Bob Iger Steps Down as CEO, Chapek to Succeed Iger as CEO

[Brianstl]

When you have 12 theme parks that takes a lot of people run them so of course that’s where most of their employees are.

I stand by that Disney is first and foremost an entertainment company. They don’t have those parks without their content. Look at Disney+, that was their biggest endeavor in years. That’s content, all of which can be used for the parks but they start with the IP/content. Disney didn’t make $11 billion at the box office in 2019 because they are a theme park company.

Disney didn't make $11 billion at the box office last year. Disney movies sold $11 billion dollars in tickets. 40% of that goes to the theaters. Then you have the cost of production and promotion. What Disney actually made in income is much smaller than that $11 billion amount.

 

[rteetz]

Does it sell merchandise? If not then no.

Not every show on Disney+ needs to sell merchandise. They need to sell subscriptions though.

 

[Q-man]

I wrote this long explanation and then decided I don’t have to explain myself on a message board. Too much personal information! What I originally posted is pretty much common knowledge among anyone who has ever spent time with a Fortune 500 CEO anyway.

I have a C suite spouse, who is also a board member, and concur with your original assessment.

Companies of Disney's magnitude don't blindside Wall St willingly.

 

[rteetz]

Disney didn't make $11 billion at the box office last year. Disney movies sold $11 billion dollars in tickets. 40% of that goes to the theaters. Then you have the cost of production and promotion. What Disney actually made in income is much smaller than that $11 billion amount.

I’m not dumb, I know that but still a major box office record. Content/IP is the driver of all things Disney does. Look at the more recent Mandalorian.

 

[Q-man]

Not every show on Disney+ needs to sell merchandise. They need to sell subscriptions though.

Now convince Bob 'Merchandise' Chapek of that.

 

[clarker99]

Is that really what Disney is first and foremost today? Over the last two fiscal years Disney Parks, Experiences and Products has generated 56% of Disney's income due to continuing operations of Disney. More than half of all Disney's employees work in Disney Parks, Experiences and Products. Disney is an entertainment conglomerate where the most important division is dominated by the parks and resorts. Everything else Disney does combined does not generate as much income or employ as many people as Disney Parks, Experiences and Products.

I think Disney is a 'story telling' company. Everything they do is about creating and building compelling stories. All aspects of the business stem from this idea. They are more than a studio or streaming service. Mechandise and Parks integration is a continuation of the their stories. They are truly a focused company. To only release 10 movies a year (PG-13 or G only) and dominate the box office is amazing. So hard to grasp how hard it must be for them to only focus on a few things when you are such a massive company.

 

[crazy4wdw]

Yes. Those of us who have stock still have time to vote. I just changed my vote from for to against each of the current board members. I have so few shares it probably won't even be noticed. But I did what I think is right.

Same here. I live in South Carolina so I'm planning to attend the shareholders meeting in Raleigh on March 11.

 

[xipotec]

Man I don't like that move at all.

Considering it was Chapek who was behind most of the price increases, cost cutting and penny pinching we have seen at the parks, its a very bad thing.

But once you let Wall Street into your business plan, and try to please them quarterly , rather than just running a reasonable profitable business, guys like Chapek will always rise to the top.

 

[Firebird060]

Honestly I see this as par for course for Disney, Walt had Roy, Walt was creative, Roy was the Money guy, Sadly Walt Passed and Roy took over for 3 years until his passing, We then had a long dry spell of creative leadership we eventually had Isner step in. Isner had his own Roy, with Frank Wells, Frank sadly passed and then Isner started to decline because he had to take on more of the money side. They then put in Iger, Iger started with a much healthier financial buffer then Isner had when he took over so Iger could expand by spending and being creative with the Companies pilliars. Now we Have Chepek who was a money guy. Which I agree is concerning, Disney seems to thrive and grow when creative people are willing to push and innovate but then they tend to plateau when the money people step in. So yes I can see everyones Concerns about "Cheap Check" but to be honest if Bob isnt able to actually grow the bussiness well within the next 5 years, I expect him to be out and someone creative to be put back at the helm. Being CEO of a entertainment company is different than being CEO of a Utility Company or Parts manufacture, you need to wow and innovate or things become stale and stagnate and you are pushed out, which means you have to be willing to take risks and gamble that it will pay out. We shall see if Chapek knows this not.

 

[AggieDizzer]

But once you let Wall Street into your business plan, and try to please them quarterly , rather than just running a reasonable profitable business, guys like Chapek will always rise to the top.

We are all friends here, and I respect your opinion, but it seems to me this displays a fundamental lack of understanding at how business works. (Or perhaps I am misunderstanding your point, which is probably more likely!) The Disney Corporation is a giant multinational corporation governed by a Board of Directors, whose purpose for existing is to increase shareholder value. There is no such thing as a "reasonably profitable business" because shareholders are always looking for maximum return on their investment.

Now there is no question that Disney has a keen eye focused on customer experience, but we have to keep in mind the vast, vast majority of Disney's customers aren't hardcore fans who populate these boards and who religiously attend D23 every year. Nearly every facet of the Disney corporation is knocking it out of the park (if you will) right now - movies, cruise line, ABD, parks, DVC...you name it. They are precisely where they should be thanks to Iger and his leadership team, and as a result Wall Street is generally very happy - as has been reflected in the stock price. I don't think Chapek has the charisma and creativity that Iger has/had, but time will tell if he can take the company to the next level.

It's worth remembering that there was a time when Disney was NOT the 100-pound gorilla they are now. After Walt's passing, when the vision of the company strayed and it was considerably weakened by a lack of vision and strength at the top, our beloved Disney was almost sold off to corporate raiders and broken up into pieces. So it may be worth keeping in mind that a very strong balance sheet and the favor of Wall Street isn't such a bad thing, even though they decide to replace your favorite attraction with a fresh new IP every once in a while.

Just sayin'!

 

[Brianstl]

Robert Meyer Burnett just really talked up Chapek on The John Campea Show. Said he used to work for him at Disney Home Video. Said he was a good boss and a good guy who really understood the business. Said Chapek was behind much of the creative stuff they did with extra features they produced.

I thought those comments were pretty interesting.

 

[rteetz]

Robert Meyer Burnett just really talked up Chapek on The John Campea Show. Said he used to work for him at Disney Home Video. Said he was a good boss and a good guy who really understood the business. Said Chapek was behind much of the creative stuff they did with extra features they produced.

I thought those comments were pretty interesting.

I have no doubt Chapek is very good at what he's done. I don't dislike him nearly as much as some do either. Nobody will top Pressler as the worst park executive. I still have my worries about him with handling major things like the Lucasfilm situation and potentially Marvel.

As a side note and a personal thing, I don't think he is a very good public speaker. I hope he gets better at that over time as he will have to do more of it.

 

[Spridell]

As a side note and a personal thing, I don't think he is a very good public speaker. I hope he gets better at that over time as he will have to do more of it.

I noticed that too. Have been watching a couple of youtube videos of him today and he def needs to work on that. He will be front and center now talking to the masses.

 

[Brianstl]

I have no doubt Chapek is very good at what he's done. I don't dislike him nearly as much as some do either. Nobody will top Pressler as the worst park executive. I still have my worries about him with handling major things like the Lucasfilm situation and potentially Marvel.

As a side note and a personal thing, I don't think he is a very good public speaker. I hope he gets better at that over time as he will have to do more of it.

Chapek's performance yesterday is one of the reasons I think this was a rushed thing and not really planned ahead of time. I really think Disney PR would have had him much better coached for yesterday if this was planned out. He never was charismatic when I have seen him before, but it seemed liked Chapek was still coming to terms with the news himself.

 

[Unvoiced_Apollo]

Theory: Bob Chapek convinced them to make him CEO because it would be cheaper to put sign over "Iger" saying "Chapek" on the offices.

 

[Aurora0427]

I have a C suite spouse, who is also a board member, and concur with your original assessment.

Companies of Disney's magnitude don't blindside Wall St willingly.

Thank you!!!! Appreciate your post!

 

[Spridell]

The stock is really taking it on the chin today. 3 hours left of trading and down over 3%

Lets see how it finishes.

 

[MissGina5]

Robert Meyer Burnett just really talked up Chapek on The John Campea Show. Said he used to work for him at Disney Home Video. Said he was a good boss and a good guy who really understood the business. Said Chapek was behind much of the creative stuff they did with extra features they produced.

I thought those comments were pretty interesting.

Im going to cling to this

 

[HairyChest]

I hope Chapek loves IP's so much, he will throw in Darth Luke Leia Han in galaxies edge including food and merchandise inspired by the classics and prequels.

 

[shafke]

We are all friends here, and I respect your opinion, but it seems to me this displays a fundamental lack of understanding at how business works. (Or perhaps I am misunderstanding your point, which is probably more likely!) The Disney Corporation is a giant multinational corporation governed by a Board of Directors, whose purpose for existing is to increase shareholder value. There is no such thing as a "reasonably profitable business" because shareholders are always looking for maximum return on their investment.



Just sayin'!

Not to hijack the thread but this is not true. They can choose to increase(maximize) shareholder value but they are not legally required to do this.

How do you define "shareholder value". My guess is that will differ person to person.
For maximum return on investment you need to define long term or short term.

For some light reading google "increase shareholder value fallacy".