BURBANK, Calif.—The Walt Disney Co. announced Sunday that it has appointed Robert Iger as its CEO for the next two years, replacing Bob Chapek, effective immediately. Iger, who spent more than four decades at Disney, including 15 years as its CEO, before being replaced by Chapek in 2020, has agreed to serve for two years, with a mandate from the Board “to set the strategic direction for renewed growth and to work closely with the Board in developing a successor to lead the Company at the completion of his term,” the company said.
Although Disney earlier this month reported that its Disney+ streaming service is now the leader in number of subscribers worldwide with more than 164 million, the service, which launched in 2019 to great fanfare, has yet to turn a profit, losing $1.5 billion in its most recent quarter alone. The company expects its DTC streaming division, which also includes ESPN+ and Hulu, to be profitable by 2024 and is launching an ad-supported version of Disney+ next month, announcing last week that it had already lined up more than 100 advertisers.
During Iger’s tenure from 2005 to 2020, he led the acquisitions of Pixar, Marvel, Lucasfilm and 21st Century Fox and increased the company’s market capitalization fivefold during his time as CEO. He stepped down as Executive Chairman of the board a year ago.
Disney’s stock jumped on the announcement and analyst Steve Cahill noted that Iger’s return was a positive development for the company.
“While Chapek's departure is not a surprise due to recent turmoil and the stock's decline, Iger's resurgence is a positive surprise. Iger will be viewed as a catalyst to improve the content aspects of Disney, and we expect bigger potential strategic changes around the long-term shape of DTC," Cahall said. "While the announcement doesn't solve all of Disney's problems, we think investors will embrace it as it puts perhaps the best leader in Media at the helm with a mandate to shake things up."
MoffettNathanson analyst Michael Nathanson responded to Iger’s return, saying “the magic is back.” Nathanson added that he had never fully had confidence that Chapek would be successful after taking over the helm during the early days of the pandemic.
“With limited experience on the media side of Disney, Mr. Chapek had done an expert job in managing Disney’s parks through the challenges created by the COVID-19 pandemic, but he appeared anchored to the streaming strategy laid out in the December 2020 Investor Day which had created, we felt, unrealistically high subscriber targets without a grasp for the underlying return on investment,” he said after the announcement.
Disney thanked Chapek for his service but noted that Iger will help guide the company through challenging times ahead with the potential of a global recession—which has already impacted DTC streaming subscription levels—prompting Netflix, Disney+’s chief rival, to crack down on password sharing and launch a competing ad-supported tier.
“We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic,” said Susan Arnold, Chairman of the Board. “The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period.”
“Mr. Iger has the deep respect of Disney’s senior leadership team, most of whom he worked closely with until his departure as executive chairman 11 months ago, and he is greatly admired by Disney employees worldwide–all of which will allow for a seamless transition of leadership,” she said.
“I am extremely optimistic for the future of this great company and thrilled to be asked by the Board to return as its CEO,” Mr. Iger said. “Disney and its incomparable brands and franchises hold a special place in the hearts of so many people around the globe—most especially in the hearts of our employees, whose dedication to this company and its mission is an inspiration. I am deeply honored to be asked to again lead this remarkable team, with a clear mission focused on creative excellence to inspire generations through unrivaled, bold storytelling.”
