Robert Iger has extended his reign at The Walt Disney Co through 2026, as finding an heir continues to be difficult and questions mount about the viability of the company’s vaunted movie studios and theme parks.
Disney said Wednesday that Iger, 72, will remain CEO for two years beyond his previously announced re-retirement date. Iger reluctantly ended his first run at Disney in 2021, handing the company’s top job to Bob Chapek, a former theme park executive. Chapek was fired in November, and Iger made a triumphant return as CEO.
At the time, Disney said Iger had been asked “to set the strategic direction for renewed growth and to work closely with the board in developing a successor to lead the company at the completion of his term.” Iger repeatedly said that he would retire for good when his contract was up at the end of 2024.
“My plan is to stay here for two years,” Iger told CNBC in November. “That was my agreement with the board, and that is my preference.”
But many people in Hollywood were skeptical. During his first tenure as CEO, from 2005 to 2020, Iger delayed his departure at least three times. (He continued as Disney’s executive chair for a year after stepping down as CEO.)
“Because I want to ensure Disney is strongly positioned when my successor takes the helm, I have agreed to the board’s request to remain CEO for an additional two years,” Iger said in a statement Wednesday.
“The importance of the succession process cannot be overstated," he added, “and as the board continues to evaluate a highly qualified slate of internal and external candidates, I remain intensely focused on a successful transition.”
In the months since Iger has been back at Disney, he has moved quickly to cut costs — about $5.5 billion, in part by eliminating 7,000 jobs, including at Pixar and ESPN — and push Disney’s streaming operation toward profitability. He also won a proxy battle with activist investor Nelson Peltz, one turning in part on Disney’s poor track record of succession planning. Peltz declined to comment Wednesday.
But a successor has yet to be identified. The board has been looking at candidates inside and outside the company, Disney has said. Iger brought a trio of executives with him to this week’s Allen & Co. Sun Valley media conference, the annual “billionaires’ summer camp,” and all are viewed as succession possibilities: Dana Walden, a co-chair of Disney Entertainment; her counterpart, Alan Bergman; and Josh D’Amaro, chair of Disney Parks, Experiences and Products.
A spokesperson for Iger said he was unavailable for an interview.
Disney shares have been trading at about $90, down 3 per cent from a year ago and 54 per cent from their peak in March 2021. Following the news of Iger’s extension, shares remained largely flat in after-hours trading.
The challenge is that, in addition to succession, Disney is dealing with problems on almost every front, including new questions about its movie studios, given disappointing results at the summer box office for Elemental, Indiana Jones and the Dial of Destiny and, to a lesser extent, The Little Mermaid. Disney has been maneuvering to buy full control of Hulu, but such a purchase would be expensive, and Disney is loaded with roughly $45 billion in debt, partly because of the pandemic.
In the meantime, Disney’s earnings engine for the past 30 years — traditional television, including ESPN — has become a shadow of its former self, the result of cord cutting, advertising weakness and rising sports programming costs. Iger is betting that streaming services will return the company to growth. But Disney+ has been shedding subscribers, and a broader streaming division remains unprofitable, losing nearly $2 billion since the start of the fiscal year.
Disney is also contending with a lingering screenwriters’ strike; and contract negotiations between studios and SAG-AFTRA, the guild that represents about 160,000 actors, have been going poorly and could result in a strike as early as Thursday.
Unlike most of its rival media conglomerates, Disney can rely on its theme park business for profit and growth — unless a recession hits. Lately, attendance at the company’s largest property, Disney World in Florida, has appeared to weaken as part of a broader decline in tourism to Florida. (Universal Studios has also seen softness, according to analysts.)
Disney has been embroiled in a public standoff with Gov. Ron DeSantis of Florida over control of government services at Disney World. Dueling lawsuits are making their way through federal and state courts, and DeSantis has been harshly critical of Disney as a “woke” corporation while campaigning for president.
In an email to employees Wednesday, Iger acknowledged the company’s many challenges.
“There is more to accomplish before this transformative work is complete, and I am committed to seeing this through,” he said. “As I’ve said many times since we began this important transformation of the company, our progress will not be linear as we continue navigating a difficult economic environment and the tectonic shifts occurring in our industry.”