One of the basic economic arguments for why CEO salaries must be monarchically high is that the talent pool for would-be saviors is a millimeter deep. After all, on paper, only those who have already made it to run a global entertainment company qualify on paper. This is the part of the American corporate feedback loop where meritocracy begets dynasty, where Iger begets Iger.
Bob Iger, who ran the Walt Disney Co. for 15 years until his departure in 2020, was reinstated as CEO after a palace coup at Cinderella Castle over the weekend and is already sweeping away the insignia of his successor, Bob Chapek. After just a day on the job, Iger fired one of Chapek’s top lieutenants, Kareem Daniel, and announced plans to reverse a Chapek reorganization that had alienated creative minds. “My intention is to restructure things in a way that values and respects creativity as the heart and soul of who we are,” Iger wrote to staff.
The sigh of relief was practically audible, and Disney stock rose 6.3% after the leadership change. The Iger restoration has an Elba Escape character that will have even stunned competitors acknowledging the reappearance of the great conqueror. “Ugh,” Netflix CEO Reed Hastings tweeted. “I was hoping Iger would run for president. He is great.”
Though Iger’s return shocked Hollywood watchers when the news first broke — just two months ago Iger said he didn’t miss running Disney — with hindsight, the decision already seems inevitable.
Iger had built Disney into a giant during his reign, gobbling up Pixar, Marvel Entertainment, Lucasfilm and 21st Century Fox to expand the company’s treasury with ESPN, ABC and its theme park business. Disney watchers had marveled at many of these deals. But Iger’s greatest responsibility as a leader was to find a successor who could handle the world he created, and he failed. Thus it is written that the great builder Iger created even the sad conditions that required his return.
Insiders said that troubles have been brewing around Chapek, 62, since he took over in February 2020 and has been buffeted by forces far greater than himself.
There was the global COVID-19 pandemic and accompanying lockdowns that turned American business upside down, turning Disney’s overcrowded theme parks into potentially pathogen killing zones. Then Disney was wedged between the political movements of social progress and right-wing reaction in Florida, where Chapek was fired on by both progressives and Republican Gov. Ron DeSantis for the company’s position on the so-called “Don’t Say Gay” law state schools.
The move to streaming was particularly problematic as the entire industry faced a crisis as cable cutting accelerated in traditional moneymakers like television and cable. Investors were stunned earlier this year when Netflix lost subscribers for the first time in more than a decade; maybe the deal wasn’t as profitable as originally thought. In the most recent fiscal quarter, Paramount, Peacock, and Warner Bros. Discovery each lost hundreds of millions of dollars in spending to grow their streaming audiences; Disney’s own direct-to-consumer division, which includes Disney+, Hulu and ESPN+, lost $1.5 billion.
In one of the more high-profile episodes, Disney’s streaming pivot sparked a very public row with Scarlett Johansson after Disney co-released Black Widow in theaters and on Disney+, potentially cutting Johansson’s salary, which was tied to box office performance . Chapek said the company is trying to navigate a COVID-era entertainment environment with artist deals negotiated years earlier – during Iger’s reign.
All of this and with a broader economic slowdown looming as the Federal Reserve seeks to slam the door on inflation. That’s a lot for any executive to contend with, not just Chapek — and then there’s the fact that there’s nothing more dangerous to a new CEO’s longevity than having a respected predecessor loitering in the parking lot.
Iger himself had delayed stepping down as CEO for years and remained on Disney’s board of directors even after handing the reins to Chapek. Iger’s presence there as CEO until last December is said to have irritated Chapek, perhaps not irrationally. A company study found that a CEO is 40% more likely to be fired if a predecessor sits on the board; more than 10% of the companies analyzed for the study rehired the old CEO. Even old bosses can look skinny and hungry. (So-called boomerang CEOs, however, have mixed records.)
But with the looming recession and political uncertainty continuing to weigh on the country’s state of mind, it’s definitely been a comeback season lately, and not just at Disney.
Donald Trump, 76, has announced his plans to run for president again after voters narrowly ejected him from the White House in 2020, in one of the least surprising political developments of the past two years. The man Trump is trying to replace, Joe Biden, 80, is himself a throwback figure from the Obama years, whose age Democratic voters were happy to overlook because he represented stability.
In business, one of America’s largest consumer chains, Starbucks, whose feel-good corporate image has been betrayed by its union organizing movement, called Howard Schultz for re-appointment this spring third time as CEO. Even with Elon Musk’s tumultuous Twitter, the only real changes users have encountered so far are the restoration of well-known accounts for figures like Trump and Kanye West, who were suspended after previous ownership tired of their riotous antics.
Marx once wrote that great figures and events appear twice in history: the first time as tragedy, the second time as farce. His predecessor Hegel saw it a little differently: the first time was coincidence, the second time fate. Hopefully, somewhere in this parade of repeated CEOs and exhaustively exploited and re-exploited intellectual property, someone is making something new. But given that the 10 highest-grossing movies of 2022 so far are all sequels or derivatives of existing characters, we seem stuck with what we already have. I hope you like it. It feels like destiny.
https://www.latimes.com/entertainment-arts/story/2022-11-22/commentary-bob-iger-comeback Commentary: Bob Iger, Disney and the inevitability of the comeback