Iger steps down as Disney CEO, Chapek succeeds him

Bob Iger abruptly stepped down on February 25 as chief executive of The Walt Disney Co., an executive shift poised to cause significant shockwaves both in and out of sports.

Iger, who had previously pushed back on talk of retirement multiple times and is under contract through the end of next year, will become executive chairman and now direct the company’s creative endeavors. The Disney business will now be run by Bob Chapek, who had been chairman of Disney parks, experiences, and products.

Chapek, who becomes Disney’s seventh chief executive, is something of a surprise selection, as industry conventional wisdom had long centered on Kevin Mayer, chairman of direct-to-consumer and international for Disney, as the one to succeed Iger, who has run the company for nearly 15 years.

The move comes as Disney has debuted both the ESPN+ and Disney+ streaming services to strong early success, and completed its $71.3bn acquisition of assets from Twenty-First Century Fox.

“With the successful launch of Disney’s direct-to-consumer businesses and the integration of Twenty-First Century Fox well underway, I believe this is the optimal time to transition to a new CEO,” said the 69-year-old Iger. “I have the utmost confidence in Bob and look forward to working closely with him over the next 22 months as he assumes this new role.”

Chapek, 60, had unanimous support from Disney’s Board of Directors to succeed Iger. He has been with Disney since 1993, and among his key accomplishments was creating the company’s “vault” strategy for home video, bringing key feature films into the consumer market in cycles, helping boost repeat demand.

“Mr. Chapek has shown outstanding leadership and a proven ability to deliver strong results across a wide array of businesses, and his tremendous understanding of the breadth and depth of the company and appreciation for the special connection between Disney and its consumers makes him the perfect choice as the next CEO,” said Susan Arnold, independent lead director of the Disney Board.

The departure of Iger from oversight of the Disney business promises to massive implications on the global sports economy, and particularly in the US. Iger had taken an active role in the administration of Disney holding ESPN, particularly as the network seeks to pivot from the prior cable-dominant distribution landscape to the current multi-dimensional one that now prominently includes OTT streaming.

ESPN is also expected to be a prominent player as both the National Football League and Major League Baseball will soon go to market with large pieces of their media rights that are nearing expiration in their current terms. Thus, Chapek will have a major voice in how aggressive Disney and ESPN get for those rights.

In a conference call with investment analysts, Iger sought to downplay the apparent suddenness of the move, and said it had actually been in the works for some time.

“Thinking about what I want to accomplish before I leave the company at the end of 2021, getting everything right creatively would be my No. 1 goal,” Iger said. “I could not do that if I were running the company on a day-to-day basis….It was really that simple. It was not accelerate for any particular reason other than we felt the need was now to make this change.”

Chapek for his part does not bring a major ideological split from Iger, at least not in the immediate term.

“I share his commitment to creative excellence, technological innovation, and international expansion, and I will continue to embrace those same strategic pillars going forward,” Chapek said. “A lot of heavy lifting has already been done, and now it’s a question of refining that.”