Disney has reappointed Bob Iger as CEO in a surprise move after the entertainment company fired his replacement, Bob Chapek, after less than three years on the job.
During Iger’s 15 years at the helm, Disney did something a series of major acquisitionsincluding the Marvel film franchise, the Pixar animation studio, and the Star Wars film franchise.
He He retired as chief executive in 2020, delayed his exit several times to lead the company through the early stages of the coronavirus pandemic. He was replaced by Čapek, who previously headed the theme parks division, but stayed on as executive chairman until the end of last year.
Iger is returning to the role of CEO effective immediately and will serve for two years, Disney said in a statement on Sunday. The company highlighted a fivefold increase in market value under his leadership, adding that he had a “mandate from the board to set the strategic direction for renewed growth” and was once again looking for a long-term successor.
Michael Antonelli, market strategist at Baird, a US asset manager, said Iger’s return was “probably the most significant corporate shakeup since then. [Steve] Things are back to Apple,” and the news sent Disney shares up more than 8% — about $14 billion — when Wall Street opened Monday.
“We applaud the Disney board for having the courage to make this change,” said Michael Nathanson, principal analyst at MoffettNathanson. “We have never hidden our love for Mr. Iger and the work he has done to make Disney a global powerhouse.”
Chapek has overseen a difficult period for Disney related to the pandemic forced them to close their theme parks – followed by concerns about the profitability of its streaming service Disney+. The platform is competing in a crowded field and has spent billions of dollars creating new content as it is it’s fighting off rivals Netflix and Amazon Prime Video. While Disney+ grew its subscriber base rapidly, it came at the cost of huge operating losses.
Disney also faced pressure in Florida, home to the Walt Disney World theme parks, over public opposition to the state’s “gay don’t say” laws, which prohibit classroom discussion of sexual orientation and gender identity in certain classrooms.
The company openly defied the laws, seen as repressive by many activists and teachersprompting right-wing Florida Gov. Ron DeSantis to try deprive of privileges in the state.
The company’s market value is down more than 40% in 2022, worse than the 17% decline in the S&P 500 index of large US companies.
News of Iger’s return prompted widely respected MoffettNathanson to raise his price target for Disney to $120 a share — it had been trading below $100 — its first rise on the stock since early 2020.
Disney Chairman Susan Arnold said, “We thank Bob Chapek for his long career of service to Disney, including navigating the company through the unprecedented challenges of the pandemic. The Board concluded that as Disney enters an increasingly complex period of industry transformation, Bob Iger is uniquely positioned to lead the company through this important period.
Iger said: “I am extremely optimistic about the future of this great company and I am delighted that the board has asked me to return as its CEO.” Disney has not released Chapek’s statement.
His return comes weeks after Disney’s share price reported a rare loss in revenue and profit and losses at its streaming business doubled to $1.5 billion in the year to October 1.
Disney has so far spent about $9 billion on loss-making Disney+ and about $30 billion annually on content, from Hollywood blockbusters and big-budget TV shows to NFL football, as well as its television and broadcast businesses, including ESPN and ABC.
The company said its streaming business has reached “peak loss” and that Disney+ remains on track to become profitable in fiscal 2024, when it will likely be bigger than Netflix, although it scaled back its subscriber expectations to 215 million to 245 million. on a global scale.
To achieve this goal, Disney is looking to increase the price increase to 38% in the US, regions including Europe will see increases in the near future, and will launch an ad-supported subscription tier in the US on December 8.
Analysts expect Iger to make cuts in areas including content spending at Disney+ and pay-TV sports network ESPN.
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