In a plot twist, Disney is bringing back CEO Bob Iger
Two years ago, Bob Iger left Disney after being chief for 15 years but he’s now back at the helm of the entertainment giant.
The 71-year-old, who spent four decades at the firm, is returning as Disney’s CEO effective immediately, the company said in a Nov. 20 press release. He will serve for two years “with a mandate from the Board 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.”
Bob Chapek, who succeeded Iger in 2020, left immediately.
It was a given that Iger would be a tough act to follow but Chapek made his own leadership blunders including a bungled reorganization, an ugly public spat over Black Widow star Scarlett Johansson’s streaming remuneration, and botching his response to Florida’s controversial “Don’t Say Gay” bill, which restricted instruction on gender identity and sexual orientation in classrooms. (Iger did not explicitly call him out on the latter, but did say it’s a matter of “right or wrong” and “you have to take a stand.”)
Meanwhile, the business has been struggling to grow. In the quarter ended Oct. 1, 2022, Disney’s streaming business lost $1.5 billion. The company’s shares have plummeted over 40% so far this year.
Disney’s putting its faith in Iger turning things around, like Steve Jobs did for Apple in the ‘90s. The hope is that his experience coupled with Iger’s familiarity with the company and its staff—“He is greatly admired by Disney employees worldwide,” according to Susan Arnold, chairman of the Board—should help him steer the entertainment ship out of testy waters.
Brief timeline of Bob Iger’s previous, long stint as Disney CEO
👑 March 2005: Iger is appointed CEO
🤝 May 2006: Iger makes his first game-changing acquisition. He buys computer animation studio Pixar, which was owned by Apple CEO Steve Jobs, for $7.4 billion. Fifteen years later, he’ll call it his “proudest decision” when Pixar has minted over $11 billion at the box office for Disney.
🇨🇳 Nov. 2009: After working on the vision for a decade, Iger gets the greenlight from the Chinese government to open a new Disney theme park in Shanghai, China.
🤝 Dec. 2009: Disney completes its $4 billion acquisition of comic book company Marvel and its “treasure trove of over 5,000 characters.” Only two of the 30 Marvel Cinematic Universe (MCU) movies—Ironman and The Incredible Hulk—had released at this time. By 2022, Marvel will earn over $22 billion for Disney.
🎡 June 2012: Iger brings new worlds related to intellectual property Disney owns to its themeparks, starting with “Cars Land” in California based on Pixar’s Cars
🤝 Dec. 2012: Disney completes its $4 billion acquisition of Lucas films. The four Star Wars films that release between 2015 and 2018 rake in more than $4.8 billion.
🇨🇳 June 2016: Shanghai Disneyland opens. The nearly 1,000-acre theme park is the sixth in the world and first in the mainland. It attracts over 11 million visitors in the years before the 2020 Covid outbreak.
🤝 March 2019: Disney acquires film and TV studio 21st Century Fox (2019) for a whopping $71 billion, bringing major properties like Avatar, Alien, The Simpsons, X-Men, Planet of the Apes, and more, to Disney.
🎡 May 2017: Based on Avatar, a world called Pandora opens at Disney World Resort, Florida. The company spent half a billion dollars to build out the 12-acre area with themes attractions.
🎡 May 2019: Disney open Star Wars Galaxy’s edge in California and Florida.
💻 May 2019: Disney takes full control of streaming service Hulu
💻 November 2019: Iger launches the company’s own streaming platform Disney+
Bob Iger’s departure and return, in Bob Iger’s words
Bob Iger during Disney’s investor day in April 2019:
“I’m expecting my contract to expire at the end of 2021. And I was going to say ‘and this time I mean it,’ but I’ve said it before. I’ve been CEO since October of 2005 and as I’ve said many times, there’s a time for everything and 2021 will be the time for me to finally step down.”
Bob Iger on Nov. 20, 2022.
“I am extremely optimistic for the future of this great company and thrilled to be asked by the Board to return as its CEO. Disney and its incomparable brands and franchises hold a special place in the hearts of so many people around the globe—most especially in the hearts of our employees, whose dedication to this company and its mission is an inspiration. I am deeply honored to be asked to again lead this remarkable team, with a clear mission focused on creative excellence to inspire generations through unrivaled, bold storytelling.”
One big number: Disney’s growth under Bob Iger
During Iger’s tenure, Disney’s market cap grew 400%, from $48.5 billion to $240 billion.
Of Bob Iger and boomerang CEOs
The boomerang CEO isn’t a new phenomenon. The most notable example is when, in 1996, an ailing Apple brought co-founder Steve Jobs back a decade after his 1985 ousting for locking horns with then-CEO John Sculley and the board. Jobs turned the company around, breaking away silos in the management systems, innovating and releasing sough-after tech like the towerless iMac, the popular iPhone, and the iPad before his 2011 death.
Starbucks’ Howard Schultz, who returned to the company after an eight-year hiatus in 2008, is another corporate success story that increased the company’s share price to triple during this second tenure.
But researchers warn that Jobs and Schultz are exceptions to the rule.
“Although some of the most well-known examples of boomerang CEOs have been successful, these cases appear to be outliers and not central tendencies,” according to a study comparing the tenures of boomerang CEOs and non-boomerang CEOs at listed companies between 1992 and 2017. “Instead, our data indicate that boomerang CEOs significantly underperform their counterparts suggesting that what may appear to be a smart choice in precept (i.e., bring back prior CEO) may be a poor choice in practice.”
Typically, returns for the company and its investors tend to suffer. At several other companies such as Procter & Gamble, Dell, Yahoo, and Enron, bringing back an older CEO did not breathe new life into the firms. And the clock is ticking for Iger, considering he only has two years on hand.