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FOCUS-At Disney, Iger confronts succession problem he helped create

Walt Disney Co’s Bob Iger will once again be asked to identify his successor as chief executive — one of his greatest failures in his first go-around
as the company’s leader, say people who have worked with him and experts.

November 23, 2022
By Dawn Chmielewski and Helen Coster
23 November 2022

By Dawn Chmielewski and Helen Coster

Nov 22 (Reuters) – Walt Disney Co’s Bob Iger
will once again be asked to identify his successor as chief
executive — one of his greatest failures in his first go-around
as the company’s leader, say people who have worked with him and
experts.

Iger is credited with shaping Disney as a modern media
company, acquiring well-known entertainment brands such as
Pixar, Marvel and Star Wars, that would serve as a beacon to
consumers as they navigate a crowded entertainment landscape.

But Iger, 71, was reluctant to let go of the reins of the
company that gave him “The Ride of a Lifetime,” as his 2019
autobiography is titled. In his 15 years as Disney chief
executive, Iger postponed his retirement four times, sidelining
would-be successors.

A delay in passing the baton for one of the most coveted
jobs in Hollywood, and the departure of talented executives
whose ambitions were thwarted, may well have set the stage for
the succession problem Iger is tasked with helping solve as he
returns to the company for a two-year term. Part of
his mandate, according to Disney, is to work with the board to
develop a successor to lead the company.

“It’s the one black eye Bob Iger has,” said Bank of America
Managing Director Jessica Reif Ehrlich. “He’s done so much, so
well, but what he hasn’t done well is find a successor.”

Disney-watchers see Dana Walden, a former Fox television
executive who leads Disney’s General Entertainment Content
group, and Disney Parks, Experiences and Products Chairman Josh
D’Amaro as top internal candidates to succeed Iger.

Walden and D’Amaro did not reply to requests for comment
made through their publicists.

Iger returns to the company after his hand-picked successor,
Bob Chapek, was removed in less than three years following a
series of missteps and weak fourth quarter results.

A spokesperson for Disney declined comment.

Iger’s track record caps a long history of succession
planning at Disney that evokes Greek mythology — Cronus eating
his young.

Jeffrey Katzenberg, who as studio chief revived Disney’s
moribund animation unit, left the company in 1994, after
lobbying unsuccessfully to be named president, according to
reporting in “Disney War,” an account of chief executive Michael
Eisner’s two decades at the company.

Eisner instead tapped his friend, Hollywood super-agent
Michael Ovitz, according to author James Stewart’s account.
Ovitz was fired after just 14 months as president and walked
away with a $130 million severance package, according to court
documents.

Iger, who assumed the job of chairman and chief executive in
2005 following a bitter battle between Eisner and heir Roy E.
Disney, is credited with stabilizing the company and elevating a
group of executives seen as likely successors.

One of those executives was Tom Staggs, the company’s former
chief financial officer and parks chairman, who was named chief
operating officer in 2015. A little over a year later, Staggs
left the company after losing Iger’s support, according to two
people familiar with the matter.

Iger delayed his retirement until July 2019, to give the
board time to search for a successor. The $71.3 billion
acquisition of 21st Century Fox in 2019 prompted him to postpone
his exit from the Magic Kingdom again, this time until the end
of 2021.

THE OTHER BOB

As Iger’s contract drew to a close, a new collection of
senior executives were seen as likely candidates to replace him.

Chapek was among a shortlist of internal candidates vying
for Iger’s job, according to a source familiar with discussions.
Another seen as a top contender was Kevin Mayer, Disney’s
longtime head of strategic planning who had shepherded the
successful launch of Disney+, according to sources.

Disney’s board selected Chapek, whom Iger praised in the
acknowledgements of his memoir for doing a “tremendous job”
running the company’s consumer products and theme park
businesses, and playing an “invaluable” role in opening Shanghai
Disneyland.

Mayer, who according to former employees, was blindsided by
the announcement, left Disney three months later, accepting a
job as chief executive of TikTok. He is now co-CEO of Candle
Media with Staggs.

Chapek’s tenure was rocky, including a global pandemic that
closed theme parks and cinemas and halted film and television
production; an unusually public tussle with “Black Widow” star
Scarlett Johansson; and a corporate clash with Florida Gov. Ron
DeSantis over an education law that restricts classroom
discussion of sexual orientation or gender identity.

Iger’s return to Disney has already produced one high-level
shake-up. Chapek’s longtime deputy, Kareem Daniel, chairman of
Disney Media and Entertainment Distribution, will leave the
company amid a restructuring of the unit, Iger announced Monday.

Kellogg School of Management strategy professor Craig
Garthwaite said that although Disney clearly has a problem
developing succession plans, its larger issue remains the all-in
streaming video strategy Iger announced in 2017.

That strategy, which led to early success for Disney+, has
since created a financial drag for the company as expenses mount
and streaming subscriber growth cools industry-wide.

“The problem of any company with a very long-running,
successful CEO — you attribute anything that goes wrong after
that to the next CEO,” said Garthwaite. “Disney’s trouble now is
Disney+ is a tough business to run because streaming is a tough
business to be in.”

(Reporting by Dawn Chmielewski in Los Angeles and Helen Coster
in New York; Editing by Kenneth Li and Suzanne Goldenberg)

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