Disney has extended CEO Bob Iger’s contract by two years ending December 31 2026 to ensure “continuity of leadership during the Company’s ongoing transformation”.
While many in Hollywood had expected Iger to extend his tenure – as happened before when he was CEO from 2005-2020 – the move also indicates the board is not confident there are battle-ready successors on the near horizon.
The announcement comes seven months after Iger’s shock return and the ouster of Bob Chapek. Since then Iger has restructured Disney and implemented a plan to lay off 7,000 staffer or roughly 3% of the global workforce.
Like other Hollywood studios and media conglomerates the company is grappling with an intimidating confluence of financial challenges. It has been impacted by the high cost of building a streaming platform, lingering uncertainty over the theatrical model, the need to address the linear TV business, and a soft advertising market.
The company’s stock has dropped a little over 2% year-on-year and was at $90.93 in after hours trading.
What is also high on the agenda now is how to deal with ongoing labour disputes in the entertainment industry which may see SAG-AFTRA call a strike tonight and join the Writers Guld Of America, which is in its 11th week of industrial action.
The WGA strike has already registered a significant impact on the production and distribution schedule as companies forecast a turbulent period and plan accordingly. In light of this, Disney announced a substantial release calendar overhaul last month.
The dilemma of who is suited to replace Iger, a vastly experienced corporate leader and longtime Disney executive who previously served as CEO from 2005-2020, is considerable. Disney has formed a committee dedicated to the issue and there has been much change in the executive ranks of late.
Peter Rice, the British executive who ran Walt Disney Television and was co-chair of Disney Media Networks until Chapek fired him a year ago, is exploring life as a creator and recently struck a non-exclusive pact with A24 to produce and co-finance film and TV.
Iger’s restructure recently put Dana Walden and Alan Bergman at the helm of the Disney Entertainment film and TV business. Senior EVP and CFO Christine McCarthy recently departed to take a family medical leave of absence.
Former Disney top executives Kevin Mayer and Tom Staggs – both of whose names had been linked to the top job in recent years – now run Candle Media, the Blackstone-backed media venture which paid around $900m to acquire Rese Witherspoon’s Hello Sunshine.
Iger noted, “I believe Disney’s long-term future is incredibly bright. But there is more to accomplish before this transformative work is complete, and because I want to ensure Disney is strongly positioned when my successor takes the helm… I remain intensely focused on a successful transition.”
The Disney board voted unanimously to extend Iger’s contract. “Bob has once again set Disney on the right strategic path for ongoing value creation, and to ensure the successful completion of this transformation while also allowing ample time to position a new CEO for long-term success, the board determined it is in the best interest of shareholders to extend his tenure, and he has agreed to our request to remain Chief Executive Officer through the end of 2026,” said Mark G. Parker, The Walt Disney Company chairman.
In his previous tenure Iger brought Pixar (2006), Marvel (2009), Lucasfilm (2012), and 21st Century Fox (2019) into the Disney corporate empire and oversaw the launch of Disney+ in November 2019. The platform is forecast to be profitable by the end of fiscal 2024.
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