking up the board and spinning off ESPN. (Mr. Loeb later backtracked on a spinoff, saying on Twitter that he had learned more about Disney’s “growth and innovation plans” for ESPN.)

All the while, some of Disney’s most dedicated theme park customers have been growing indignant over price increases they see as nickel and diming. This summer, Disney told investors that theme park profits would have been even higher if not for an “unfavorable attendance mix” at Disney World, which annual pass holders took as an affront. T-shirts, mugs and stickers began selling online bearing the word “Unfavorables” in Disneyland’s signature calligraphy.

Benjamin Mullin contributed reporting.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button