Disney Brings Back Bob Iger as CEO in Surprise Move to Boost Growth

  • Iger comes out of retirement to serve as CEO for two years
  • The term of outgoing CEO Chapek affected by the pandemic
  • Disney+ streaming business in trouble
  • Disney under pressure from activist investors

LOS ANGELES, Nov 21 (Reuters) – Bob Iger returns to Walt Disney Co (DIS.N) as chief executive less than a year after retiring, a surprise return that coincides with the entertainment company’s bid to bolster investor confidence and earnings to its streaming media unit.

Iger, 71, who served as chief executive for 15 years and retired as chairman last year, has agreed to serve as CEO for two years effective immediately, Disney said in a statement Sunday. evening. He will replace Bob Chapek, who took over as Disney CEO in February 2020, just as the COVID-19 pandemic led to park closures and visitor restrictions.

Shares rose Monday to close at $97.58, up 6.3%.

“Maybe the old hand on the bar is what’s needed,” Markets.com analyst Neil Wilson said. Disney has spent billions of dollars to compete with rival Netflix Inc (NFLX.O) and is looking to boost its stock price.

The stock has fallen more than 40% so far this year, trailing the nearly 7% year-to-date decline in the Dow Jones Industrial Average (.DJI). It lost almost a third of its value while Chapek was at the helm.

“The Board of Directors has concluded that as Disney enters an increasingly complex period of industry transformation, Bob Iger is uniquely positioned to lead the company through this pivotal time,” Chairman Susan Arnold said in a statement. the press release.

Disney disappointed investors this month with an earnings report that showed mounting losses in its streaming unit that includes Disney+. Shares hit their lowest level in 20 years the day after the fourth quarter results. Read more

The streaming business lost nearly $1.5 billion in the quarter, more than double the year-ago loss, eclipsing subscriber gains. The unit has yet to turn a profit since launching in 2019, and Disney said it expects Disney+ to become profitable in fiscal 2024.

“I’m an optimist, and if I’ve learned one thing from my years at Disney, it’s that even in the face of uncertainty – perhaps especially in the face of uncertainty – our employees and our Cast Members realize the impossible,” Iger said in a memo to employees seen by Reuters.

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Some activist investors have mounted the pressure on Disney this year, including Third Point, led by billionaire Daniel Loeb.

In August, Loeb began pushing for changes, including splitting off sports television network ESPN and accelerating the planned takeover of Hulu by minority owner Comcast Corp (CMCSA.O). The investor later tweeted that he better understood ESPN’s value to Disney. Third Point also pushed Disney to refresh its board and reached a deal with the company in September that gave former Meta executive Carolyn Everson a seat.

In the days following its report of lackluster results, Trian Fund Management LP, co-founded by Nelson Peltz, bought more than $800 million worth of Disney stock, according to a source familiar with the matter. The WSJ first reported Trian’s involvement.

Trian’s view is that Iger should not regain control of the company, the source said, adding that Trian has expressed interest in a board seat as he pushes the entertainment giant to bring operational improvements and reduce costs.

The stake, which is below the 5% disclosure threshold, is not as large as Trian would like and will likely increase depending on market conditions, the WSJ reported.

Disney did not respond to a request for comment on Trian and Trian did not respond to a request for comment.


Iger left Disney on a high note as the company waged battle against Netflix in the streaming wars. During his tenure, Disney made several key acquisitions, including Pixar Animation Studios, Marvel Entertainment and 21st Century Fox, and quintupled its market capitalization.

During his first term, Disney’s annualized shareholder returns were more than 14%, well above rival Comcast and the broader stock market.

During this second round, Iger was tasked with “putting Disney on a path for renewed growth” and working with the board to identify a successor, the company said.

The management change surprised employees, two company sources said.

Shortly after the announcement of Iger’s return, Netflix co-founder Reed Hastings tweeted, “Ugh. I was hoping Iger would run for president. He’s amazing.”

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Reporting by Lisa Richwine and Dawn Chmielewski in Los Angeles; additional reporting by Eva Mathews in Bengaluru, Lucy Raitano in London and Svea Herbst-Bayliss in New York; Graphics by Vincent Flasseur; Editing by Kenneth Li, Bernadette Baum and Rosalba O’Brien

Our standards: The Thomson Reuters Trust Principles.

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