Former Disney CEO Bob Iger reappointed to role in surprise decision | Walt Disney Company

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Disney reappointed Bob Iger as CEO in a surprise decision when the entertainment company ousted its hand-picked replacement, Bob Chapek, after less than three years in the job.

During Iger’s acclaimed 15-year reign, Disney made a series of major acquisitions, including the Marvel movie franchise, the Pixar animation studio, and the Star Wars movie franchise.

He retired as CEO in 2020, after postponing his departure several times to help guide the company through the early stages of the coronavirus pandemic. He was replaced by Chapek, who previously led the theme parks division but remained as executive chairman until the end of last year.

Iger will return to the role of CEO effective immediately and will stay on for two years, Disney said in a statement late Sunday. The company highlighted a five-fold increase in market value under his leadership, adding that he had a “mandate from the board of directors to set the strategic direction for renewed growth” while again looking for a long-term successor.

Michael Antonelli, a market strategist at Baird, a US asset manager, said Iger’s return was “probably the most significant piece of corporate upheaval since [Steve] Jobs went back to Apple,” and the news sent Disney shares up more than 8% — nearly $14 billion — when Wall Street opened Monday.

“We applaud the Disney board for having the courage to make this change,” said Michael Nathanson, senior analyst at MoffettNathanson. “We have never hidden our affection for Mr. Iger and the work he did to build Disney into the global powerhouse it has become.”

Chapek has had a rough patch for Disney, with disruption from the pandemic – forcing its theme parks to close – followed by concerns about the profitability of its Disney+ streaming service. The platform competes in a crowded field and has spent billions of dollars creating new content while competing against rivals Netflix and Amazon Prime Video. While Disney+ has rapidly grown its subscriber base, it has come at the cost of significant operating losses.

Disney has also faced pressure in Florida, where Walt Disney World’s theme parks are located, for its public opposition to the state’s “don’t say gay” laws that restrict discussions of sexual orientation and gender identity in certain classes in the classroom. prohibit.

The company publicly opposed the laws, which many activists and teachers viewed as repressive, prompting right-wing Florida governor Ron DeSantis to try to strip it of its privileges in the state.

The company’s market value is down more than 40% in 2022, much worse than the 17% drop in the S&P 500 index of large US companies.

News of Iger’s return prompted the widely respected Moffett Nathanson to raise his price target for Disney to $120 – it was trading at less than $100 – the stock’s first upgrade since early 2020.

Disney Chairman Susan Arnold said: “We thank Bob Chapek for his services to Disney throughout his long career, including navigating the company through the unprecedented challenges of the pandemic. The board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely positioned to lead the company through this critical period.”

Iger said, “I am extremely optimistic about the future of this great company and am thrilled that the board of directors is asking me to return as CEO.” Disney has not published a statement from Chapek.

His return comes weeks after Disney’s stock price took a hit after reporting a rare miss on revenues and earnings, doubling losses on its streaming business to $1.5 billion in the quarter to Oct. 1.

Disney has so far spent about $9 billion on loss-making Disney+ and about $30 billion a year on content from Hollywood blockbusters and major TV shows to NFL football through its television and streaming companies, including ESPN and ABC.

The company said its streaming business had reached “peak loss” and that Disney+ remains on track to become profitable in fiscal year 2024, at which point it will most likely exceed Netflix, though it has cut subscriber expectations to between 215 million and 245 million worldwide.

To achieve this goal, Disney is pushing price increases of up to 38% in the US, with regions including Europe likely to see increases in the near future, and will launch an ad-supported subscription starting December 8 in the US.

Analysts expect Iger to make cuts in areas such as content spending at Disney+ and pay-TV sports network ESPN.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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