Bob Chapek was the CEO that Disney fans loved to hate. Without public warning, his predecessor Bob Iger was reinstated as his replacement earlier tonight. Chapek took the reins as CEO in February of 2020, with Iger staying as Chairman of the Board through December of 2021.
Chapek’s original contract was for two years in the position. In early 2022, rumors spread that he would be replaced at the end of that contract. Interviewers asked Iger if he would consider returning. He answered that he had finished his time and that option was not on the table. Then the board renewed Chapek’s contract, and the rumors of his departure ended.
There were a few huge problems that drew the frustration of fans. They were compounded by a drastic decline in customer satisfaction through small changes. The big event that seems to have gotten the board to agree was the drop in stock price. The current price is 91.86 per share, down by 40% compared to both last year and pre-COVID levels. Here are some of the other problems under his reign.
- Refusal to pay Scarlet Johansen commensurate to her contract after a simultaneous theater and streaming release
- Taking his full salary pay after just a few months of salary cuts in the COVID-19 pandemic, even though many cast were unable to work
- Refusal to work with Iger while Iger was Chairman of the Board
- A poorly handled response to Florida’s Parental Rights in Education Act, leading to a political fight with the Florida government over the Reedy Creek Improvement District
- CFO comments about cutting company costs by decreasing restaurant portion sizes, and suggesting that it would help guest’s waistlines
- Ending the Disney store in favor of online shopping, and treating this as a positive change for parks and resorts fans
- Continually cutting costs and not providing proper investment
- Poor negotiations with labor unions
- Nickel-and-diming theme park customers by increasing prices at every opportunity and adding upcharges to services that were previously included with park admission
- Marketing Genie+ as a way to optimize a guest’s day in the theme parks, while actually using the algorithm to optimize crowd control and guest spending
- Using the park reservation system strictly against Annual Pass holders in a way that felt like a “bait and switch” to add more blackout days
- Cheap investment into park attractions that focused more on merchandise sales than theme park experience
- Over-complicating customer service to the point that guests can’t understand the process for purchasing a park ticket and entering a theme park.
Compare these issues over three years to Bob Iger’s accomplishments, which include:
- Acquisition of Pixar, Marvel, Lucasfilm, and Fox, creating an enormous content library with power house movie studios
- Integrating these new brands into the Disney product line, including parks, movies, and merchandise
- Investing in quality attractions at theme parks that created great experiences for riders of all ages (Cars Land, Pandora, and New Fantasyland)
- Increasing the stock price by a factor of 5, or an average of 10% per year, including only a brief price drop (about 6 months) during the Great Recession of 2008
- Developing D23, the Official Fan Club and primary venue for major announcements for the company
- Attracting top talent to work in a creative industry, allowing their ideas to thrive.
The different approach to management styles is clear, and Chapek’s style was a poor match for the Walt Disney Company. According to the statement from Disney, Bob Iger will take the role for two years. He’ll spend that time steadying the ship and selecting another replacement. Over the next few days, we’ll update you with our thoughts on how Iger will implement changes to undue the damage Chapek has caused. There is sure to be change that will make the guest experience better.