Tuesday afternoon, longtime Disney CEO Bob Iger, announced suddenly that he was stepping down after 15 years, effective immediately. Iger will still serve as chairman, but his replacement, Bob Chapek, has gone from an insider figure to an abruptly prominent leading man. Previously chairman of Disney parks, experiences, and products, Chapek has been working toward this moment for a long time, even if most people outside the company have never heard his name.

The choice came as a shock to Wall Street analysts who assumed Kevin Mayer, head of Disney direct-to-consumer division, was a shoo-in. But while Mayer has become the face of Disney’s most important division, Chapek, who oversaw the launch of Disney’s new Galaxy’s Edge parks, checks all the boxes the Disney board wants in an executive who will oversee the entire company’s day-to-day operations.

“He’s going to commit with both feet and jump into the deep end,” one former Disney executive, who worked with Iger and Chapek and asked to remain anonymous, told The Verge.

Crucially, Iger will stay on as executive chairman, reporting directly and exclusively to the board of directors, according to a Securities and Exchange Commission filing. That means Iger is still Chapek’s boss; the only difference is that Iger won’t oversee the operational side of the business. With Chapek in as CEO, Iger told investors he will “spend as much time as possible with the creative side of Disney’s businesses, noting those areas will become “our biggest priority in 2021.” Iger will guide Chapek through the succession transition, getting him to a point where he can take over every aspect of the job when Iger steps down as executive chairman at the end of 2021.

Seen in that light, Chapek makes more sense as a successor. After years of high-risk bets, Disney is in a remarkably stable position, with little changing materially over the next few years. A caretaker executive like Chapek can carry out Iger’s vision for Disney in the years to come, while Iger continues to work with various heads in creative departments on the future of Disney’s content.

“If he’s sticking around, it could just be that he’s the trainer,” the former Disney executive said. “The Sith apprentice and Sith Lord. He’ll be holding Chapek’s hand. He’s going to take a position to still be deeply entwined with the company. It’s still Bob’s show.”

To understand why Chapek is the obvious choice to replace Iger, as former Disney executives told The Verge, it requires a little history lesson. In 2009, Chapek was named president of distribution for Walt Disney Studios, putting him in charge of distribution for Disney’s content theatrically, home entertainment, and other mediums like digital releases. During his time in the home entertainment division, Chapek was crucial in Disney’s distribution deals with digital platforms like Apple’s iTunes.

Iger was especially interested in those details because of the changing landscape of release windows (meaning when and where a movie can go after its theatrical release). The shift in technology made partnerships with companies like Apple and platforms like iTunes crucial to the company’s growth.

Those distribution deals were Disney’s early foray into the direct-to-consumer market — a sector Iger sees as the future. As then-chairman of Walt Disney Studios Rich Ross said in a 2009 press release, “Bob Chapek has been at the forefront of new technology for many years, and has the expertise and track record to guide and consolidate our future distribution efforts.”

Chapek excelled, helping to develop some of Disney’s most popular straight-to-video franchises, including the direct-to-video Airbud offshoot series, Buddies. One former executive told The Verge that Chapek wanted to continue Air Bud’s popularity, and “the Buddies franchise was developed to be a direct-to-DVD series.” The Buddies series was a low-budget, seemingly random slate of movies for Disney (although the company has a long history of making movies starring adorable pups), but it showcased an IP approach that now dominates Disney’s overall strategy.

Chapek continued to rise through Disney’s ranks. The next step in Chapek’s journey was taking over for Andy Mooney, the former chairman of consumer products at Disney, who stepped down in 2011. Tensions grew between Mooney and Iger, according to the executive, and Chapek was brought in to fix the consumer division. Under Iger’s guidance, Chapek started to reshape Disney into the company it’s known as today. He was directly responsible for developing a brand- and franchise-driven strategy for Disney’s consumer division — similar to what he did with home entertainment and distribution. Chapek’s leadership came at a time when Disney was moving rapidly into a franchise-first strategy.

“They bring in Bob Chapek to come and implement the Iger agenda,” the executive told The Verge. “Bob’s vision was putting the strategic interests of the company ahead of individual divisions. Consumer products would support the creative outlet of the studio even if the division took a hit because that benefited the Walt Disney Corporation. Chapek and Iger believed that executives are all company men and women, and they should support the entire company’s agendas and priorities.”

In essence, Chapek was cleaning house. Chapek “did what Bob wanted him to do,” the executive said, noting that Chapek proved he could “be loyal, be effective, and wasn’t afraid of making tough decisions.”

By the time Chapek was promoted to chairman of Walt Disney Parks and Resorts in 2015, he was in Iger’s good graces. (He was made head of parks, experiences, and product division when the groups were combined in 2018.) It was a transitional moment for Disney, as the company moved to launch its most ambitious project yet: Shanghai Disney Resort. Disney was spending $5.5 billion on building the park in a country it saw as key in its quest for even bigger global expansion.

Iger told investors in 2018 that Disney was planning an expansion to meet the “strong and growing demand for high-quality themed entertainment.” At the head of it all was Chapek who was with Iger when Shanghai Disney launched. Iger said he formed a bond with Chapek while dealing with Shanghai launching and problems back in the United States.

“The bond you form in high-stress moments like this, when you’re sharing information that you can’t discuss with anyone else, is a powerful one,” Iger wrote in his book, The Ride of a Lifetime.

By 2020, Shanghai Disney became one of Disney’s most successful parks, generating $1 billion in revenue and approximately $50 million in operating profit annually for the company. It was a key moment for Iger and the company’s development in China, as Iger noted in his recent book. “I’d been CEO of the Walt Disney Company for eleven years at that point, and my plan was to open Shanghai and then retire,” Iger says in the opening of his book. “It has been a thrilling run, and the creation of this park was the biggest accomplishment of my career.”

Chapek’s track record on top of his work with the Shanghai park opening proved to be the most important criterion for taking over as CEO — his knowledge of every Disney division. “He’s deeply integrated in Disney longterm, and has the track record,” the executive said. “He has a wide breadth of experience. When you think about it on the creative side of things — home entertainment, every single movie and TV show, he understands it. Then he went over to consumer products to clean house on behalf of Bob Iger. When they needed someone tough to rein in the theme parks, Chapek was the guy chosen. He’s always been Iger’s guy.”

The one area where Chapek has less experience is the same area in which Iger sees as the future of Disney’s business: streaming. Disney’s streaming sector — referred to as direct-to-consumer, which houses ESPN Plus, Hulu, Disney Plus, and HotStar in India — is Disney’s flashiest sector. It’s arguably Disney’s most important in the ever-changing digital landscape. Investors ask about it all the time, attention is given to it at every event, and as the streaming wars heat up, all eyes are on Kevin Mayer.

“It feels absolutely vital for us to do this,” Iger told Bloomberg ahead of Disney Plus’ launch in November. “This is, no question about it, the future of media.”

Many industry insiders and employees at Disney thought Mayer was the obvious choice for CEO. Some were shocked when Chapek was announced, with one employee in the direct-to-consumer division telling The Verge they’d “immediately quit if Kevin Mayer leaves.” Mayer, who the former Disney executive credits as “the best person Disney’s ever had on the strategy side,” hasn’t commented publicly on Chapek’s promotion.

So why didn’t Iger pick Mayer as CEO? The simplest answer is that, while he’s an expert in Disney’s most high-profile sector, he doesn’t have much experience with the rest of the company. “Kevin just didn’t have the benefit or the time to get exposed access into those other businesses,” the executive said. “And that’s crucial when Disney is grooming the next CEO.”

Mayer still has one of the most important jobs in the company. Prior to heading up Disney’s direct-to-consumer and international (DTCI) division (which launched in 2018 after Disney acquired a majority stake in BAMTech and started its Hulu takeover), Mayer served as senior executive vice president and chief strategy officer. Mayer helped orchestrate four of Disney’s key acquisitions alongside Iger: Pixar, Marvel Entertainment, Lucasfilm, and BAMTech, and he was instrumental in the purchase of 21st Century Fox.

But while Disney’s streaming strategy has been wildly successful, it’s all the more reason to keep Mayer in the same role. As Iger told investors on the call yesterday afternoon, “with the asset base in place, and our strategy essentially deployed,” Mayer already has everything he needs to make Disney’s direct-to-consumer business shine. He’s arguably the only one who can do it. Putting him in charge of the whole company would just upset the balance.

The Disney empire that exists today simply couldn’t exist without Mayer and Iger working together to buy the studios and companies they did. The question remains: does Disney need a new Iger right now — when he’s still committed to developing content at the company for the next two years — or someone who can execute on his division, working alongside Mayer? As Iger told The New York Times after his announcement, “I’m not going to suddenly be working three days a week. My new role is a full-time job.”

“No one will ever replace Iger,” the former Disney executive told The Verge. “Think of the parallel between Steve Jobs and Tim Cook. Iger will probably be the most incredible IP person in history. Does Disney need a new IP person? Or does it need a person who can take those IP assets and then administer and manage them? That’s where Chapek comes in.”

Disney’s history with CEO transitions isn’t exactly tidy; Iger’s own promotion in 2005 was overshadowed by the drama that plagued former CEO Michael Eisner for years before he was ousted in 2004. The prior heir apparent to Iger, former chief operating officer Tom Staggs, left the company in 2016 after years of being groomed for the position after suddenly being told by Iger that the board didn’t have confidence in his abilities to lead the company.

But even by that standard, Iger’s announcement is strange. As former Amazon Studios strategist and analyst Matthew Ball tweeted, Iger is 14 months into a 36-month extension, the succession was immediate, the news dropped on a Tuesday afternoon, and it comes months after Iger’s press tour — a strange move for a CEO who’s planning to step down. The former Disney executive told The Verge that the announcement read as “very surprising, and more than a little suspicious.” People inside Disney are already questioning if there’s more news to come.

At the same time, the company has never been stronger. Disney had a record-breaking 2019, garnering more than $13 billion at the box office and producing eight of the 10 top-grossing films in the United States; Disney Plus is off to a rousing start with more than 28 million subscribers in just over three months; and its theme park division continues to generate profit.

With that success in place, Chapek and Iger start to look like a classic pairing of a creative personality with a traditional business type. That kind of match has a long history for Disney, starting with Walt and Roy Disney in the company’s beginnings and continuing with Eisner and former president and chief operating officer Frank Wells in the ‘80s and early ‘90s. Chapek and Iger might be the third pair of executives to carry on that tradition.

Plus, don’t forget: Iger isn’t going anywhere. His story continues.


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