Disney Town Hall Addresses CEO Handover, Fields Questions About Abrupt Timing

The morning after Disney’s surprise announcement naming Bob Chapek CEO effective immediately, replacing longtime chief Bob Iger, the two executives addressed their troops Wednesday during an hourlong town hall on the Burbank lot that was simulcast to Disney employees around the globe.

Iger and Chapek — or as one attendee jokingly called them, “Big Bob and Little Bob” — took to the stage together with Disney’s senior leadership in the front row of the theater. Their remarks were followed by questions from the audience.

According to people who attended the meeting, neither executive provided additional insight into the abrupt timing of the handover, and most attendees used their moment at the mic to thank Iger for his contributions to the company.

Disney announced Tuesday afternoon that Chapek replaced Iger as CEO. Iger, however, will stay on as executive chairman and focus exclusively on the creative content businesses until the end of 2021, when his contract ends.

Iger reiterated comments from a conference call the previous evening that the setup would give Chapek time to get up to speed. Chapek has worked across most of the company’s divisions since joining Disney in 1993.

Iger also made it clear that Chapek now has full authority, we hear. Yet Iger’s new role shepherding the creative aspects of Disney has created some confusion about who exactly is in charge, and those questions we hear were not fully resolved during today’s town hall.

Chapek stressed that there will be no big changes of course as Iger has positioned the company well for the future, sources said. The session ended with a standing ovation for Iger.

By most accounts, Iger, who joked that he will not miss doing earnings calls, appeared relaxed onstage, and he and Chapek had an easy rapport.

The tone of the town hall was generally upbeat, though there were multiple references to the coronavirus, which has impacted all entertainment conglomerates and particularly Disney’s park division, which was forced to temporarily close the Shanghai and Hong Kong locations.

Meanwhile, Wall Street remained puzzled and investors knocked Disney shares lower today as they continued to digest the announcement of Iger’s semi-exit as CEO after 15 years. The stock fell 3.75% on a day when the broader market ended mostly flat as it attempted a rally following a steep two-day decline. Snarky insiders speculated the CEO change came at a moment when a stock dip could be laid at the feet of an overall market swoon on coronavirus jitters.

Analysts agreed that Chapek, who, over 27 years, has run home video, distribution, consumer products and parks, knows the company’s businesses incredibly well – all but one analyst, that is.

“Perhaps the most obvious omission is a lack of experience in the Media Networks business – the company’s biggest segment, and the one where Disney faces the most significant challenge,” said Cowen & Co.’s Douglas Creutz in a note Wednesday.

“There is no disputing that Chapek is an extremely talented operator who has proven his ability to execute across three of Disney’s complex global business units (Parks, Consumer Products and Studio Content Distribution), not to mention, he knows and fits well into the Disney culture,” agreed Richard Greenfield of LightShed Partners. “However, when we look at the rapidly changing media landscape, not to mention how early Disney is within their pivot from linear TV to streaming video, we are hard pressed to believe all they need going forward is execution.”

Chapek, at the town hall, expressed his excitement with Disney+ and how he’d like to immerse himself in that division moving forward.

But how that will work isn’t clear. Iger “appears to have an amorphous and a wide ranging role directing the company’s creative efforts while being Executive Chairman which could create a bit of an awkward transition in our view in terms of decision making internally,” said Kannan Venkateshwar of Barclays.

Given that Iger will remain with until the end of next year, “it is not clear why the company felt the urgency to undertake the transition immediately,” he added.

The company did not name a successor to Chapek at Parks, Experiences, and Products, “which also seems to imply that the timing of the transition wasn’t planned.” Iger said on the Tuesday call that the board has been discussing succession for several years and Chapek had been the top candidate for some time.

Deadline’s Anthony D’Alessandro contributed to this report.

Source: Read Full Article