Disney puts Bob Iger in charge once more – but can star exec bring the magic back?

Given its recent history, we shouldn’t be surprised at the company’s boardroom drama, writes James Moore

The prodigal son returns: Bob Iger is back as boss of Disney (Invision)

It is the latest twist in your favourite streaming drama: the shock defenestration of the super-company boss and his replacement by the very man who hired him – all over the course of a tumultuous weekend.

Disney staff were informed that Bob Chapek was out and Bob Iger was back in an email on Sunday night. Soaps don’t get much better than this. Netflix must be salivating.

Chapek only recently had his contract renewed. True, boardroom bust-ups aren’t unusual. But this is Disney, one of the world’s biggest and most important companies, not an NFL team with an impatient owner apt to fire his head coach at the drop of a touchdown pass.

Iger declared that it was with “an incredible sense of gratitude and humility – and, I must admit, a bit of amazement – that I write to you this evening with the news that I am returning” in an e-mail to staff.

It isn’t just you who’s amazed, Bob.

But perhaps the mess Disney has got itself into is the really amazing thing. After all, this is a company with some of the brightest stars in the entertainment galaxy on its roster.

It is the home of Marvel, Star Wars, Pixar, Walt Disney Animation, 20th Century Studios (20th Century Fox as was). It’s where the Disney princesses hang out, and Buzz Lightyear and Woody chew the fat at the water cooler. “How ’bout them Dodgers, Wood?”

Yet despite having bought up your collective childhood, its recent results have been grey and drizzly, capped by a disastrous fourth quarter earnings statement in which expectations were undershot across the board. And the forecasts for the future were none too cheerful either.

That’s something Disney just doesn’t do. It didn’t do that when Iger was at the helm. Shares lost 12 per cent of their value after the statement. This year, they’re down by 40 per cent.

How is it that so many stars have stopped shining?

Chapek isn’t solely to blame for the problems Disney has encountered.

It is often forgotten how much money is brought in through its theme parks, both in revenue and profit. Just as Chapek was finally free of Iger’s guiding hand, Covid came and he was forced to close them.

Betting big on the money pit known as the “streaming wars” was also Iger’s play. Under Chapek, subscriber numbers have boomed, surpassing even those of Netflix in remarkably short order. It’s just the profits that have proved elusive.

But Chapek has also blundered into a series of avoidable disasters. There was the lawsuit from Scarlett Johansson over the release of Marvel’s Black Widow – an ugly row that Disney made worse with a spectacularly nasty statement in response to her asserting her contractual rights.

There was also the row with Florida governor Ron DeSantis over his “Don’t Say Gay” law, in which Disney managed to anger both sides in America’s culture war and prompted a staff revolt.

Price rises at Disney’s parks angered loyal customers, and then there was the problem of the messaging around them. After telling investors that profits would have been higher were it not for an “unfavourable attendance mix”, annual pass holders took to wearing T-shirts bearing the legend “unfavourables” in Disney’s famous font.

Then there was the abrupt firing of executive Peter Rice in June.

None of this would have mattered if Mickey Mouse’s steamship was still chugging along and its captain was whistling cheerfully while throwing cash into the laps of investors.

Chapek’s tone was cheerful enough. But investors started to get antsy over the fact that the cash wasn’t there.

Clearly Disney has issues that need fixing. It could get bloody. The company seems to have found a way to placate Dan Loeb’s Third Point, one of those activist investors that always turn up when big companies hit the skids – for now, at least.

Iger might be able to turn things around because he will be able to get away with things that Chapek couldn’t.

Disney’s stakeholders: Hollywood, its investors, staff and talent might grumble when he’s chopping here, pruning there, but they’ll accept things from him that from Chapek would have seemed beyond the pale.

It is notable that the shares made like Iron Man heading out for a Monday morning jaunt through the Manhattan skies in response to Iger’s reappointment.

Iger will be given some breathing space by Wall Street, even if at least some of what has happened can be traced back to decisions he made.

He is a star executive and stars can get away with things. But he’s also 71 and it won’t be too long before the question of Disney’s future leadership will have to be addressed once again.