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Disney announced on Monday night that Iger had agreed to take over the leadership again for two years. He was Disney boss for 15 years. It was said that his successor, Bob Chapek, had resigned.
Chapek, who, in contrast to the charismatic Iger, is considered a pale administrator, had a difficult time on Wall Street from the start. Disney’s shares have fallen by more than 40 percent since the beginning of the year. Investors reacted euphorically to Iger’s return: Disney shares were temporarily up 5.83 percent in NYSE trading at $97.15. .
Analyst Brett Feldman from the investment bank Goldman Sachs evaluates the personnel from an investor’s point of view as positive. However, Chapek’s resignation comes at a difficult time for Disney. Investors should now expect Iger, among other things, to reassess the long-term goals for the streaming division – with a view to the balance between subscriber growth and profitability. They should also expect a plan to move the sports channel ESPN from traditional TV via cable and satellite to a streaming service.
Iger, 71, is once again taking the helm at a difficult moment for Disney and the entertainment industry as a whole. The group has to take account of consumers’ reduced willingness to spend in times of high inflation. At the same time, revenues from cable TV with channels such as ABC in the USA are falling.
A particular problem is the streaming business. It’s growing fast with services like Disney+, but it’s in the red. In the past quarter alone, it brought in an operating loss of $1.47 billion. The reason for this is the high cost of elaborately produced films and series that have not yet been brought in from subscription revenues. Chapek had promised that the area should be profitable by September 2024. The amusement parks, which are booming after the pandemic break, are making up for the losses.
With the most recent quarterly profit of 162 million dollars, Disney missed the expectations of the stock market, the stock continued to fall. Chapek announced austerity measures such as a hiring freeze and a downsizing on. Disney has also been targeted this year by aggressive investors who buy into companies and then demand change. At times, billionaire Dan Loeb called for the sports broadcaster ESPN to be sold.
Iger is the architect of today’s Disney Group. During his era, the entertainment giant bought animation studio Pixar, the companies behind the Star Wars series and the lucrative Marvel films, and Hollywood studio 21st Century Fox. And he brought Disney into the streaming business on the home stretch of his tenure. In fiscal year 2005, Disney had sales of almost $32 billion – in 2019, before the corona pandemic, it was already $69.6 billion.
The internal e-mail in which Iger announced his return to the top of the group was so surprising for the employees that some first thought it was a fake message from a hacked account, the Wall Street Journal reported.
Chapek’s contract was only extended until the end of 2024 in the summer. And Iger had said several times that he wasn’t interested in a job at Disney. The Wall Street Journal wrote that talks about his return only began a few days ago.
Chapek, who was previously in charge of the theme parks, took over in 2020 as Iger’s own preferred successor. Disney preferred him to streaming boss Kevin Mayer, who had hopes for the chief post. Mayer left the group and was temporarily head of the video platform Tiktok.
Most recently, according to media reports, Chapek and Iger were in dispute. The business broadcaster CNBC reported that the tensions had started early on with an interview with Iger, in which he had promised Chapek support in dealing with the pandemic. However, the new boss felt patronized by his powerful predecessor, it said, citing informed people.
Iger was also Chapek’s chief supervisor as chairman of the board of directors and only left this post eleven months ago. A factor in the rift was also a corporate restructuring carried out by Chapek, in which budget responsibility was centralized, CNBC reported back in March. As a result, Disney was able to make decisions more quickly, but the heads of individual divisions lost a lot of freedom in spending and were dissatisfied, it said.
Under Chapek’s leadership, Disney’s handling of a dispute with actress Scarlett Johansson was considered clumsy. She sued the company for lost revenue after her film “Black Widow” was also released online during the corona pandemic. Disney countered that Johansson had already received $20 million. The dispute was settled out of court, but left the company in a bad light.
Chapek has also been indecisive in dealing with a Florida state law that banned public schools from teaching subjects such as sexual orientation and gender identity through the third grade. The Disney group, which has a large theme park in the state, initially did not comment on the law.
Chapek then only reacted after protests from employees, who would have shown him “how painful our silence was”. He announced a halt to political donations in Florida – as well as support for groups fighting similar laws in other states. Florida lawmakers then stripped Disney of a special status that gave the company extensive control over its theme park grounds, such as fees, roads, and utility infrastructure. For his part, Iger criticized the law early on because it could harm children.
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