On Tuesday, Disney CEO Bob Iger surprised the business world by announcing that he would immediately step down from the top job. After 15 years in charge of the entertainment giant, Iger passed the reins to a company veteran named Bob Chapek who had been overseeing Disney’s theme parks division. Although the news caught many observers off-guard, Iger insists that this plan has been in the works for some time. “It’s only abrupt in other people’s eyes because we haven’t been talking about it publicly,” said Iger. “I have been discussing this with the board for a number of months.”
What’s more, Iger will continue to be involved in day-to-day operations at Disney until the end of next year. He took the position of executive chairman where he will lead the board and “direct Disney’s creative endeavors.” This includes ensuring the continued success of Disney+, the company’s recently launched streaming video service. So far the platform has more than 30 million subscribers and will soon launch in Europe and India. The company hopes that Disney+ will become so popular that it will make up for shortfalls in other areas for the business. Along with declining viewership for its lineup of traditional television channels like ESPN and ABC, Disney has seen consumer product sales drop in recent years as well. The company also faces short-term challenges like the coronavirus outbreak, which has led to the closure of parks and resorts in Shanghai and Hong Kong.
Still, Disney has plenty to be positive about as it makes this monumental management transition. Last year the company became the world’s largest movie studio by far after the $71.3 billion acquisition of 21st Century Fox. Iger also obtained the rights to Marvel and Star Wars during his tenure, two properties that will be essential to Disney’s long-term fortunes. Meanwhile, the new CEO’s experience in theme parks gives many insiders hope that the company’s leadership will be well-rounded enough to take on any future challenges. “I have absolute confidence in [Chapek’s] abilities, as does the board,” said Iger. “I intend to work very closely with Bob. My goal when I leave here is that he will be just as steeped in the creative part of the business as I am today.”
Questions:
- Why is it important for Disney to ensure the continued success of its new streaming service?
- Do you think Disney’s sudden change in CEO will have a long-term impact on the company? Why or why not?
Source: Brook Barnes, “Disney C.E.O. Bob Iger Hands Keys to Magic Kingdom to Its 7th Chief,” The New York Times, February 25, 2020. Photo by Josh Hallett.