Disney’s new CEO is its old CEO: Bob IgerChapek, who had run the company for years and handed it over to Lieutenant Bob Chapek in 2020, is back and Chapek out.
This news is very exciting for people who work in Hollywood and Silicon Valley, and I usually tell you that if you’re not in tech and media, it means nothing to you. But this is different. It’s an executive move that tells you a lot about the state of the media industry, which is trying to figure out how to adapt to the seismic changes that technology has made in the ways we consume media.
There are plenty of theories as to why Chapek was fired, all of which could carry degrees of truth. The two men had a The relationship was strained throughout the short networking period; Chapek had upset Hollywood by publicly fighting with Marvel star Scarlett Johansson over money; Perhaps most importantly, he demoralized the Disney staff with the clumsy manner in which he treated him Florida Governor Ron DeSantis attacks the company. (There were also a lot of It scratched its head as Egger left A few years ago.)
But the most important thing to understand about Iger’s return is less about the specifics of Disney than about the media industry in general: When Iger left Disney, everyone in the media was trying to become Netflix — fast-growing, full-on streaming, and willing to burn big stacks. Of the money to make it work – because that’s what Wall Street wanted them to be.
Now Wall Street has changed its mind. Which is why Disney shares are down — along with those of most major media companies, including Netflix. Disney’s stake was nearly $200 in the spring of 2021; Now he’s going for half of that, and that’s after investors gave him a quick bump this morning after the announcement of Iger’s return.
“It’s a completely different landscape than it was 18 months ago,” an executive at a Disney competitor texted me. “I hope he can figure out the form. No one yet.”
The New Theoretical Paradigm: Figure out how to build a streaming service that people pay for, but without burning a million dollar gas—over the past nine months, Disney lost over $2.5 billion in broadcastingand lost another billion dollars a year ago – while continuing to support established companies, such as cable television, that make a lot of money but in a state of permanent decline.
On the other hand, Egger will find himself in the same boat as the rest of the industry. Comcast and Warner Bros. are battling it out. Discovery and Paramount with the same problem and the same investor skepticism.
On the one hand, there is some poetic justice here, since he’s the guy who launched the boat in the first place. back in 2017, Iger announced that instead of selling his content to Netflix, which Disney has done for years, he would Building a competitor to Netflix. Then doubled by Buy a lot from Rupert Murdoch’s company for the 21st centuryaccording to the theory that it would need a lot of movies, TV shows, and their associated intellectual property to take over Netflix.
Investors cheered it all up, even when Iger told them the losses would cost them billions. And all of Disney’s competitors tried to copy the same book. Iger launched Disney+ in the fall of 2019, to standing ovation. After a few months he left, announcing that his work was done.
Now it turns out that Iger has a lot of work to do, though we’re still guessing what kind of work that will be. Perhaps he simply needs to shore up forces, while soft-spoken Wall Street adores him — “We think investors will appreciate the transparency and give Disney back some of its long-lost magic with a stronger narrative that propels the stock higher again,” analyst Michael Nathanson wrote in a blog post. note this morning. Perhaps he’ll figure out how to adapt Disney content, which may come in some welcome after years of dominating global culture with Marvel, Star Wars and Pixar merchandise.
Or maybe there is a big, shiny structural move in the works, which could change the company or make people think it has changed. Maybe there’s something else you’re buying – Netflix, for example. (Note: “Disney or Apple or someone should buy Netflix” is one of the media industry’s favorite narratives, no matter how big or small Netflix is right now. But also note Message from Netflix founder Reed Hastings to Iger on Twitter last night.)
A note of caution on that: While Iger should rightly be commended for three acquisitions he’s made that have transformed the company — Pixar, Lucasfilm, and Marvel, all cut within a few years of each other — this isn’t a guarantee of future performance.
It’s perfectly reasonable, for example, to argue that Iger massively overpaid for the Fox assets he acquired, which didn’t yield much benefit after removing a competitor. And Iger came very, very close to buying both Vice and Vice Twitter – Two moves that could have guaranteed a huge headache and possibly real losses.
And while the media industry loves Iger — in my copy of Twitter last night, people signed themselves to describe how excited they were about his sudden return — that in and of itself is a risk. Had Iger stayed away from Disney, whatever happened to the company could be attributed to the failures of his successor (notwithstanding that Iger chose that successor). Now, if he can’t figure out how to fix a problem he helped create, his own reputation may be on the line.