December 1, 2022

Former Disney CEO Bob Iger reappointed to role in surprise decision | The Walt Disney Company

Disney has rehired Bob Iger as its chief executive after the entertainment company ousted his handpicked Bob Sabek after less than three years on the job.

During Iker’s acclaimed 15-year reign, Disney A A series of major acquisitionsincluding the Marvel film franchise, Pixar Animation Studios and the Star Wars film franchise.

He Retired as Chief Executive in 2020, who delayed his exit several times to guide the company through the early stages of the coronavirus pandemic. He was replaced by Sabek, who previously ran its theme parks division but remained executive chairman until the end of last year.

Iger is returning to the CEO role effective immediately and will serve two years, Disney said in a statement late Sunday. The company highlighted a five-fold increase in market value under his leadership, saying, “He has the mandate to set the strategic direction for renewed growth.”

Michael Antonelli, market strategist at Baird, a US asset manager, said Iger’s return was “probably the most important part of the corporate upsurge. [Steve] “Jobs went back to Apple when Wall Street opened on Monday” and the news sent Disney shares up more than 8% – to nearly $14bn.

“We applaud Disney’s team for boldly making this transition,” said Michael Nathanson, senior analyst at MoffettNathanson. “We have never hidden our admiration for Mr. Iger and his work in building Disney into a global powerhouse.”

Chabeck oversaw a difficult period for Disney, disrupted by the pandemic — this It forced theme parks to close – following concerns about the profitability of its streaming service Disney+. The platform competes in a crowded field and has spent billions of dollars creating new content Competes with rivals Netflix and Amazon Prime Video. While Disney+ has rapidly grown subscriber numbers, it has come at the cost of steep operating losses.

Disney has also faced pressure in Florida, where its Walt Disney World theme parks are located, over its public opposition to the state’s “don’t tell gay” laws that ban classroom discussion of sexual orientation and gender identity in certain grades.

The company publicly opposed the laws, Viewed as oppressive by many activists and teachersThat prompted the right-wing Florida governor, Ron DeSantis, to try Remove its privileges In the state.

The company’s market value has fallen more than 40% in 2022, worse than the 17% decline in the S&P 500 index of large U.S. companies.

News of Iger’s return prompted widely respected MoffettNathanson to upgrade its target stock price for Disney to $120 — which had been trading below $100 — its first upgrade on the stock since early 2020.

Susan Arnold, president of Disney, said: “We thank Bob Sabek for his long career of service to Disney, including guiding the company through the unprecedented challenges of the pandemic. As Disney embarks on a critical period of industry transformation, the Board has decided that Bob Iger is uniquely positioned to lead the company through this important period.

Iger said: “I am very optimistic about the future of this great company and am delighted to have been asked by the board to return as its CEO.” Disney did not release Chapek’s statement.

Disney’s share price doubled to $1.5bn in losses in its streaming business in the quarter to October 1, just weeks after it reported a rare miss on revenue and profits.

Disney has spent about $9bn to date on loss-making Disney+, and $30bn annually on its television and streaming businesses, including ESPN and ABC, from Hollywood blockbusters and big-budget TV shows to NFL football.

The company said its streaming business has reached “peak losses” and Disney+ is on track to turn a profit in its 2024 fiscal year, by which time it will be bigger than Netflix, although it has scaled back subscriber expectations of 215m to 245m. Worldwide.

To achieve this goal, Disney is pushing price increases of up to 38% in the U.S., with regions including Europe likely to increase in the future, and an ad-supported subscription tier will begin in the U.S. on December 8.

Analysts expect Iger to implement cuts in areas including content costs at Disney+ and pay-TV sports network ESPN.