Sharon Waxman On the Business of Entertainment
The founder and editor of TheWrap’s take on life on the left coast, high culture, low culture and the business of entertainment and media. Waxman writes frequently on the inside doings of Hollywood, and is is also the author of two books, Rebels on the Back Lot and Loot
Turns out that corporate rifts have consequences.
It’s an open secret in Hollywood that Disney Executive Chairman Bob Iger and CEO Bob Chapek have been estranged for months, dating back to the very start of last year’s pandemic. Now the consequences of that estrangement are becoming clear.
My sources tell me that Iger and Chapek do not interact regularly. But that is pretty damn obvious, given the embarrassing lawsuit that Scarlett Johansson filed last week, accusing Disney of breaching her contract for box office-based profit participation on “Black Widow” after the movie was released day-and-date on Disney’s streaming service Disney+. And worse, there was that insane foot-in-mouth response to the lawsuit in which a spokesperson for a company that laid off 32,000 workers last year officially castigated Johansson for “callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic.” And then revealed her $20 million based salary. (Excuse me, what???)
I talked with a half-dozen executives familiar with Disney and its culture. It seems that Iger either intentionally allowed Chapek to shoot himself in the foot with Johansson’s team by failing to step in and negotiate an alternative to a lawsuit, or that he is so disconnected from his successor that he was not in the loop to step in as he usually would.
Either possibility says bad things about how leadership and succession is working at Disney.
One Disney insider told me that Iger found the lawsuit “mortifying” and thinks that Chapek and the company “bungled it.” But Zenia Mucha, Disney’s chief communications officer, wrote in an email: “None of this is true period.” She declined to elaborate. (Mucha, who announced last month that she was leaving Disney early next year after two decades, also sent the statement last week castigating Johansson.)
“What do you expect?” asked a former Disney executive who called it an “irksome” rookie error. “Chapek and Iger are not spending time and comparing notes and working to mutual success, which is kind of what you look for in a succession plan. Talent is important. You should proactively say: ‘Let’s figure this out.’”
As TheWrap has previously reported, Chapek — who rose to CEO after running the theme parks division — has always been called out for one big hole in his résumé: no talent relationships. And this is where having Iger as executive chairman seemed absolutely critical. Having chosen Chapek after rejecting other veteran executives (Jay Rasulo, Tom Staggs, Kevin Mayer), the smooth-talking Iger could groom Chapek, supposedly, in this area of weakness.
Iger might also have warned Chapek off leaving this in the hands of his distribution chief Kareem Daniel, an engineer turned investment banker with a ton of power — and also zero experience managing talent.
“This signals that everything fell apart,” the first Disney insider said. “There are checks and balances in place to prevent things descending into lawsuits and insults… You have to blow by all the different restraint systems designed to keep everyone working together and playing nice. Scarlett’s team didn’t just go to the courthouse and sue.”
This executive also noted with surprise the “anger” in the company’s statement about the lawsuit, which I can confirm both shocked and insulted Johansson and her team.
Another Disney watcher said it doesn’t even matter, given the fallout, whether the rift is real or not. “It’s a clear sign of dysfunction if anyone wonders if Iger was involved or not. “That in itself is proof of the rift,” this person said.
How did it begin? Early in the pandemic, when Chapek had only been CEO for a few months, Iger gave an interview to Ben Smith at The New York Times stating that he was stepping back in to a more active role to help lead through the crisis. That was news to Chapek — he felt blindsided and undermined.
It has been a slow, ongoing drift since then, according to my sources, who have been gossiping to me about this for at least six months. But only now have the consequences of that corporate estrangement become clear.
Let’s be honest: Iger’s tenure as CEO of The Walt Disney Company was historic, epic in every way. He drove the company to huge expansion, exciting acquisitions and drove the stock price from $24 in 2005 when he became CEO to many times that value when he left in January 2020.
But if he blows the succession piece, his legacy will be tarnished. After all, even Michael Eisner figured out how to get that right.
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