Bob Iger makes swift moves following his return to Disney Transcript

Well, he’s certainly moving quickly. Bob Iger already firing a top executive and announcing that the restructuring is already in the works. He says their restructuring aims to, “Honor and respect creativity as the heart and soul of who we are.” In a reversal of Bob Chapek’s separation of content creation and distribution into two separate divisions, he’s fired Kareem Daniel. He ran media and entertainment distribution, or DMED. In a memo, Iger is saying that he’s asked General Entertainment Chairman Dana Walden, Studio Chief Alan Bergman, ESPN Chairman Jimmy Pitaro, and CFO Christine McCarthy to design a new structure that puts decision making back in the hands of creative teams and rationalizes costs, saying they aim to have this new structure in place in the coming months. Saying, “I fundamentally believe that storytelling is what fuels this company and it belongs at the center of how we organize our businesses.”

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Now, the spotlight turns to those executives that Iger mentioned and the board’s imperative that he develop a successor. One thing that he failed to do in his repeatedly delayed retirement when he was running Disney previously. Deutsche Bank underscoring the importance of a focus on content, writing that the decision to reinstate Iger was all about lack of confidence in Chapek’s creative leadership, saying of Iger’s finding a successor, “There just aren’t any other Bob Igers out there. Perhaps this time, they’ll start with the creative leader they’re seeking and try to develop the rest of that individual’s skills over the next two years.” One name that could fit the bill, General Entertainment chair Dana Walden, but one thing’s for sure, as this all happens, Iger is showing he’s moving very quickly to drive change and boost morale. Back over to you.

A pretty good look at what he’s got to do here, Julia. Everybody’s surmising about potential asset sales. Obviously the binary question about Hulu, ongoing cost cutting, revising the longterm DTC targets. Do you expect news on those fronts in the near term or is there so much to be done mending relationships both in and out of the company that’s going to be more of a longer term story?

Well look, there are all these different pieces of this. I mean one thing we know is that the ad supported Disney Plus is launching in just a couple weeks. That’s coming up on December 8th. Another thing to keep in mind is that Iger might take a different approach to pricing at the parks than Chapek did. Chapek recently raised pricing at the parks again, and the pricing at the parks has continued to rise. It’ll be really interesting to see if maybe Iger rolls out some discounts at the parks, or at least halts that constant increase in prices we’ve seen in recent years. So I think as we see consumer spending come under pressure, that’s going to be something to watch.

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Another thing just to keep an eye on here is the strategy around what content goes to theaters and what content goes direct to Disney Plus. Disney does have one other massive theatrical release coming up this year and that is the Avatar sequel. That’s important as a franchise for the company and was another one of the crown jewels that was acquired as part of that Fox acquisition. So I think Iger is going to continue to move quickly, but the fact that he announced that this restructuring process has already kicked off indicates that he really wants to engage with his deputies to make sure that they’re creating a structure that can continue to exist for years to come, not just for the next two years. He’s trying to set this company up for success for the long run.

And probably pretty safe to guess that the next CEO isn’t going to come from the parks business. I’m just out on a limb there. But a quote that concerns me is that analyst quote, “There just aren’t any other Bob Igers out there.” Isn’t that the problem succession-wise here is that at least that’s the perception?

But John, remember when Bob Iger started, and by the way, there’s a great book written on this by James Stewart, who is a contributor to CNBC, called DisneyWars, when Bob Iger started, he was not Bob Iger either. And so there’s a history of people having to grow into their roles and I think that’s the question is who can grow into this position? No-one is Bob Iger now.

But two years is not a long time to grow into anything. If you don’t already have the pieces in your resume to take over from Bob Iger, minus maybe one more piece, in two years, are you really going to be able to get it? So isn’t part of his role to elevate other people to the point where among his leadership team investors, employees, others have confidence in them, and we stop hearing this, “There just aren’t any other Bob Igers?

And that’s the thing, I would say just remember Bob Iger was not Bob Iger when he started his 15 year reign as CEO the first time around. Dana Walden, the reason why people are pointing to her is she has the creative chops, she’s has good relationships with talent, very well respected. She also could be put into a position now, maybe as part of this restructuring, where she would have more of a business role as well. And then I do have to note, you said they won’t have another parks executive in the CEO role, Josh D’Amaro, who is currently running parks, he’s very well liked, seen as more dynamic than Bob Chapek was.

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I do think there is that question of whether or not the board would be reluctant of putting a parks guy in charge of the content businesses as well but he is definitely one of the names that, from a strategic point, he’s the right age and he’s very well liked. But I do think you’re right that the board would probably look for more of a content person. And then, of course, John, what if there’s a big deal? Would Iger look to do some sort of M&A that could bring in someone that might be well positioned to take over? At this point, I think with a regulatory landscape, I’m not looking at a big Apple Disney merger, but I do think it’s interesting to speculate about what kind of M&A could potentially be an acqui-hire type situation.