The FINANCIAL -- Shares of Walt Disney fell after company’s surprise move to replace CEO Bob Iger by Bob Chapek. Iger had telegraphed his retirement plans for years but there had been zero indication he’d step down before his contract ran out at the end of 2021.
Walt Disney (NYSE:DIS) Stock fell by 3.81% to trade at $123.35 by 14:02 (19:02 GMT) on Wednesday on the NYSE exchange, according to Yahoo Finance.
The Walt Disney Company said that Mr. Iger, who has run Disney for nearly 15 years, would be replaced as chief executive by Bob Chapek, a 27-year veteran of the entertainment conglomerate who has most recently served as chairman of Disney’s theme parks and consumer products businesses. Mr. Chapek will report to the Disney board, which will continue to be led by Mr. Iger, who will also take on the title of executive chairman and “direct Disney’s creative endeavors,” the company said. Mr. Chapek first made a name for himself at Disney by spearheading the company’s highly successful “vault” strategy for its iconic animated films, bringing them on and off the market in cycles that allowed Disney to sell the films repeatedly on DVD and Blu-ray discs, as reported by The New York Post.
Iger had telegraphed his retirement plans for years, and Chapek was long considered a potential replacement. But there had been zero indication he’d step down before his contract ran out at the end of 2021 or that he would hand over the keys to the Magic Kingdom without a hint of warning. Not surprisingly, the sudden announcement prompted plenty of questions. While the timing of Iger’s announcement shocked most in Hollywood, Chapek’s selection isn’t a complete surprise. He’s been mentioned as a possible heir to Iger for years, in part because he’s overseen so many key parts of the company, Volture wrote.
“The company has gotten larger and more complex just in the recent 12 months,” Iger said on a conference call on Tuesday, citing its purchase of 21st Century Fox and launch of direct-to-consumer services such as Disney+ last year. Chapek, who will be the seventh CEO in the company’s nearly 100-year history, has most recently served as the chairman of Disney Parks, Experiences and Products. Iger, who has been CEO since 2005, built up the Disney brand through a series of acquisitions, including animation studio Pixar in 2006, Marvel in 2009, and “Star Wars” franchise owner Lucasfilm in 2012. His biggest bet was the purchase of 21st Century Fox, a deal that was instrumental in launching Disney+, Reuters wrote.
Before his exit, Iger launched new streaming service Disney+, viewed as an early success with its 30 million subscribers. But maintaining that momentum will be hard with streaming rivals popping up everywhere, from the newly-launched Apple TV+ and upcoming HBO Max, to existing powerhouses Netflix and Amazon Prime Video, according to Yahoo.
“I am incredibly honored and humbled to assume the role of CEO of what I truly believe is the greatest company in the world, and to lead our exceptionally talented and dedicated cast members and employees,” Mr. Chapek said in company’s statement. “Bob Iger has built Disney into the most admired and successful media and entertainment company, and I have been lucky to enjoy a front-row seat as a member of his leadership team,’’ he added.
'The timing was a surprise. We knew Bob was going to leave, we didn't know it would happen this quickly,' entertainment analyst Michael Nathanson of MoffattNatthanson said in an interview on CNBC. Chapek will face some immediate challenges including building on the early success of Disney+ and charting a strategy for Hulu to be profitable, Cowen analysts said. Most analysts, however, agreed that the move ended years of speculation on who would take over Hollywood's most powerful studio, built up by Iger through acquisitions of Pixar, Marvel, Lucasfilm and 21st Century Fox, Daily Mail wrote.