Robert Iger extended his reign as CEO of The Walt Disney Co. through 2026. Finding an heir is difficult, and there are growing concerns about the viability and future of the company's famed movie studios and parks.
Disney announced Wednesday that Iger will continue to be CEO two years past his originally announced retirement date. Iger, who had been at Disney for over a decade, reluctantly ended it in 2021 and handed the top job to Bob Chapek. He was formerly a theme park executive. Chapek, who was fired by Disney in November, returned to the company as CEO.
Disney stated that Iger was asked to'set the strategic direction for renewed business growth' and 'work closely with the board to develop a successor who would lead the company after his tenure'. Iger has repeatedly stated that he will retire permanently at the end 2024 of his contract.
Iger said, "My plan is to remain here for two more years."
In November. "That is what I agreed with the board and it's my preference."
Many people in Hollywood were sceptical. Iger postponed his departure three times during his first stint as CEO from 2005 to 2020. He continued to be Disney's executive chairman for an additional year after his departure as CEO.
Iger stated in a Wednesday statement that he had agreed to stay on as CEO for two more years to make sure Disney was well-positioned when his successor took over.
He added that 'the importance of the succession can't be overstated'. As the board continues to assess a slate of highly qualified internal and external candidates I am focused on a smooth transition.
Iger, who returned to Disney in the last few months, has taken swift action to reduce costs -- $5.5 billion -- by reducing 7,000 jobs at Pixar, ESPN, and other companies. He has also pushed Disney's streaming service towards profitability. He won a proxy fight with activist investor Nelson Peltz. The battle was based in part on Disney’s poor record of succession planning. Peltz refused to comment on Wednesday.
A successor is still to be found. Disney said that the board had been considering candidates both inside and outside of the company. Iger took three executives to the Allen & Co. Sun Valley Media Conference, which is an annual 'billionaires' camp', and they are all considered as possible successors: Dana Walden, a Disney co-chair; Alan Bergman, her counterpart; and Josh D'Amaro, chairman of Disney Parks, Experiences and Products.
Iger's spokesperson said that he would not be available for an interview.
Disney shares are currently trading at around $90. This is down 3% from the previous year and 54% from their March 2021 peak. After the news broke of Iger’s extension, Disney shares were largely flat during after-hours trading.
Disney faces a number of challenges, not only succession but also new questions regarding its studios after disappointing summer box office results.
Indiana Jones and Dial of Destiny
And, to a lesser degree,
The Little Mermaid
Disney has been trying to buy Hulu in full, but it would be costly, and Disney is already saddled with $45 billion of debt due partly to the pandemic.
Disney's traditional television -- including ESPN -- which has been the company's main source of revenue for the last 30 years, is now a shadow version of what it used to be. This is due to cord-cutting, advertising weaknesses and increasing costs of sports programming. Iger believes that streaming services can help the company grow. Disney+ is losing subscribers and the streaming division as a whole has lost nearly $2 billion in profit since the beginning of the fiscal year.
Disney also has to contend with a long-running screenwriters strike. And contract negotiations between studios, and SAG-AFTRA (the guild that represents approximately 160,000 actors), have not been going well and could lead to a strike on Thursday.
Disney, unlike most rival media conglomerates can rely on the theme park business to generate profit and growth - unless there is a recession. Disney World, the company's biggest property in Florida, is experiencing a decline in attendance as part of an overall tourism slump in Florida. Analysts also report that Universal Studios is experiencing softness.
Disney is embroiled in an ongoing public dispute with the Florida Governor. Ron DeSantis, the Florida governor, has been in a public standoff with Disney over control of services provided by the government at Disney World. The federal and state courts are battling over dueling lawsuits, and DeSantis was harshly critical of Disney during his presidential campaign as a "woke" corporation.
Iger acknowledged that the company faces many challenges in an email sent to employees on Wednesday.
He said, 'There's more work to be done before this transformational work is completed, and I'm committed to see this through.' As I have said numerous times since we started this important transformation, our progress won't be linear. We will continue to navigate a difficult economy and the tectonic changes occurring in our industry.