Disney, in crisis, recalls Bob Iger at the controls

The former CEO of Disney (2005-2020) returns to his post. He takes over from Bob Chapek, sacked, for two years with the aim of establishing a strategy for “renewed growth” and preparing his succession.

Correspondent in Washington,

Bob Iger, 71, agrees to take over as head of Disney for two years. The man who has already led the first communication group in the world for 15 years, is urgently called back to the controls, to the surprise of many.

The poor financial performance of Disney, the recent doubling of the losses of its video-on-demand subsidiary, Disney +, supposed to define the future of the distribution of the group’s productions, alarm the shareholders of the giant from Burbank (California), including several activist funds. Disney’s share price has plunged 41% since the start of the year, while Wall Street has fallen roughly 16%.

Disney management’s direct clash with Florida Governor Ron DeSantisa rising star of the Republican Party, probably also contributed to the dismissal of Bob Chapek, in place since February 2020. Just reappointed by a large majority at the head of the state where more than half of the group’s employees work, Ron DeSantis been campaigning for months against the “woke culture”, which he accuses Disney of representing.

The Board concluded that Disney is embarking on an increasingly complex period of (communications) industry transformation. Bob Iger is uniquely placed to lead the company during this decisive periodexplains Susan Arnold, who chairs the board. She charges her old friend with “put Disney on a path of renewed growthand work with the board to identify his successor.

With an incredible sense of gratitude and humility – and I admit it, with a bit of amazement – I write to you this evening with the news of my return to the Walt Disney Company as chief executive officer“, explains Bob Iger in an email to employees of the company.

Iger will have to prove that his strategy is the right one

This return represents a huge challenge for a highly respected boss in Hollywood, both by the production world and in the ranks of creators and actors. He will have to prove that the strategy he devised before his departure can succeed. It was he who launched Disney in 2018 in a radical transition to the internet. A revolution copied a few quarters later by rival groups like WarnerMedia and Comcast.

The approach is based on the observation of the irreversible decline in the audience of traditional television channels, while in addition attendance at cinemas is also declining. Summer box office receipts in the United States in 2022 are thus 21% lower than they were before the pandemic. Faced with the popularity of streaming, still largely dominated by Netflix in 2018, Bob Iger decided that the group had to quickly focus on the internet to distribute its productions. In November 2019, three months before his departure, he launched Disney +, the group’s streaming platform which today has 164 million subscribers.

Despite the positive effects of the reopening of Disney’s theme parks, thanks to the end of the pandemic, the group’s performance is currently weighed down by Disney+ costs. In recent months, the slump in the advertising market and the deterioration of the global economy, complicate the strategic shift of Mickey’s empirebecause they weigh down ABC, the group’s television division.

The promise, just renewed by Bob Chapek, of first profits from Disney + for the 2024 financial year has become dubious. The streaming niche is so crowded that even Netflix, in response to a plateau in its growth, has had to launch a discounted, ad-supported service.

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