“I should be spending as much time as possible on the creative aspects,” Iger says
A seismic shock reverberated throughout Hollywood on Tuesday that even the Avengers would be hard-pressed to contain. Bob Iger, after 15 years and a few delayed retirements, finally gave up the keys to the Magic Kingdom.
Bob Chapek, who has overseen the company’s lucrative parks and consumer products division, is inheriting Mickey’s Castle, which finally sets in motion the company’s long-awaited succession. But why now, with his contract not up until the end of 2021, was this the right time to make the move? Iger told analysts that Tuesday’s decision has everything to do with his desire to ensure Disney remains the top creative outlet before he heads out the door for good when his contract expires at the end of 2021.
“Getting everything right creatively would be my No. 1 goal. I couldn’t do that if I were running the company on a day-to-day basis,” he said. “The goal was to turn over the day-to-day management of our company to Bob (Chapek).” He added that this will “free me up just to basically focus on the creative side. It was just that simple.”
The decision, which was abruptly announced Tuesday afternoon just after the markets closed, was seen as a surprise. After all, even though Iger had teased that 2021 would finally be the time he would hang it up at Disney, there had been no chatter that a change was coming. But Iger said that the board had long ago identified Chapek as the one who would take over.
“We felt the need was now to make this change. We identified Bob quite some time ago as a likely successor to mine.” He added this temporary setup will allow for a smooth transition by giving Chapek a soft landing into what is arguably one of the most pressure-packed jobs in the Hollywood.
But Chapek is no stranger to Disney. He’s been with the company for 27 years in a variety of roles. He oversaw the Disney’s largest business segment, with operations around the globe and more than 170,000 employees worldwide. In 2018, the parks and resorts segment brought in $20.3 billion in revenue, up 10% from 2017 and nearly 20% from 2016. As CEO, his annual salary will increase to $2.5 million.
Chapek was among the three top Disney executives in the running for the top job, along with Walt Disney Television chairman Peter Rice and Kevin Meyer, who oversees Disney+ and the company’s other streaming services as chairman of direct-to-consumer & international.
Chapek, only the seventh CEO in Disney’s 100-year-plus history, will have big shoes to fill. Since Iger took over in 2005, he’s increased Disney’s net income from $2.5 billion to $13.1 billion as the stock price has ballooned 450%. He capped his final full year with a record seven blockbusters that topped $1 billion in ticket sales at the global box office.
Iger’s contract has been extended three times while he’s publicly talked about his exit strategy, most recently prolonging his retirement to oversee last year’s $71.3 billion acquisition of Fox’s film and TV entertainment assets and the launch of the Disney+ streaming service.
Now that Fox is integrated into Disney’s world and the launch of Disney+ is in the rearview mirror — the nascent streaming service already has more than 28 million subscribers within its first few months — Iger felt more comfortable that now was finally the time to end his successful tenure.
“I should be spending as much time as possible on the creative aspects,” Iger said.