Reinstated Disney CEO Bob Iger shocked the Hollywood landscape, for his recent return back towards The Walt Disney Company before the year is about to close out. Iger was formally CEO from 2005 to 2020, and then left the company at the end of December 31st, 2021 that was originally being run by Bob Chapek and ousted from the company.
Iger is now under a two-year tenure and before hand, his regret was not finding a real successor during his past tenures with the company. Chapek rose throughout the ranks and only last as CEO for 3-years. As it was reportedly that Disney CFO, Christine McCarthy that drew the final straw for Chapek to step down. McCarthy still remains the head CFO even when Chapek was formerly the Disney Parks, Experiences and Products Chairman.
Even the result of this past Q4 FY 2022 earnings call meeting was also put the final nail in the coffin, for also Chapek’s departure as well. Their has been no confirmed replacement after Iger’s two-year tenure but, it has been reportedly either Dana Walden or Josh D’Amaro for the next potential CEO position.
When Iger came back and he wasted no time for the corporate’s restructure and with the exit of Kareem Daniel, who was under Chapek’s banner for some time now. Daniel was the head of Disney Media and Entertainment Distribution and Iger wrote in a company memo last week from the following, “Our goal is to have the new structure in place in the coming months,” he continued. “Without question, 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.”
Now with Iger back at the helm of the company as he laid out his playbook during Monday’s Town Hall meeting with fellow employees and he addressed several topics. He was careful and remained optimistic not to give to much right off the bat, and is known being a notable creative type of business leader in the global entertainment industry.
Iger opened up the meeting from the following:“I stand here today with an incredible sense of gratitude and humility and excitement,” Iger told the audience of Disney executives and cast members. “I know that this has been an incredibly challenging time and an awful lot has been asked of you. Now that I have assumed this role again, I do have a sense of priorities, but I also feel a sense of urgency. There’s a lot that we have to do – and quickly.”
The industry has well known that Iger has always be a “eternal optimist” and even shared it in his 2019 autobiography, “The Ride of a Lifetime” that has been on sale at your favorite retailers to pick up and purchase. Disney is turning 100 years old in October 2023 but, the celebrations are kicking way early in January 2023. Iger did refer and to demonstrated its ability to be resilient, and so he said, “that’s what we are going to be now; we are going to be resilient.”
Disney Parks Reservation System:
Since Iger’s departure at the end of 2021 as the Disney Parks Reservation system was implemented the height of the pandemic. As the system is 3-years old now and has caused a lot of social media outcry and criticism throughout the fandom, for those who are for and opposed towards it. Iger made it clear, and hasn’t used the system personally but, he wants to speak towards Disney Parks, Experiences and Products Chariman, Josh D’Amaro before any plans are put into place. Guests can no longer buy a ticket and show up to the parks, and you must now choose which park you want to visit and make a specific reservation for that.
It is unclear what will happen with the Park Pass Reservation system at this time and their is “rumored” suggestions that Disney is tinkering with a overhaul in early 2023. In the Q4 FY 2022 alone, Disney Parks, Experiences & Products had $7.425 billion in revenue. Compare that to the same period in 2021, for a whopping 36% increase in revenue. In previous earnings reports, as Disney did note how increased guest spending, due sometimes to higher average daily hotel room rates or other increased costs, is what has increased operating income growth in the division.
Hiring Freezes Will Still Continue:
Before Iger came back and when Chapek was CEO, as earlier this month put in place for hiring freezes, cost cutting and layoffs. Disney shares fell nearly 38% this year. As you can read the full company memo here for details. “It felt like it was a wise thing to do in terms of the challenges, and at the moment, I don’t have any plans to change it,” Iger said Monday of the hiring freeze. According to sources who heard the town hall and asked to remain anonymous because the event was private being reported from CNBC.
Disney’s Battle With Florida’s Legislation and Politics:
During Chapek’s tenure and the company swiftly got into the politics side of business within Florida’s legislation. As the main elephant in the room was the whole controversy over the de-announcement over the “Don’t Say Gay” bill over the company’s staff and uproar for the backlash and the company’s assets as well to.
Chapek’s fumbling of the topic was reportedly an early point of contention with Iger. Chapek even addressed Florida’s politics at the WSJ Tech Live Conference 2022 in October and stated:
“I think the lesson that we probably always knew [was] it’s all about the cast,” Chapek said. Murray asked whether that meant that Chapek misjudged how employees would react. Chapek said, “What I would say is that we were reminded by the passion of our cast reaction, and how important their sentiments are on these issues, in terms of making them feel that they were part of the Walt Disney Company and could relate to the products that the Walt Disney Company puts out.”Former Disney CEO, Bob Chapek
On the flip side for Iger and here’s what he detailed down below.
He stood on the company’s LGBTQIA+ for their diversity and inclusion, and without hesitation, “One of the core values of our storytelling is inclusion, [and] acceptance, and tolerance. And we can’t lose that, we just can’t lose that.” “How we actually change the world through the good must continue,” he went on to say. “We’re not going to make everyone happy all the time, and we’re not going try to. We’re certainly not going to lessen our core values in order to make everyone happy all the time.”
Iger concluded his response by saying, “At one point I said ‘We do what we believe is right,’ and someone criticized me say ‘Well who are you to say what is right?’ Well, when you’re in a job like mine where you are responsible for the storytelling that many of you are … responsible for you get paid to have a sense [of] what is right. Not everyone will agree with you, that’s just not the way the world is these days, but it doesn’t mean you should stop trying to do the right thing.”
Iger pointed to films like “Black Panther” and “Coco” as examples of Disney projects that “changed the world for good.” Iger said that the company’s creative decisions won’t make everyone happy, but that its studios will not lessen their core values. “It’s complicated, and there’s a balance,” he said.
Florida lawmakers, including Gov. Ron DeSantis, and who got recent re-elected for the mid-term elections for the state to pass a bill that would dissolve Disney’s Reedy Creek Improvement District. First established in 1967 so that the company could develop infrastructure and be primarily responsible for the cost of municipal services such as power, water and fire protection. Iger told employees that he is still getting up to speed on the upcoming dissolution Reedy Creek district.
“I was sorry to see us dragged into that battle, and I have no idea what its ramifications are in terms of the business itself. What I can say is that the state of Florida has been very important to us for a long time and that we have been very important to the state of Florida. That is something that I’m extremely mindful of and will articulate if I have the chance, but I don’t have the details at all yet about what the ramifications are of the decision that was made by the state of Florida and whether we intend to do anything about it”.Disney CEO, Bob Iger
Even though it’s no secret as Iger is a Democratic supporter but, during the meeting as the topic did come up through a virtual question and asking if “Disney will stay out of making political statements” and he did note that many of the things, that people think are political, are not. Here’s what he detailed:
“I think there is a misperception here on what politics is. I think that some of the subjects that have proven to be controversial as it relates to Disney have been branded ‘political’, and I don’t necessarily think they are. I don’t think that when you are telling stories and attempting to be a good citizen of the world that that’s political. Just not how I view it. Do I like the company being embroiled in controversy? Of course not – it can be distracting and it can have a negative impact on the company. To the extent that I can work to quiet things down, I’m going to do that, but I think it’s important to put in perspective what some of these subjects are and not just simply brand them political.”Disney CEO, Bob Iger
Lake Nona, Florida Campus Relocation:
When it was first announced back in July 2021 from Disney Parks Chairman, Josh D’Amaro about the relocation of Walt Disney Imagineering towards the Lake Nona, Florida campus as it did sound promising at first. However it did turn south fast and many fellow Imagineers, were opposed towards the relocation and leaving their lifestyle behind them. Back then as The Walt Disney Company first announced it was picking up and moving 2,000 employees across the country from California to Lake Nona in July of that year.
The price tag for the acreage came in at more than $45 million. The Orange County Property Appraiser’s Office said the exact number of acres the campus will span has not yet been processed by its mapping department “to determine the exact property involved in the transfer.” Now flash forward today, and Iger said, he’ll look into the ramifications of the move and who would be impacted. He did noted and “has not” made a final decision about the planned move as he gets up to speed as the newly reappointed CEO. He finished his comments by saying “I don’t in any way mean to indicate reversing the decision that was made, but it is something that I will look into”. In terms for the proposal of the relocation from California to Florida. It hasn’t change it’s time frame for being delayed till 2026.
Under former Disney CEO Bob Chapek, many of Disney’s Imagineers were essentially forced out of the company due to a mandate to move to Florida, which was later eased due to the delay. For a whole timeline of the Lake Nona campus and can check out here for more details.
More Acquisitions And Apple Buyout?
Prior towards Iger coming back as their was even potential talk if Disney was going after companies for acquisitions, when Bob Chapek was still CEO at the time. In October’s WSJ Tech Live 2022 conference as Chapek did note about that in which he spoke about, “We have the best creative teams, the best brands and franchises in the world, we’re quite happy to have the output level across our channels without having to be a buyer in the open marketplace.” Even Chapek did commented about how Disney+’s place in the streaming market and he believed the streamer will be one of the must-have services and that “not everybody who’s out in the marketplace today” will survive. “This is a critical-mass business. Scale is really, really important to be able to thrive,” he said.
Even though Chapek’s contract “was” extended towards July 2025 and now with Iger back he shared his thoughts about acquisition buyouts from Monday’s Town Hall Meeting. “We have a great set of assets here,” while noting that every acquisition also included people who have been critical to Disney’s success. “Nothing is forever, but I am very, very comfortable with each of the assets that we have” from The Hollywood Reporter.
And he suggested that he wants Disney employees to be working together. “I happen to believe that in creative businesses, there is tremendous value in working from the same place,” Iger told Disney employees. “It creates an energy, it is very enabling to creativity… I am not making any proclamations but I think that is extremely important.”
Now it’s no secret and the Apple “rumors” buyouts have been a thing for many years and isn’t anything new. Referring back towards Iger’s autography “Ride of a Lifetime” and he did share several passages with his close relationship with Steve Jobs and his wife before Jobs’ passing in 2011. As Iger did rest ensure that Pixar’s culture was in safe hands with Disney, when the acquisition was done back then. Iger spoke about Jobs’ love of combining technology and creativity before talking about the hypothetical takeover. He did stated before hand, “I’m pretty convinced we would have had that discussion. I think we would have gotten there”.
However as new recent talk was sharing that former Disney execs “claim” for describing Iger as the “ultimate dealmaker” and said he was going to “sell the company” with the sale being his “pinnacle deal.” Apple is one of the few companies worldwide with the capital needed to acquire a company the size of Disney. Despite Disney’s share price plummeting since January, the company is still worth close to $175 billion (via Google).
Now Iger has debunked all those Apple buyout “rumors” during the meeting and publicly stated it was nothing but, “pure speculation”. He does not expect the company to make any significant acquisitions during his second turn as CEO as stated up above.
Closing Remarks and Looking Ahead:
When Iger first became CEO in 2005 and he laid out previously three priorities at the time. Spend capital on high-quality branded content, embrace technology to tell better stories, reach people in compelling ways, and make the company more efficient and lastly international growth.
Looking ahead as Iger is focusing for two things for the future of the company in which are “creativity” and “profitability”.
- “Creativity is what drives this company. Every transaction this company makes emanates from some form of creativity, and therefore it is my number one priority. It’s [also] not about how much we create, it’s about how great the things are that we do create.”
- “We’ve got to come to grips with two things: one is the state of the world economically and second is what is now expected of us among the investors or in the investment community. When I left we were being measured on […] our growth but that has shifted to being measured by the bottom line. In order to achieve that, we have to take a very, very hard look at our cost structure across our businesses. So that is a priority of mine.”
And here’s a takeaway from his closing statement about his optimism and about the company:
“I’m not a huge believer in in being stuck in the past, but I do think the past in many ways can be a beacon to tell you or show you what the future could look like. I would not have come back if I didn’t believe that the future of this company is bright. We have things that we have to address. It’s a challenging world. But we have the people, we have the wherewithal, and we have the resolve to do it.”Disney CEO, Bob Iger
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Source: The Walt Disney Company