Disney Chatter: Should Bob Iger Stay? What About Steve Burke? Is a Takeover Possible?

“Running Disney is like running a country,” said one mogul. Another called an outsider pick the “kiss of death.” Read on…

Last Updated: April 11, 2016 @ 9:05 AM

My inbox is full of messages from media moguls, execs and other insiders speculating about the Disney board’s move to usher out COO Tom Staggs after priming him for the past year to be the successor to CEO Bob Iger.

A week-plus after the sudden announcement even veteran observers are still bewildered at the spot Disney has put itself in — and wondering what it’s going to do.

The board is staring at two years left on Iger’s contract with no obvious candidate to take over a phenomenally complex global media company.

“Running Disney is like running a country,” said one mogul, underlining the fact that there are precious few people with the relevant experience to take the job. (I wrote this in introducing a somewhat whimsical list of potential candidates.)

This mogul wagged his finger at me for even thinking that Peter Chernin could be a possible replacement. At 64, Chernin is the same age as Iger, and disqualified for that reason, he said.

A former Disney executive called the prospect of bringing in an outsider a “kiss of death,” pointing to history. Michael Ovitz, who served as Michael Eisner‘s president from 1995 to 1997, was an unmitigated disaster. Veteran Disney-ites were happy to leak the $1 million renovation cost on Ovitz’s office before practically driving him off the lot as an intruder from over the Mulholland pass.

Before Ovitz, Geraldine Laybourne found no love as president of Disney-ABC Cable Networks. She left two years after a 24-hour news cable channel didn’t launch. In more recent times, marketing executive MT Carney — picked by Rich Ross — was similarly rejected as an outsider from (horrors) England!

The single most qualified candidate who does not currently work at Disney already has a CEO job — Steve Burke, the CEO of NBCUniversal. Burke knows Disney well. He worked there for a decade, developing the Disney stores, running EuroDisney at its launch and then taking on ABC. Still in his 50s, he’s young enough for the job, runs a global media company that has film and TV divisions as well as theme parks. He may find the job appealing, but he may not.

After him there’s…. pretty much nobody. (But that doesn’t mean the board couldn’t take a leap of faith with someone like Sheryl Sandberg, who lacks content experience but is a top executive and on the Disney board.)

Disney has such a distinctive culture, it requires the nurturing of that knowledge over time and from within. Staggs had done that but obviously did not please the board with his performance in the past year as COO.

Some have speculated why Staggs did not wait out the process. The board informed him that they were expanding their search, but did not tell him he would not get the job. Several have reminded me that Iger was required to wait patiently through the board’s lengthy, vigorous search process when he was No.2 before finally landing the top job.

Not everybody agreed that Staggs didn’t have the stomach to wait. “Ridiculous,” another mogul told me. “They were in a succession process. He ran a race against (former CFO) Jay Rasulo and beat him. He came up a winner. More likely is he had the COO job for a year and in that period of time whatever it was that the board was looking for they didn’t get.”

James Stewart, writing in the New York Times last week, posited that given the limited window before Iger’s contract is up, the Disney board will have no choice but to beg him to stay on beyond when his contract expires in June 2018.

That definitely seems like an option, since Iger is in excellent shape for his 64 years, and still has two children at home who can keep him connected to popular culture trends.

Still another Wall Street expert said that the uncertainty around succession makes Disney a target for acquisition. With a $155 billion market cap, there are only a couple of companies that could swallow that big a fish, and they’re all up north of Burbank.

It’s an open question whether Apple, which is still searching for a content strategy, or Facebook, which has lots of cash and wants to be a content player, might eye Disney as an acquisition target.

But clearly, the board has some work to do.