Disney (DIS) and CEO Bob Iger may be on a roll after winning a proxy fight against activist investor Nelson Peltz last week. But the company's board now faces an even more high-stakes challenge: figuring out who will be the entertainment giant's next leader.
“That's the million-dollar question,” Third Bridge analyst Jamie Lumley told Yahoo Finance. “Wall Street wants to resolve this issue as quickly as possible.” [but] They don't want a repeat of Bob Chapek's regime change. ”
Mr. Chapek, who previously headed Disney's parks division, was handpicked by Mr. Iger to become CEO in 2020. But he was ousted from his post in November 2022, less than three years into his term, marred by political strife and A-list talent issues. , and a controversial reorganization.
A replacement could be named as early as this year or near the end of Iger's contract, which expires in December 2026.
“I think by 2025, we'll start to see something about a likely successor, even if it's not explicitly named,” Morningstar senior equity analyst Matthew Dolgin told Yahoo Finance. ” he said. ”[If not]If that happens, the market will start to get a little nervous. ”
Who is running?
Disney's succession planning committee, made up of Chairman Mark Parker and board members Calvin MacDonald, Mary Barra and James Gorman, previously promised shareholders that they would be “best-in-class, focused, diligent and thorough.” We have engaged in and are implementing a comprehensive succession planning process.” . ”
In a letter sent to shareholders on March 22, the committee confirmed that it will meet seven times in 2023 and continue to meet regularly until the succession process is complete. Disney said the committee is currently considering internal candidates as well as potential external candidates.
There are rumors that internal names such as Disney Entertainment co-chairman Dana Walden and Alan Bergman have been floated. Josh D'Amaro, Disney's Head of Parks and Experiences. And ESPN Chairman Jimmy Pitaro could be the next candidate.
Walden joined Disney in 2019 when Disney acquired 21st Century Fox. She currently oversees Disney's television studios along with ABC Network, ABC News, Freeform, FX, National Geographic, Hulu, and Hulu Originals. She is also responsible for Disney's children and youth programs.
Meanwhile, Bergman will lead Disney's film and studio division, which includes Disney Animation, Pixar, Marvel, Lucasfilm, 20th Century Studios and Searchlight Pictures. He joined Disney in his 1996 year and has held senior management positions at Disney since 2001.
Like Bergman, D'Amaro is also a Disney veteran. He joined his company in 1998 to work at the Disneyland Resort. He took the helm of the parks and experiences division in 2020 and has since navigated a tumultuous period, including a high-profile feud with Florida Gov. Ron DeSantis and a pandemic that completely shut down parks operations. Ta.
Finally, Mr. Pitaro led Disney's consumer products and interactive media division before leading ESPN in 2018. He was responsible for securing an 11-year media rights agreement with the NFL, and also secured other significant live programming rights during his tenure. He first joined Disney in his 2010 year, and prior to joining the House of Mouse, he served as head of media at Yahoo.
Other possibilities include former executives Kevin Mayer and Tom Staggs, who left the company in 2020 after Mr. Iger selected Mr. Chapek as CEO. Mr. Staggs previously served as Disney's chief operating officer, chief financial officer and head of the parks division. Meyer was responsible for strategy and development at the company, where he oversaw the launch of both Disney+ and ESPN+.
Meyer and Staggs currently run Blackstone-backed entertainment startup Candle Media, before returning as strategic advisors during ESPN's streaming transition.
“It’s a very wide range of work.”
Wall Street analysts say Disney's future CEO is unlikely to be an outsider. Mr. Mayer and Mr. Staggs could be considered Disney “insiders” given their previous work for the company (and their respective relationships with Mr. Iger).
“It's certainly likely that Disney will choose one of these internal candidates,” Lumley said. “Disney culture is something you hear repeated often as one of the biggest factors for a CEO's success. He's just someone who really understands how Disney works as an organization.” .”
Analysts speculate that someone will likely come from the company's entertainment and media division. The company's main challenge is figuring out how to grow profits as more consumers cut the cable cord.
“The biggest issue facing this company, like other traditional media companies, is how to navigate the evolution from the traditional TV business model to streaming,” Dolgin said. . “Nobody, including Bob Iger, has successfully navigated this. This is an existential issue for many companies.”
Disney's immediate priority is to make its streaming business profitable and cut costs by $7.5 billion annually, but as the streaming landscape becomes increasingly fragmented, the Disney of the future will look different. there is a possibility.
“Investing in profitable growth will be the next CEO's North Star,” Lumley said, emphasizing that Iger's successor will be tasked with implementing these initiatives. “At that point, streaming will no longer be the battle we've been fighting for the past few years. It's going to be about how to make sure streaming doesn't become a loss leader and maximize margins as much as possible.”
Still, Moffett Nathanson analyst Michael Nathanson said the specific details of a candidate's resume may not be that important given Disney's vast business.
“They're just looking for the best leader to take this company forward,” he said. “This is a very broad job. I don't think he's the only type of person for this job. It's going to take time to identify the right person.”
And if not, there's another potential option: Iger could extend his contract again.
“At some point, it's not going to be handled well in the market,” Dolgin said. “But it's a possibility.”
alexandra canal I'm a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, Please email alexandra.canal@yahoofinance.com.
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