The Walt Disney Company will retain CEO Bob Iger for two years beyond the end of his current contract. He was to stay until the close of 2024. Disney’s board has made a mistake.
Iger is the author of several Disney problems, the most troubling of which is how streaming service Disney+ was launched in November 2019. Some blame for Disney’s streaming operation losses was placed on Bob Chapek, Disney’s CEO until November 2022. Chapek was named CEO in February 2022. Iger’s first run as CEO started in 2005.
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Iger has been considered among the best public company CEOs of the 21st Century. He did lead Disney through several successful acquisitions, substantial growth, and a run-up in its stock price. Some think he overpaid when he bought many of the assets of 21st Century Fox for $66 billion in 2017.
Disney+ was priced at $6.99 monthly, about half of what streaming behemoth Netflix charged. Disney+ subscriptions surged and reached 158 million at the end of the most recently reported quarter. They peaked in the fourth quarter of 2022 at 164 million. Disney lost billions of dollars in its race to become among the largest streaming services in the world. To help rectify the financial losses, the Disney+ price was raised to $10.99 a month at the end of 2022. The move came too late. Skeptics about the profitability of the service had already started to drive the price of Disney’s stock down.
Iger also set about restructuring, which meant thousands of layoffs. These were not all people Chapek had added. Once again, Iger was correcting one of his own mistakes. He fired several senior officials, some of whom worked for him during his original tenure. In the midst of this, highly regarded CFO Christine McCarthy left.
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In the last year, Disney’s stock is down 4% while the market is 17% higher. Wall St. has voted “no” on Iger’s plan.
There are rumors the Disney board could not find a suitable replacement for Iger. Given his performance, it is a wonder that was hard to do.
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