Less than a year after his retirement, Bob Iger is making a surprise comeback to Walt Disney (NYSE: DIS) Co. as CEO. This goes along with the entertainment company’s plans to boost investor confidence and profits at its streaming media arm.
Iger, who stepped down as CEO last year after serving for 15 years, has agreed to continue in that role for two more years, Disney announced in a statement late on Sunday. He will take over for Bob Chapek, who became CEO of Disney in February 2020, right after the COVID-19 virus spread around the world and closed parks and limited travel.
Disney’s shares have dropped more than 40% so far this year, underperforming the overall Dow Jones Industrial Average’s decline of just under 7%.
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The statement from chairwoman Susan Arnold reads, “The Board has determined that Bob Iger is ideally positioned to lead the company through this important era as Disney embarks on an increasingly complicated period of industry upheaval.”
This month, Disney dismayed investors with a financial report that revealed growing losses at its streaming media division, which includes Disney+. The day after fourth-quarter earnings were announced, shares fell to a 20-year low.
More than doubling its deficit from the prior year, the streaming industry lost roughly $1.5 billion in the quarter, overshadowing subscriber growth. Since its inception in 2019, the company, which competes with Netflix Inc (NASDAQ:NFLX), among others, has yet to turn a profit.Disney has stated that it anticipates Disney+ turning a profit in fiscal year 2024.
Iger wrote in a memo to staff members seen by Reuters: “I am an optimist, and if I learned one thing from my years at Disney, it is that even in the face of uncertainty—perhaps especially in the face of uncertainty—our employees and Cast Members do the impossible.”
When Iger said he was leaving the company, Disney was leading the fight against Netflix’s competitor in the streaming wars.Disney increased its market capitalization fivefold during his leadership by making several significant acquisitions, such as Pixar Animation Studios, Marvel Entertainment, and 21st Century Fox.
Iger’s job during his second term is to “put Disney on a path to renewed development” and work with the board to find a replacement, the company said.
Shares of Disney did not trade after hours. The stock increased by 0.38% to close at $91.80 on Friday.
Employees were surprised by the leadership move, according to two corporate sources.
Outgoing In order to smooth the transition, Iger continued on at Disney into 2021, and Chapek succeeded him as CEO in February 2020. In June, the board had just extended Chapek’s contract.
Chapek had to deal with pandemic-related manufacturing halts and theme park closures during his brief term.
He got into a fight with the staff because he wouldn’t speak out against a law in Florida that would make it harder to talk about sexual orientation and gender identity in the classroom.
Scarlett Johansson, the star of Marvel’s “Black Widow,” and Chapek engaged in a highly publicized legal dispute in 2021 over Disney’s choice to release the film in theaters and online at the same time. The disagreement about remuneration led to a lawsuit, which was quickly resolved.
Daniel Loeb, an activist investor, started pressuring Disney in August to make changes, such as spinning off the ESPN sports network and speeding up the planned acquisition of Hulu from minority owner Comcast Corp. (NASDAQ: CMCSA). Later, the investor stated that he now understood ESPN’s significance to Disney.
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Iger’s return to Disney was revealed shortly after Reed Hastings, a co-founder of Netflix, tweeted: “Ugh. I had been anticipating Iger’s presidential bid. “He is incredible.”
