Article on Bob Iger's comeback

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Here’s what I think may be either the best, or one of the best, take on Iger’s return:

Walt Disney Seems Intent on Making the Same Mistake Twice - TheStreet

The author is former Fool Daniel Kline. Always liked his analyses.

Forgive that I have to link a Street article - nothing against the site, but it has that ad-heavy-type design unfortunately - but like I say, to me, this may have really nailed it. Especially the last paragraph; it makes a lot of sense (read it twice, and then feel the knowing smile form on your face after absorbing its meaning).

I sort-of have been thinking the same essential thesis, but from a different angle (Kline’s angle is better). If the board can’t let go of Iger, then my thought was the board should be honest with itself and give him a decade-long contract. But Kline may have identified some particular nuances that may have driven this move, ones I hadn’t thought of, and if you read between the lines, what he might be saying is that perhaps DIS wasn’t in that bad of a shape to need an immediate replacement for the CEO. One funny thing: I didn’t recall some of the stuff he mentions about Iger maybe having to leave because of arbitrary age restrictions at DIS, maybe I slightly recalled a bit of that pertaining to the board requirements, but I found that angle also interesting.

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The article seems mostly speculation to me. Iger is over 70. Maybe he’s simply tired and wants to do something else? I remember when HP got honked up and recalled messers Hewlett and Packard to get the place straightened out again. Their cleanup didn’t last.

As for a creative company being run by beancounters, that seems to be the fate of every company, once the visionaries that founded it are completely gone. I would offer Boeing as an example right now.

Steve

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Some good points.

Like I say, sometimes it’s the office-politics nuance that drives an event like this. Definitely speculative perhaps, but it might strike a sensical chord…

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Forgive me, I read the article when it came out and I won’t slog through the advertising minefield twice if I can help it.

But it occurs to me that the board simply wanted to get rid of Chapek - and for a number of reasons - but didn’t really have anyone in the bullpen they could agree on. So bringing Iger back is (obviously) a stop gap while they reassess.

Chapek came to town at precisely the wrong time, I’ll say. The Pandemic, worldwide I remind, had to crush attendance at the theme parks, Disney’s second largest segment. The largest is Media and Entertainment, and they’ve had some high profile misfires there as well under Chapek. They released an animation with a gay central character to less than rousing reviews, also bombed with a Buzz Lightyear feature also featuring gayness, and [side issue] got in a fight with DeSantis over wokeness and had their [valuable] self-governance of Disney World taken away.

I wonder if the Avatar sequel played a part in this? It will have to be the 3rd or 4th largest film of all time just to break even. Was the CEO not aware of this? Or just too afraid to confront Cameron and say “find a way to dial it back”?

ABC made no particularly great moves during the past 3 years; Kimmel is still 3rd, the news is still 2nd, prime is meh. Losses are large at Disney+ (expected, but still…) and ESPN caused a distraction when a major investor fought to have it divested. (He’s since recanted.)

All I’m saying is there have been a series of management distractions and so-so performance (for which I do not blame him), but the board decided it was time to move on. Or rather, move back.

They’ve already reclaimed (or are close to it, I forget) the self-governing aspect of DW, I suspect we won’t be seeing a lot of LGBT headlined kiddy fare again soon, and Board has two years breathing room to try, try again.

(Never mind that Chapek was Iger’s hand picked successor; nobody says he gets it right every time either.)

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The problem with the bean counter approach in a creative business can be found in companies as different as Disney and Apple. Since its inception Apple has been known for its products which make the public willing to stand in line for days to be the first own the latest tech. With Disney it has been the latest creative park ride or feature movie. In both cases the companies fell under the curse of the bean counters and management had to be reshuffled to put the companies back on track.

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The problem is, so many of the Disney films are “franchise extensions”, ie not creative. Can’t really do a sequel to “Saving Mr Banks”. Probably could do a sequel to “Million Dollar Arm”, but they haven’t, that I have seen. But they keep cranking out Star Wars and Marvel stuff, year after year. I mean Star Wars was pretty fresh, 40 years ago, but dang.

Apple stuff has an ocean of media hype behind it. Every time a new Apple product comes out, the local “news” goes nuts, showing an Apple produced video of it, chattering about the features, publicizing the release date, price, and where you can get it, then, doing a remote “report” of people lined up in front of the store waiting for it to open. Wonder what Apple pays for all that advertising dressed up as “news”? Some of the Disney “franchise” products may have a cult, but not near the magnitude of the Apple cult. Remember how “Futureama” poked fun at the Apple cult?