WSJ Article Lays Into The Many Issues During Bob Chapek's Reign As Disney CEO
News - WDC 17-Dec-2022
The Wall Street Journal has published a fantastic new article titled "Bob Iger vs. Bob Chapek: Inside the Disney Coup". The article dives deep into Bob Chapek's reign as CEO and the ultimate the return of Bob Iger. Keep in mind Bob Iger was still on Disney's board of directors until the end of 2021 as Bob Chapek was CEO. Here are some interesting tidbits about the company as a whole and some also tidbits relating to the Disney Parks we know and love.
When COVID-19 hit, Iger wanted to delay letting go of staff, but Chapek wanted to cut costs and keep company cash as a priority.
Mr. Iger wanted to delay staff cuts until Congress approved legislation to blunt the economic impact of the pandemic. Mr. Chapek sought to move quickly to cut costs and preserve cash. Mr. Iger won, persuading the board that it was better to wait. Mr. Chapek complained privately to his deputies that he wasn’t fully in control. Mr. Iger told the New York Times in April 2020 that his plan to take a back seat was undone by Covid-19. Mr. Chapek was livid. Any hope Mr. Chapek would seek out Mr. Iger for counsel went from unlikely to out of the question.
If you remember back in June 2022 (after Iger left), the board all voted to renew Bob Chapek's contract until 2024. The media at first thought that was a little strange, but it appears a lot of them did it reluctantly.
In June, Disney’s board instead renewed Mr. Chapek’s contract through 2024 in a unanimous vote. Two directors, Mr. Parker and Mary Barra, General Motors Co. CEO, had been reluctant to go along. Others persuaded them that support of the full board would boost Mr. Chapek’s confidence and shore up his performance. Mr. Iger told a friend he believed Mr. Chapek was a failure in the most important measures of success for a CEO: internal satisfaction, investor relations and consumer support.
What started setting off alarm bells was the damage that was being done to the Disney brand.
An internal survey of Disney employees had found low morale. And, according to a survey of consumer confidence by the Harris Poll, which Mr. Iger followed closely, fans were falling out of love with the Disney brand.
What's fascinating is some of the new changes at the Disney Parks hitting the main stream media like this.
Some customers were upset by a theme-park reservation system that Mr. Chapek had championed. Park visitors could pay a surcharge to skip long lines at popular attractions—on top of rising admission prices—which seemed to turn the quintessential American middle-class vacation into a pastime for the affluent.
It seemed to got to the point that anything bad that happened in the parks, Bob Chapek would get blamed. Even by the casual fans.
Even casual Disney theme-park fans blamed Mr. Chapek for changes they disliked. Park visitors posted videos on TikTok and Instagram, saying rides closed for repair were “Chapek’d.” “Bob Cheapek” became a meme on fan sites and message boards, referring to the CEO’s reputation for cost-cutting and higher prices.
It then came to Bob Chapek's last earnings call, and things were not looking good.
Disney shares were down about 40% for the year when the company’s board met at the end of September. The meeting quickly became a referendum on Mr. Chapek’s leadership.
Ms. McCarthy told directors Disney would likely miss analyst expectations for revenue and profit in the coming quarter by a wide margin, catching Mr. Chapek off guard. Streaming losses were growing, she reported, and theme-park margins were shrinking.
Chapek then was blaming other executives for trying to making him look bad.
Mr. Chapek complained to colleagues that Ms. McCarthy gave numbers that they hadn’t previously discussed, making him look bad
Executives also starting getting worried about their jobs, especially after Bob Chapek fired Peter Rice, who was most suited to be next in line for CEO, as well as rumblings Josh D’Amaro, head of the parks division, might quit.
As the environment inside Disney’s C-suite worsened, more executives voiced concerns in phone calls to Mr. Iger. Some worried Alan Bergman, the studio chief, and Josh D’Amaro, head of the parks division, might quit. In June, Mr. Chapek had abruptly fired Peter Rice, Disney’s highest-ranking TV content executive, a move that remained on the minds of many creative leaders at the company.
Disney bloggers (I guess that includes us?) and social media influencers were using their reach to amplify guest complaints from their audiences.
Bloggers and social-media influencers amplified visitor complaints about rising ticket prices. Market research by Disney found white visitors 55 and older souring on the parks because they viewed the company as "too woke."
Bob Iger is now CEO of The Walt Disney Company again for at least two-years. If you're a subscriber to WSJ, the full article is well worth a read.
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