In a stunning late-night announcement last month, Bob Iger was re-appointed as CEO of the Walt Disney Company, ousting his successor Bob Chapek. The news – less than a week after Chapek announced internally that layoffs and cost-cutting measures were headed to several departments — rocked both the entertainment industry and the Disney Parks fan community. Many praised the decision by the company’s board of directors, citing Chapek as a reason the parks have implemented microtransactions and ticket price increases.
But Iger is not back in place to simply restore Disney’s traditional operations in the parks. While tourist accommodations are important to him, Iger must first devise a plan to cut losses in the company’s media and entertainment division, and re-strategize the streaming properties.
Iger initially succeeded Michael Eisner as CEO in 2005. Under his tenure, Disney acquired numerous entertainment heavy-hitters such as Pixar, Marvel, Lucasfilm, and 20th Century Fox. Iger also ushered in Disney’s streaming era with the inception of Disney+ in 2019, and before that the sports-based ESPN+, which launched in conjunction with one of Disney’s primary properties, ESPN.
Iger announced his retirement in 2020, and the board appointed Chapek soon after. Iger was appointed as executive chairman of the board until the end of 2021 to ensure a smooth transition during the pandemic.
Chapek’s former positions at Disney included being president of distribution for Walt Disney Studios, president of Disney Consumer Products, and chairman of Walt Disney Parks and Resorts. In all of these positions, Chapek operated with an adaptable focus to keep up with changing times.
He ushered Disney into the digital age by releasing properties on DVD and Blu-Ray discs. Under his leadership as Park and Resorts Chairman, Star Wars: Galaxy’s Edge was announced in 2015 and finished construction in both Orlando and Anaheim parks in 2019. This has been called Disney’s most immersive land, and is commonly seen as Disney’s response to The Wizarding World of Harry Potter land at Universal Orlando Resort.
With all of these wins for Disney, Chapek seemed like the face of the future for the company. But as the COVID-19 pandemic took hold of the world, much less the tourism and entertainment industries, Disney lagged behind on several fronts.
Parks, entertainment, and products — Disney’s second highest revenue generator after media and entertainment – reopened, under Chapek, in May 2020 to limited capacity. New protocols frustrated customers, new hours of operation turned away others. Indeed, it was a slow return to normalcy.
After Disneyland reopened in April 2021, new initiatives were introduced to earn back revenue that was lost during the pandemic. Later that year, Genie+ and Lightning Lanes were introduced, with the former costing $15 at Walt Disney World per person, and the latter replacing the formerly free Fastpass service to skip lines.
Although these microtransactions were criticized by Disney fans, these changes did seem to pay off for the company. On their first quarter earnings call, Chapek said that “more than a third of domestic park guests purchased either Genie+, Lightning Lane. That number rose to more than 50% during the holiday period.”
During the first quarter of the 2022 fiscal year, the Disney Parks and Experiences division generated $7.2 billion, double the revenue of $3.6 billion made during the first quarter in 2021.
With this continued growth and success in their parks division, the corporate scene at Disney told a different tale about Chapek’s leadership.
In March, Chapek faced criticism for not initially taking a stance on Florida’s “Don’t Say Gay” legislation by Disney’s LGBTQ+ employees who urged the company to stop donating to lawmakers supporting the bill. However, Chapek apologized to employees, publicly opposed the bill, and paused political donations the day after the Florida state senate passed the bill, leading to employees viewing him as a “bad ally” for not immediately denouncing the bill.
It was also reported that there was a “covert campaign” to oust Chapek beginning this summer, with “Disney executives approaching the board to express concerns about Chapek’s leadership.”
The decision to oust Chapek came as a shock to the public, especially because it was reported earlier this year that the board extended his contract for an additional three years. The contract stated that Chapek is entitled to a payout of $54 million in cash and stock following an unplanned leave or termination.
Board Chairman Susan Arnold said in a press release that “the Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period.”
Iger is serving a limited two-year term and will aid the board in appointing another successor.
Though Iger’s second tenure will be short-lived, many Disney fans are supporting the change. Jason White, a college student from Statesboro, Georgia, is a theme park enthusiast and is a frequent visitor of Walt Disney World. He has felt the recent changes to the park provided unnecessary stress to his Disney visits.
“With Bob Chapek in charge, I feel like the experience at Disney got worse,” White said. “I went to Disney with my family every summer as a child and the experience was always great. Now, going to Disney with my family post-COVID is very stressful. We now need to focus on making reservations for the parks or waking up at 7 a.m. to get lightning lanes before they sell out. I’m hoping Bob Iger coming back means he can get rid of these changes.”
Along with fan praise, Disney’s stock also rose 6.7% following Iger’s reinstatement, indicating that investors are also pleased with this change in leadership.
With Iger’s return receiving a positive reception, fans, investors, and employees alike are anticipating what changes he will implement to restore Disney’s reputation of being the “happiest place on Earth.”
A town hall meeting took place for Disney’s employees last week where Iger announced that his No. 1 priority will be creativity, saying that “it is what drives the company,” and that it doesn’t matter the amount of things Disney creates, but how “great the things are that we do create.”
But park patrons should be patient. Most of what Iger is referring to, in “creativity,” is focused on media and entertainment, and creating more appealing content for the streaming services at prices that will turn a profit for the company. It’s more than likely that improvements to customers’ park experiences will be secondary on his to-do list.
But Iger leads with a brand-focused approach. Disney was built off of Walt Disney’s creativity and innovation, something Iger wants to get back to. And before long, that will be probably be seen across the company.