Chief Executives: Arbiters Of Happiness And Streaming

Michael Hedges November 23, 2022 Follow on Twitter

At big publicly-traded companies the chief executive’s role is rather simple; bring happiness to the shareholders, investors and board members. Happiness in this regard means money, “shareholder value” and the like. Accomplishing this the chief executive is rewarded for brilliant business insight. The realm of big companies - including the media sector - is changing quickly. Now a chief executive is required to provide comfort and counselling. Swooping strategic innovation - like doing things - is merely an annoyance.

Bob Iger became chief executive of the Walt Disney Company this past weekend. He had been chief executive as well as board chairperson previously. Two and a half years ago he announced his retirement, remaining executive chairperson until the end of 2021. Disney people were sad to see Mr. Iger go, not just the employees but board members, shareholders and investors. By the end of 2022 he returned.

Dismissed this past weekend was Disney chief executive Bob Chapek. He had held that position since February 2020, when Bob Iger stepped down. Notably, Mr. Chapek joined the Disney family in 1993 as marketing director for the VHS subsidiary. And he moved up quickly, becoming chief executive of the parks and resorts division; large, profitable and extremely important to the Disney brand.

Like every chief executive who misunderstands the intended role in this post-modern age Mr. Chapek set about doing things. He stripped budgetary power from the Disney creatives, downgraded the media and entertainment division and invested US$25 billion in the theme parks. Earlier this year the right-wing Florida governor Ron DeSantis pushed through the state legislature a law that horrified LGBTQ rights advocates, which included a portion of the 80,000 Disney Florida employees. Mr. Chapek avoided the subject until forced. Then Mr. Chapek suggested 2,000 Disney California (Blue State) employees would be relocated to Florida (Red State). He stepped back from that thought.

He also slow-walked development of streaming service Disney+, puzzling employees and infuriating shareholders and board members. Big media companies jumped into streaming services noting the lead of Netflix and Amazon Prime Video. By November, at a New York presentation, reported Deadline (November 8), Mr. Chapek was upbeat but very vague about “making Disney+ all that it can be.” The next day (November 9) Walt Disney Company share price dropped 13% to a three-year low. By then, as they say, the fix was in.

As most reports have it, including CNBC (November 21), the Disney board “reached out” to Mr. Iger last Friday (November 18) about coming aboard. At that point nobody at the board level had indicated to Mr. Chapek that his job was coming to an end. That notice was given on Sunday (November 18), “effective immediately,” catching Mr. Chapek “and his inner circle… off guard.” The Disney board recently renewed Mr. Chapek’s contract for an additional three years. Certainly, that will be honored.

Mr. Iger began his new term by firing several executives. First to go was Media and Entertainment chairperson Kareem Daniel, responsible for the restructuring of that division and seen a Bob Chapek ally. With that, he said in a memo to staff, reported CNBC, comes a “new structure that puts more decision-making back in the hands of our creative teams and rationalizes costs. This is a moment of great change and opportunity for our company as we begin our second century.”

He has a two-year deal with Disney. The main thrust, according to Disney watchers, is undoing the missteps of Mr. Chapek and identifying a successor. For this his compensation is US$1 million a year with the possibility of annual 100% bonuses. Some who may or may not know anything are suggesting there will be a phone call to Apple chief executive Tim Cook, noted The Wrap (November 22), which might propel the ultimate streaming video giant.

See also...

• Hot Topics - The Walt Disney Company

• Hot Topics - Streaming Media