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HomeUncategorizedDisney’s Robert Iger Loomed Over His Successor as CEO, Creating Tensions

Disney’s Robert Iger Loomed Over His Successor as CEO, Creating Tensions

“We’re not concerned at all about creating any confusion,” he said in an interview with CNBC later that afternoon.

Less than a month later, the two men were at odds over Mr. Chapek’s plan to lay off tens of thousands of workers at Disney’s theme parks as Covid-19 hit, say people familiar with the men.

Soon after that, Mr. Iger announced he was taking a more active role because of the pandemic, leaving Mr. Chapek to feel as though he had been undermined from the start, according to people familiar with the matter.

Relations between Mr. Iger and his successor—the “two Bobs” who are among only seven men to lead Disney in its nearly 100-year history—never recovered from those early days of Disney’s transition of power, according to people who worked with both executives.

Mr. Iger loomed large over Mr. Chapek’s short tenure as CEO, even after he left the company altogether at the end of last year, up until he returned in full fashion this week as CEO again. Over the past two years, he has made it known to friends and colleagues that he disapproved of changes Mr. Chapek was making, setting off a whisper campaign across Hollywood that never quite allowed Mr. Chapek to escape his predecessor’s shadow.

Robert Iger’s Biggest Moves That Reshaped Disney: From Star Wars to Streaming

Mr. Chapek’s ouster Sunday followed what some of his supporters say was a losing hand to begin with. Mr. Iger was widely seen as one of the entertainment industry’s best executives of all time—so successful he has said he seriously considered a run for president. After more than 25 years at Disney, Mr. Chapek took over as CEO days before the pandemic would detonate his bottom line, prompting the furloughs and layoffs of thousands of employees and shutting down the film and TV production desperately needed to keep Disney’s streaming services growing.

Last week, Mr. Iger’s career took a turn when he received a call from at least one intermediary to Disney’s board asking if he’d consider replacing Mr. Chapek, according to people familiar with the matter. Then, on Friday, Disney board Chairwoman

Susan Arnold

called to offer him the job, confident he would accept, the people said.

Corporate governance officials say departing CEOs have to strike a balance when passing the baton.

Joseph Yaffe,

a partner at law firm Skadden, Arps, Slate, Meagher & Flom LLP who advises on corporate governance, said the continued presence of a former CEO generally can be a double-edged sword.

“A critical factor in whether it can work—which is very difficult to assess in advance—is the mind-set of the former CEO,” he said. “Are they ready to hand over the reins to new leadership and exercise their influence judiciously, or are they simply unable to take their hands off the wheel?”

The head of the parks and consumer products division at the time, Mr. Chapek was named CEO of Disney in February 2020, after the board’s nominating and governance committee vetted a number of internal candidates, people familiar with the matter said.

Disney began to furlough tens of thousands of workers in April 2020 as the spread of Covid-19 shut down its theme parks.



Photo:

david mcnew/Agence France-Presse/Getty Images

His first major rupture with Mr. Iger came just weeks later. Mr. Iger wanted to delay any Covid-related staff cuts until the Cares Act, a massive spending bill being debated in Congress meant to blunt the pandemic’s economic impact, was signed into law. That way, laid-off Disney employees could take advantage of its protections, Mr. Iger argued, according to people familiar with the matter.

Mr. Chapek wanted to move more quickly with layoffs, these people said. At the time, many CEOs felt enormous pressure to cut costs and preserve cash.

Mr. Iger overruled Mr. Chapek, these people said, and convinced the board that it was better to wait. Then-President Trump signed the bill into law in late March, and Disney began to furlough tens of thousands of workers in April. Mr. Chapek was infuriated, some of these people said, and complained to deputies he was being undermined from the minute he was promoted.

Mr. Iger, who had said he would focus on creative work as executive chairman, was interfering in day-to-day matters that were supposed to be the CEO’s domain, Mr. Chapek told his inner circle at the company, people familiar with the matter said.

Since leaving the company altogether last year, Mr. Iger has been known to dominate lunch conversations around Los Angeles with talk of how he thinks Mr. Chapek has taken Disney in the wrong direction, according to several people who have dined with him in the past several months. Some associates said Mr. Iger would fixate on the topic so much that it became uncomfortable.

Mr. Iger felt Mr. Chapek, who set ambitious goals for the growth of Disney’s streaming business, had given priority to that business at the expense of other parts of Disney, like cable television and the theme parks. Mr. Chapek said in 2020 the number of subscribers was growing fast, and he dramatically boosted initial growth projections. Mr. Iger thought Mr. Chapek’s projections went too far, according to people familiar with Mr. Iger’s thinking.

Mr. Iger also felt that Mr. Chapek was too responsive to changes in Disney’s share price, and Mr. Iger was alarmed by increases in prices at Disney theme parks that Mr. Chapek argued would boost revenue and limit overcrowding, these people said. Mr. Iger received calls from creative executives frustrated with Mr. Chapek, people familiar with the matter said.

“He’s killing the soul of the company,” Mr. Iger told more than one confidant.

The contrast in the two men’s public personas came to a head in March of this year, when Mr. Chapek faced backlash from employees and fans for saying he felt it would be inappropriate for him to weigh in on Florida’s controversial Parental Rights in Education bill, also known by opponents as “Don’t Say Gay” legislation. When Mr. Chapek did speak out against the bill, he and Disney became targets of conservative politicians including Florida Gov.

Ron DeSantis.

As CEO of Disney, Bob Chapek said it would be inappropriate for him to weigh in on a controversial Florida bill dubbed by opponents as ‘Don’t Say Gay’ legislation.



Photo:

MARIO ANZUONI/REUTERS

Mr. Iger, meanwhile, posted an unusually partisan message to his Twitter account, echoing support for President Biden’s criticism of the bill.

“I’m with the President on this!” the message said. “If passed, this bill will put vulnerable, young LGBTQ people in jeopardy.”

Over the spring, soon after the Florida controversy, some board members considered replacing Mr. Chapek, and Mr. Iger was aware of the discussions, people familiar with the matter said. Ultimately, Ms. Arnold publicly supported Mr. Chapek in June, and the board soon after extended his contract.

For some of his colleagues inside Disney, Mr. Iger’s life outside the studio gates was an extension of his final years inside them, when it seemed he simply didn’t want to leave. Mr. Iger postponed his own retirement four times. For a while, he drove a car with a customized license-plate frame that asked: “Is there life after Disney?”

Mr. Iger is already making changes to Mr. Chapek’s plans. In one of his final memos to employees as CEO, Mr. Chapek said the company would be making “tough and uncomfortable” cost-cutting decisions and that layoffs were coming.

This time, Mr. Iger has told close associates, he has another priority beyond righting the company’s finances.

He is planning to be more involved in the CEO succession process this time around, some of the people said.

Ultimately, the people said, deciding who comes next will be part of his legacy.

Robert Iger, who appeared at Disneyland in 2019 with stars of the Avengers franchise, was widely regarded as one of the entertainment industry’s most successful executives.



Photo:

Jeff Gritchen/SCNG/Zuma Press

Write to Erich Schwartzel at erich.schwartzel@wsj.com, Emily Glazer at Emily.Glazer@wsj.com, Robbie Whelan at robbie.whelan@wsj.com and Jessica Toonkel at jessica.toonkel@wsj.com

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