Disney’s decision to replace Chapek with Iger makes everyone look bad

Bob Iger

Stephen Desaulniers | CNBC

That Disney The board’s decision to replace Bob Chapek with Bob Iger as CEO could be the right decision for the company’s future. But the process of arriving at that decision makes everyone involved look less than stellar.

No sudden CEO change is easy, but the ins and outs that led to Iger replacing his handpicked successor are riddled with missteps, deceit and awkwardness.

The Disney board extended Chapek’s contract for a further three years on June 28.

“Disney has been hit hard by the pandemic, but with Bob at the helm, our businesses — from parks to streaming — not only weathered the storm, but emerged in a position of strength,” Disney Chairwoman Susan Arnold wrote in a statement under the hour. “During this important time of growth and transformation, the Board is committed to keeping Disney on the successful path it is on today, and Bob’s leadership is key to achieving that goal. Bob is the right leader at the right time for The Walt Disney Company and the board has complete confidence in him and his leadership team.”

Disney Chief Executive Officer Bob Chapek speaks at the 2022 Disney Legends Awards during Disney’s D23 Expo in Anaheim, California on September 9, 2022.

Mario Anzuoni | Reuters

Iger-Chapek Awkwardness

Chapek can also validly argue that he was dealt a losing hand. He took over as CEO in February 2020, just as the coronavirus pandemic was starting and theme park attendance was grinding to a halt. He successfully ensured a full recovery in visitor numbers at the park, so much so that he began finding ways to limit crowds and increase consumer satisfaction.

Disney+ has consistently added subscribers over the past year, often exceeding 10 million in one quarter Netflix‘s Addition stagnated. But investors tuned in to the “growth at any cost” streaming narrative in January, making Disney+’s subsequent growth less compelling.

Chapek’s biggest mistake was arguably freezing Iger instead of making him a trusted advisor. During Chapek’s tenure, he couldn’t help but be compared to the man he replaced. Three times before that, Iger had postponed retirement to remain as Disney’s CEO. With that in mind, it’s no surprise that he’s come back despite his other words.

Pushing Iger away instead of accepting his help was always risky. It appears this contributed to Chapek’s untimely end as CEO.

WATCH: CNBC’s Jim Cramer and David Faber exchange views on Bob Iger’s return to Disney

CNBC's Jim Cramer and David Faber share thoughts on Bob Iger's return to Disney

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