34
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Bob Iger found Disney in ‘worse shape’ than he expected, now ‘overwhelmed and exhausted’
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- Authors
- Lucas Manfredi, Scott Mendelson, Lucas Manfredi, Eileen AJ Connelly
- Published
- Oct 10 2023
- Word count
- 631 words
Maybe I misunderstand a CEO's job but it's hilarious to me that someone can literally be bad at their job and still demand a pay raise every year for a multi-million dollar salary. See also, the current head of Ford.
I do think it's a little unfair to expect a CEO to come in and change everything for the better in less than a year. I know Iger never really left the company per se, but he did leave the CEO chair and let someone else - Chapek - take the helm, for better or worse.
Don't get me wrong. I don't feel sorry for him; dude's making $27milion/yr. And the article said he spent most of the summer in a different captain's seat: that of his Mediterranean yacht. What a hard life. /s
But I do think it takes more time than 11mo to fix these issues, especially at such a large company, a conglomerate, that is Disney. Chapek was CEO for almost 3yrs. Will it take that much time to undo whatever damage? I'm not sure; that might even be too long. But I could see another year. That said, I'm not a CEO or high level executive, never have been, and I hope to god never will be. So I know nothing. I've only seen a CEO switch-up in my career once. And it did take at least a year for the current CEO to start implementing serious changes. Some better, some worse.
It's just CEOs of big media company so I don't really care that much, but this paints far too generous a picture of Iger. It's basically everything the media had been parroting at the time he left and came back, he was this majestic CEO that led Disney to great heights and now he's stepping away (at least to not be CEO, at the time). But Iger was still there and still basically calling some of the shots. Then he steps back into CEO role 2.5 years later and acts like Chapek ruined the whole thing and Iger is uniquely qualified to save the whole thing. Let's not forget a pandemic which arguably we hadn't seen something like in our lifetimes started a month into Chapek taking the seat.
This situation really seems more like Iger thought it was all Chapek's fault, and whatever connections he had and various elements of the media were happy to promote this narrative as well, and then Iger steps back in and finds out the problem isn't what he thought it was.
It's a lot like many other jobs I've seen at lower levels than CEO of smaller companies than Disney, where someone gets put into a new position to find a shitshow and then blames it all on the previous person, thinking all these dumb things can be fixed now that someone smart is in this position (themselves), only to find out there's a myriad of other factors that keep them from doing smart things which are probably the same factors the prior person was constrained by and may have been the cause of their leaving to begin with.
This article mentions a few things, one of them being acquisition of BAMTech.
So probably during Chapek's time is when this would have likely become more apparent (because of the pandemic), it was Iger that handcuffed him to it to begin with.
These massive companies aren't as nimble as smaller companies, the things that they have going on don't necessarily even show themselves for a few years. They're certainly more responsive than the government, but it's similar to how people blame the economy or various other things on the current president or even current congress for things that were probably set in motion years or decades ago.
The idea that Chapek had sunk Disney so quickly seems a bit farfetched to me. Many of the problems Disney is experiencing now could just as easily have been influenced by Iger's previous run as CEO. The chickens have come home to roost.
The amount of scapegoating on Chapek seems a bit extreme to me as well. In Castaway Cay they have a little area close to the post office where they hide away old CEO names, and Chapek’s name was actually removed from it. It just seems weirdly petty.
Iger was the one who groomed Chapek for leadership and picked him as the one to hand the reins over to, no? Perhaps he was mentoring Chapek to make/continue his own decisions and follow his plan.
I've never bought into the "single CEO ruins the company/turns the entire company's fortunes around". Though there are obviously exceptions, especially with a company as large as Disney there are too many moving parts and far too much momentum for any one person to possibly take the blame. But part of a CEO's job is to be the fall guy when things go wrong (hence the golden parachutes). One single figurehead to point to, one person to let the media squabble over - and one focal point for the public/shareholders to pin their hopes on - or concentrate their outrage.
Chapek was more of a last minute successor who, IIRC, was picked more by the Board than Iger. Iger had gone through a carousel of potential successors, none of which the Board would approve of which led to those potential successors to just leave the company entirely.
Why is it always a yacht? It feels like the billionaire's equivalent of avacado toast but it seems so consistently true. It's crazy expensive just to upkeep a normal boat that can maybe house one family, I have no clue why someone would invest in a whole yatch unless they are letting others pay for rental.
So, Iger's net worth in 2019 was estimated to be $690 million. I can't find any info about his yacht, but I did find an article claiming Tiger Wood's $20 million yacht is insane.
Iger probably owns a yacht cheaper (less "insane") than that. But even if he owned one just as expensive, it would be less than 3% of his net worth. Not a big investment.
And I can get the appeal of a yacht - you're alone at sea, you don't have noisy neighbors, you can live like royalty and you can visit any number of beautiful places on a whim. All for less than 3% of your total wealth.
I get that! Also just with the difficulty of the economy in general. I still don't feel sorry for him one bit, there's definitely some pretty easy ways to sure up budgets though, maybe start cutting into that $27m/y for starters.
I'm only loosely relating my comment to Ford because they're currently in a situation with striking workers and that CEO has been there for like 3 years or something, and GM for 9 years, with a very flat stock growth. I think my comment was more out of frustration of this "woe is me" position coming from the CEO's haha.
All this really to say, my initial comment was definitely tangentially offtopic.
It's not as if CEO pay comes down straight from the heavens or something. Like with any employee, they negotiate their salary with their boss, the board of directors, who in turn in subservient to the majority will of voting shares.
That a CEO can get more pay only means one things: they had the upper hand in negotiations. They can argue, for instance, that even if things are going poorly, they'd go even more poorly if someone else was at the helm.
The biggest issue with Disney is its sheer size and diversity of products.
The TV and movie side of it has become a complete shitshow. Productions go massively over budget, the streaming service is laughable most of the time for content Vs price, and the direction of the movies is falling short of expectations from the audiences.
Disney need to stop rehashing and live-animating old movies. Once or twice, sure, show how far tech has come. However, do NOT just remake every movie from cartoon to live-action because you can, and stop trying to remake stuff to make it diverse. Just simply make new shows! Make them as diverse and live animated as you like, but be original. That's the Disney we all loved and it was magical.
As for the theme parks, people seem to not have the dream to go any longer. I made the trip from the UK to Florida back in 2019 with a family of 5. I didn't get much change from £15k including spending money so that's not likely to happen again. Was it worth it? Maybe. Would it be worth it again? Nope. This is same outlook other friends of mine have too whereas it used to be semi-affordable and less chaotic than it is now, with everything park side being an upsell (fast passes, even faster passes, rich person queue jump, etc).
I could go on, but there's a lot of cash hemorrhaging happening in Disney and I don't think it's as magical as it once was.
A lot for those live action remakes also serve to extend the copyright on the original movies, characters, etc. so there’s more to it than just the box office receipts.
As for the theme parks, the prices have risen astronomically in the last decade and the value you get for that has not. I live near a bunch of theme parks and I used to be able to get a yearlong pass to all Universal parks for $120. A single day ticket there is now $175. Disney is around $150 for a single park.
But keep in mind that almost no one traveling from anywhere more than a day’s drive is going to make the trip for one day. So they are paying way more than that. The price of Disney vacation packages is insane. That Star Wars hotel was about $2,000 per person for two nights.
Crucially though, they're still packed.
There's a whole cult of Disney that get annual passes and go to the parks multiple times a year. If they needed to lower the price to make the parks seem crowded they would, but they're almost certainly going to keep raising them. It's pricing out lower/average income families, but that's been the case for a long time, that it's a "once in a lifetime trip". There's self-evidently enough people making enough money, or willing to go into enough debt, to keep the parks busy.
In my country a travel to Disney is an aspirational achievement. People save for years to send themselves and/or their kids to Disney. That has been the case for decades, and I don't see that changing anytime soon.
A lot of the people at Disney are paying way more of a premium than you might think.
That said, when my younger cousing went to Disney, she was most impressed by the "self cleaning" toilets in the hotel :P
You're actually understating how successful their theme parks are. My husband works at Disneyland. There are so many visitors that they have had to scale back the benefit of allowing castmembers to enter the park for free as a guest on their days off, now combining it with the limited number of passes that were to check in their family members. Fastpasses have been gated behind an extra charge service. And they have significantly upped the number of "special events" that are not open to castmembers or annual pass holders and cost extra to get into. They used to have a giant parking structure that would regularly overfill which has since been expanded to what I think is about 2-3 times bigger than the original. It's like a parking city.
Unlike my husband, I'm not a fan of Disney. Disneyland used to be a fun place to go when on off days when it wasn't full of people. It's a genuinely beautiful place, but there's so much people you can barely see it anymore. That's every day now.
I love that the very next day they announce they are raising theme park ticket prices again. They're scrambling. That helps minimally. They need to work on building back the magic. Do something to make me want to spend my money there.
I was a passholder. I've spent thousands on food and merch during the years I was a passholder. I've been really considering it again, but the magic just isn't there. I don't feel appreciated as a passholder like I did before. Make me feel better about spending all that money and I'd be totally down to spend it again!
Boo boo, maybe he needs a few more millions and another yacht to take some of the stress away.
Sorry for the glib response but it's kind of hard to feel too sorry for him – he chose to push Disney towards streaming, didn't think about how that was going to work economically, and is now reaping his just deserts.