Sharon Waxman On the Business of Entertainment
The founder and editor of TheWrap’s take on life on the left coast, high culture, low culture and the business of entertainment and media. Waxman writes frequently on the inside doings of Hollywood, and is is also the author of two books, Rebels on the Back Lot and Loot
The missteps that led Disney CEO Bob Chapek to apologize to his employees on Friday and publicly withdraw from political contributions to in Florida over anti-LGBTQ legislation have both Hollywood and Disney insiders wondering whether his top-down leadership style has put the new leader out of touch with the vast array of cultural sensibilities in his business empire.
“It’s 100% a self-inflicted wound,” said one former top Disney executive who declined to be identified but confessed to being “angry” at how the issue played out. Chapek is “missing everything – forget about whether he cares about the issue. He doesn’t understand all his constituencies, the company he supposedly runs.”
A second former Disney executive observed that Chapek seems to want to dictate decisions rather than listen and then respond. “Running Disney is like running a small nation state,” this executive said. “It requires so many different skill sets independent of running a successful entertainment multinational, including complicated politics and international diplomacy.”
An individual with knowledge of former CEO Bob Iger’s thinking said he was sad and dismayed at how the company’s response played out, and regarded the issue as one of human rights rather than politics.
What’s noteworthy is how Chapek — who has been CEO for slightly more than two years (with Iger as chairman for much of 2020) — appears to be disconnected from some of Disney’s core values, the individual said. “This is deeply personal and emotional,” the second former exec said, noting that Chapek “has revealed that he is out of touch and out of step with many employees inside the company and many artists and creatives who work with the company.”
The “Don’t Say Gay” mess spun quickly into a PR disaster for Disney despite its efforts to keep the issue under the radar – and under control. Disney issued statements on March 4 and March 7 expressing support for its own LGBTQ community as internal protests arose over so-called “Don’t Say Gay” legislation that bars “classroom discussion about sexual orientation or gender identity” in Florida — and over Disney’s donations to the Florida politicians who backed it.
Only a week ago, Chapek insisted on staying out of the public fray of politics, noting in a memo to his employees: “Corporate statements do very little to change outcomes or minds. Instead, they are often weaponized by one side or the other to further divide and inflame.”
That didn’t go over well with Disney’s large and vocal LGBTQ community – both executives within the company as well as outside talent who frequently work with the studio – who made numerous public statements expressing their dismay over the company’s lack of response. Some also contradicted Chapek’s claims, noting that lobbying from then-CEO Bob Iger in 2016 helped persuade then-Georgia Governor Nathan Deal to veto a bill that would have allowed faith-based organizations to refuse services to LGBTQ+ individuals that might violate their religious beliefs.
And it did not help Chapek’s case that Iger — who exited as chairman of the board last December — tweeted his own opposition to the legislation.
Chapek’s initial explanation for trying to stay out of the fray, along with his $5 million check to the LGBTQ advocacy group Human Rights Campaign – only seemed to frustrate employees more. And the nonprofit threw the check back in his face. By Friday, Chapek finally issued a heartfelt apology. “I let you down,” he wrote. “I am sorry.”
Many described the apology as sincere, but they also pointed out that it came too late, under too much internal pressure and — most of all — after the bill had passed last Tuesday. (And Florida’s Republican Governor, Ron DeSantis, not only signaled he would sign the bill but mocked “Woke Disney” for its belated lobbying effort.)
Disney insiders explained that the government affairs team had been trying to avoid open warfare over cultural politics by working diligently behind the scenes to modify the bill’s language so it addressed sexual activity and not sexual and gender orientation. And they insisted that Disney stood on its record of support for the LGBTQ community. “Many companies give lip service to issues and no action,” one Disney insider said. “We were in action from the outset, but reluctant to speak about it for fear it would undermine our efforts to stop the bill by igniting a partisan firestorm.”
However, according to the Orlando Sentinel, Disney is not registered to lobby on the “Don’t Say Gay” bill, according to legislative records, although the company has deployed lobbyists on other Tallahassee legislation, such as a bill to expand tax breaks for TV or streaming projects.
In any event, Disney’s efforts achieved the opposite result. Trenchant Disney critic and family member Abigail Disney tweeted: “The worst kind of PR bungle is the one where everyone ends up angry at you. Chapek tried to make nice with conservatives, then he tried to thread the needle with LGBTQ+ folks which only aggravated them because it was so patently insincere so now there’s a genuine apology which gets him precisely the reaction he was trying to avoid: being dismissed by the governor whose ass he was kissing ad (sic) “woke.’”
Some of this debacle is simply the new normal for companies across America, where anger can spike quickly and publicly on social media over what used to be private grievances.
But the response also led Disney observers to wonder whether Chapek is equipped to lead the global entertainment behemoth at a time of intense cultural polarization.
According to two insiders, Chapek relies on a small group of advisers to make decisions, including chief of staff Arthur Bochner, a former Republican Party operative and communications official for George W. Bush; chairman of Disney Media and Entertainment Distribution Kareem Daniel; and Geoff Morrell, Disney’s new Chief Corporate Affairs Officer, an ABC News correspondent who served as spokesman for the Pentagon under George W. Bush and Barack Obama and later for British Petroleum.
A Disney insider noted that Chapek did consult with other relevant executives about this issue, including in human resources, legal, as well as diversity and inclusion.
Chapek’s small council approach to leading DIsney is quite different from Iger’s. During his 15 years running the company, Iger was consultative at all levels of the company even as he kept his hand in everything from entry-level operations to high-flying business deals to white-glove talent relationships.
By contrast, Chapek, as one of the former executives pointed out, “is command and control.”
This trait was evident in the other major PR disaster under Chapek’s leadership, when the company publicly clashed with “Black Widow” star Scarlett Johannson last summer after the studio moved the big-budget Marvel Studios release from a theatrical release to a Disney+ streaming exclusive — without negotiating a make-good for the star’s box office-based bonus package.
Not only did Disney spurn the star’s demand for compensation after altering the film’s release plans, it slammed her publicly when she sued over the matter, calling her out for a “callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic.” (The two sides later reached a settlement.)
Insiders see the “Don’t Say Gay” PR stumble as an echo of that earlier misstep. “It’s really the same thing,” the second former executive said. “Hubris – believing one can impose one’s own control and order on a disrupted world.”
Unsurprisingly, some Disney executives dispute these negative characterizations of Chapek’s leadership — and insist the new CEO is fully committed to his employees. They point out that Chapek is putting his own singular stamp on the company to drive growth, reorganizing the business operations under Daniels’ Disney Media & Entertainment Distribution group and pursuing several moves that Iger had publicly resisted: Those include putting R-rated content on Disney+ and exploring sports betting deals for ESPN as the cable network continued to lose viewers.
Nonetheless, the sting of this will not go unnoticed by the Disney board or by Wall Street, which has hammered Disney stock of late after the company reported a slowdown in growth for the Disney+ streaming service. (In the last year, the share price has dropped by 33%, closing Friday at $131.75.)
Still, Chapek has an opportunity to show if he can lead differently going forward.
“If the stock goes up, all is forgotten if not forgiven,” the first former executive said. “If it doesn’t, there will be a change.”
Drew Taylor contributed to this report.
