Surprising move – Bob Iger, who has been boss for years, is coming back to Disney

Iger, 71, is taking the helm again at a difficult time for Disney and the entertainment industry as a whole. The group must take into account consumers’ reduced willingness to buy in times of high inflation. At the same time, cable television revenues with channels such as ABC are declining in the US. A particular problem is the streaming business. It’s growing fast with services like Disney+, but it’s in the red.

It posted an operating loss of $1.47 billion in the last quarter alone. The reason for this is the high costs of elaborately produced films and series that have not yet been collected from subscription revenue. Chapek had promised that the area should be profitable by September 2024. The theme parks, which are booming after the pandemic break, are making up for losses.

With its most recent quarterly profit of $162 million, Disney missed the stock market’s expectations, and the stock continued to fall. Chapek announced austerity measures, such as a staff freeze and job losses. Disney has also been targeted this year by aggressive investors who buy into companies and then demand change. Billionaire Dan Loeb sometimes called for the sale of the sports channel ESPN.

Employees surprised by return
Iger is the architect of the current Disney Group. In its time, the entertainment giant bought animation studio Pixar, the companies behind the Star Wars series and the lucrative Marvel movies, and Hollywood studio 21st Century Fox. And he brought Disney into the streaming business during the latter part of his tenure. In fiscal 2005, Disney had revenues of nearly $32 billion, up from $69.6 billion in 2019, before the coronavirus pandemic.

The internal email in which Iger announced his return to the top of the group came as a surprise to employees as some initially thought it was a fake message from a hacked account, the Wall Street Journal reports.

Chapek’s contract was not extended until the summer until the end of 2024. And Iger had said several times that he was not interested in a job at Disney. The Wall Street Journal wrote that talks about his return only started a few days ago.

Chapek, who was previously in charge of the theme parks, took over in 2020 as Iger’s own preferred successor. Disney preferred him to streaming boss Kevin Mayer, who was hoping for the lead post. Mayer left the group and was temporarily head of the video platform TikTok.

New boss felt patronized
However, according to media reports, Chapek and Iger were recently in conflict. The business channel CNBC reported that tensions had started early with an interview with Iger, in which he pledged support for Chapek in overcoming the corona pandemic. However, the new boss felt patronized by his powerful predecessor, the company said, citing informed people.

Iger was also Chapek’s chief supervisor as chairman of the board of directors and only left this position eleven months ago. Also factoring in the break was a corporate restructuring by Chapek in which budget responsibility was centralized, CNBC reported in March. This allowed Disney to make decisions more quickly, but the heads of individual divisions lost a lot of discretion in spending and were dissatisfied, the company said.

Under Chapek’s leadership, Disney’s handling of a dispute with actress Scarlett Johansson was considered clumsy. She sued the company for lost revenue after her film “Black Widow” was also put online during the corona pandemic. Disney countered that Johansson had already received $20 million. The dispute was settled out of court, but left the company in a bad light.

Chapek has also been indecisive in dealing with a Florida state law that banned public schools from teaching subjects like sexual orientation and gender identity through third grade. The Disney group, which has a large theme park in the state, initially did not want to respond to the law.

Chapek then only reacted after protests from employees, who allegedly showed him “how painful our silence was”. He announced a halt to political donations in Florida, as well as support for groups fighting similar laws in other states. The state legislature subsequently withdrew Disney from a special status that gave the company sweeping control over its theme park’s grounds, such as fees, roads, or utility infrastructure. Iger, for his part, criticized the law early on because it could harm children.