My Thoughts On Bob Chapek's Exit and Bob Iger's Return
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Banter
24-Nov-2022 |
In case you didn't hear, Bob Chapek has been fired and Bob Iger has returned to the Walt Disney Company CEO role for at least two years. Social media exploded as fans (primarily Disney Parks fans) and investors rejoiced at the news.
Chapek Has Left The Building
A few days after the news, a few more tidbits about what went on were released. For example, Bob Chapek was told only moments before the public announcement and Bob Iger was only approached to return to the role on Friday- 2 days prior. Disney CFO Christine McCarthy was at the centre of removing Chapek from the company, citing the inability to run the company after the company reported a $1.47 billion net operating loss in its streaming business.
According to the WSJ, Bob Iger was worried Chapek was "killing the soul" of the company, and was alarmed by the price increases at the Disney theme parks. These are all issues that Disney Parks fans want to see acknowledged by Disney executives. Bob Chapek appeared to be on a campaign to maximise profits while not taking into account the guest experience. Bob Chapek reportedly removed the control and decision-making powers from the creative people of the company and put the power into the hands of the business people, alienating many employees, especially PIXAR. This is exactly what happened when Steve Jobs was kicked out of Apple. It was taken over by business people and accountants. They ran the company into the ground moments from bankruptcy. Steve Jobs had to return, and well, the rest is history.
Disney is not a company that can be run as Pepsi Co can. Chapek would likely do well at a company like Pepsi, but with an experience and storytelling-first company like Disney, it won't work, at least over the long term. People love Disney and spend their money on its products and experiences due to the storytelling, experience and emotion the company creates. You can't go cutting that stuff and expect things to carry on as normal, even if it temporarily improves the company's financial results.
In my opinion, the Chapek changes felt very short-term to me. Sacrificing the long-term value and reputation of the company for short-term gains. Yes, public corporations do live a quarter-by-quarter life, and it's a CEO's job to increase the share price over time, but the focus on the share price was weighted too high over the long term health of the business. Bob Iger did a good job making good long-term decisions for the company while increasing the value of the company (and share price) over time.
In Chapek's Defence, Some Perspective
I will take a second here to say that Bob Chapek inherited the CEO position at the worst possible time. Just weeks before a once-in-a-century pandemic swooped across the world leading to many months of closures. He started his tenure when movie theatres, cruise ships, and theme parks were all closed- the majority of Disney's business. Remember that Disney have around 200,000 employees, all with salaries to pay. I am not qualified to know what should or shouldn't have been done at that stage, also we won't know even what Bob Iger would have done.
Why Change What's Good?
Sadly, we won't ever know if the changes and decisions Bob Chapek made post-lockdowns were a direct result of those lockdowns or things he had planned to do anyway.
The overall tenure of Bob Iger was a success for both fans and investors. Sure, there might be some things that you didn't like - no CEO is perfect - but I think overall, especially for the parks, Bob Iger was a positive force. What I don't understand, is why Bob Chapek came in and thought that it all had to change. Did he sit in the CEO chair and think "this all sucks, we have to change it all". (Okay I'm being a little dramatic there.) To me, Bob Chapek appeared to see everything as a cost. Magical Express, certain entrainment, etc, and not the value it brings as the sum of it all its parts to the guest experience. I hope one day Bob Chapek can give an interview to give his side, should his contracts allow. However, we cannot be naive to think Bob Iger is coming come back and undoing all the changes made post-COVID closures.
We Interrupt Your Regular Broadcast With A Conspiracy Theory
While browsing Reddit about this story I saw an interesting conspiracy theory. I don't personally believe it, but the best conspiracy theories are the convincing ones.
It was all planned.
Disney's in need of some unpopular cut-cutting measures that they know will piss people off.
Iger leaves for a few years. The new scapegoat CEO does all the unpopular stuff and consumers get mad. Iger's legacy becomes romanticized and people want him back.
Iger comes back to show Disney is hearing the fans. Iger doesn't undo anything Chapek did. The business continues and Disney saves some cash.
Bob Iger Is Back
Bob Iger is now back and already at work removing Chapek-loyal executives and undoing his changes to get Disney back on track. One of our most popular posts the last couple of months was the firing of Chapek, which goes to show how the fans have felt about Disney's direction the last couple of years under Chapek's tenure. In my opinion (which could be wrong), it seems to me that Bob Iger cares about his legacy. He doesn't want to be remembered by the person he left the company too. Also, he owns a lot of Disney stock and doesn't want to see that driven into the ground. I can't imagine the feeling of seeing your work over the last 15 years be so quickly diminished by someone you groomed for succession.
What Changes Happened Under Chapek?
There were many changes not liked throughout the company that happened under Chapek, for example, the way he handed local political issues, his removal of power from the creatives, the way he handled issues with his talent (Scarlett Johansson situation etc), firing Peter Rice who was the favourite to replace him, and more. As a Disney theme park fan site blog, we're going to focus on the changes at the parks. Bob Chapek was promoted to chairman of Parks & Resorts in 2015, it's unclear how the power structure works in these roles, but he would have absolute control being CEO since February 2020.
Hotel Parking Charges were announced in 2018, Genie+ was announced in 2019, both while Bob Iger was CEO. While Bob Chapek was CEO he axed Disney's Magical Express, removed Extra Magic Hours but later replaced it with 30 minutes early entry and select late opening evenings for guests staying at a Deluxe resort. Removed the Disney Dining Plan (although they've said it will be coming back). Increased ticket and hotel prices of the parks at one of the fastest rates in history. Increase food & beverage at the parks at one of the fastest rates in history, before global inflationary issues. Cutting live entertainment across the parks. Introducing the generally disliked Disney Park Reservation system and continuingly doubling down on the requirement. Still charging the same (if not more) high amounts for park hopping but only allowing you to park hop from 2 pm. And, removing free Magicbands when you stay at a Disney hotel, to name a few.
However, keep in mind we don't know what's Iger and what's Chapek with a few of these. Especially the early ones like hotel parking charges and the Genie+ service. For all we know Genie+ is all Iger.
What Do I Want To See Changed?
I'm realistic and I do have a business background, so I am not going to say bring back X or Y for the sake of it because it has to make financial sense. As I'm not a Disney executive and have full access to their financials, I can't work out what changes would be realistic, however, as I've said before the guest experience as a whole with everything that's part of a Disney theme park trip, is worth more than the sum of its parts. Saying that here a few things that I think would go a long way:
Cast members being paid enough and treated correctly. While it's never clear what the picture is like and how employees are treated overall, the celebrations happening with cast members on Twitter on the news Bob Chapek was fired speaks volumes. Cast members who are appreciated and properly respected (and not just looked at as a business cost) are motivated to bring even more magic to the guests they serve every day. I have full confidence that Bob Iger will put this right.Bring back Magical Express, even if you charge for it like the Disney Cruise Line bus service. Mears is already running the Mears Connect service, just partner up with them again and get those Disney buses back into action. Yes, a lot of people now just grab and taxi or Uber, but I'm not sure when the "trapping people in the Disney bubble" no longer became a priority. The ability to not have to worry about that part of the transport removes so much friction. Just get off the plane, go down to the check-in, get on the bus, and you're at your hotel. Bliss.Get rid of the Disney Park Reservation system, or at least relax it. I know what value it brings to the company with the data it provides, and I know Disney is still struggling with staffing issues and want to make sure they have the correct amount of staff at the correct places, but it has to change. Disney guessed pretty well how full the parks would be before this, and even with the UK Magic Tickets now you have to choose a date, so they know what dates tickets are booked for. Cap attendance the ticket sales end, rather than just selling tickets unrestricted and make guests make reservations. Worse case, allow Walt Disney World Resort guests to not need a reservation, just like at Disneyland Paris. If you have a restaurant reservation, guarantee access to the park. I get that it can be abused, but it can be super anxiety inducing and annoying to plan. Finally, allow park hopping before 2 pm.Bring back the Dining plan. The ability to pre-pay for things like food goes a long way to remove the feeling of being nickeled and dimed in the parks.If Genie+ is staying, bring back the ability to add it to your tickets. Disney will more and less have the data to know that they'll charge more for Genie+ on select days of the year, so it can be priced adequately. The previous UK discount for buying all 14 days on the UK ticket would be great too. For the same reason as dining, paying upfront reduces that icky feeling of having the first thing you do when you wake up in the morning in your Disney Resort hotel being making a financial transaction. Gross.The 30-minute extra magic hours in the morning barely gives you any time to do anything, make it an hour again.
What Will Iger Change?
That's what we're waiting for, but as I said earlier, we don't know whose idea belongs to who. If Genie+ was Iger's, that'll likely stay. However, that doesn't mean it won't evolve or change. Especially as the service is making Disney hundreds of millions of dollars a year now. I can't predict what I think he'll do, but you have to remember not everything is going to change overnight, and he still has the responsibility to grow the company's revenue and profit.
Like most guests, I don't like being nickeled and dimed. The amount of financial transactions going on after you've arrived is at an all-time high, and that's what is annoying people. Disney has always been expensive, but the amount of nickel and diming while you are there has only increased, and while I don't expect it to go away, I hope it doesn't increase further. I don't mind paying more for a good product, but I hate paying more and seeing things cut. Disney has the amazing problem of too many people wanting their product, so the price is only going to increase, and that's (generally) okay as long as the value and the guest experience go up with it.
Since Chapek, we've had "we care about the guest experience" being said, but the actions and changes in the parks say the complete opposite. Hopefully, that's something Iger changes again.
The Magic Is Still There & Can Only Get Better
I wrote the article Is Walt Disney World Still "Magical"? after my September/October 2022 trip, and the answer is yes, the magic is still very there much, it's just costing us all much more with some extra hurdles to experience it. What you find magical might not be what I find magical. The special person you share the experience with, the food and drinks you enjoy, having magical moments like Donald Duck point at you during a parade when wearing his costume, can depend on how magical it still is for you. I think if the magic has gone for you - or you're on the edge - I think you can be optimistic about the future.
I Want Success For All
I want the Walt Disney Company to be successful, both financially and in the goals Walt set out when he started- bringing the magic to our lives. I want the families who spend thousands and thousands of hard-earned dollars to have the best time possible and not feel like they're a walking wallet. While I have only been once post-COVID lockdowns so far, not once I have been and come back thinking I didn't feel like I got my money's worth, even when spending thousands to go. I think that feeling is slipping for many families, and I hope that course corrects.
Now with Bob Iger as CEO and Josh D'Amaro (and from what I've read he's a nice and well-liked guy who genuinely loves the parks) in charge of the parks, I look forward to the future. While we don't know the power dynamic between the roles (just like we didn't when Bob Iger was CEO and Bob Chapek was in charge of the parks), the decisions and changes going forward will be anticipated by many. Overall, I'm a lot more optimistic about the future of the parks than I was last week, that's for sure.
We, like many others, love the parks. Steve Jobs always used to say that if you build good products that people want, the money will follow. We want the parks to succeed and see the guest experience to only improve.
As Dame Judi Dench says, "While no one knows for sure what we'll see or do, I do know it will be quite an adventure-an adventure that we'll take and make together. See you in the future!"
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