Can Anyone Replace Bob Iger? The Fraught Reality of Disney’s Succession Plan

Bob Iger has presided over what has simultaneously been one of the most tumultuous shifts and fruitful periods in the history of the Walt Disney Co. As he embarks on a momentous endeavor to again reinvent the company through the launch of Disney+, the question looming over the company isn’t only whether Disney will be successful but who is poised to inherit the keys to the Magic Kingdom once Iger is gone. Three top Disney executives stand most likely to succeed Iger when he steps down, according to a dozen industry experts who spoke to TheWrap in recent weeks: Disney’s direct-to-consumer and international chairman Kevin Mayer, Disney TV chairman and media networks co-chair Peter Rice — who came over in the Fox deal — and Bob Chapek, chairman of Disney parks, experiences and products. Each of them has strong qualities, but each arguably falls short of one or more elements some deem necessary to lead the $60 billion entertainment conglomerate  — whether it be operational experience, a creative background or interpersonal skills. There are many observers, however, who wonder if Iger even intends to step down when his current contract expires in December 2021. “I don’t think Iger’s going to retire for another 10 years,” media analyst Richard Tullo said, expressing a belief generally shared by many others. “If you made me make a bet today, I’d bet he’d go beyond the… date when it expires,” one former high-ranking Disney executive told TheWrap. Addressing investors in April, Iger said he absolutely plans to step down when his contract as CEO and chairman is set to expire at the end of 2021. But we’ve been here before: Iger’s contract has been extended three times prior while he’s publicly talked about his plans to vacate the castle. Disney’s board of directors had planned for Iger to leave in 2016, until, in 2014 his end date was pushed to 2018. Then, after former COO and heir apparent Tom Staggs was pushed out in 2016, Iger’s contract was again extended, this time to 2019. Most recently his exit was prolonged another two years due to Disney’s $71.3 billion acquisition of Fox’s film and TV entertainment assets. “On its face, it doesn’t look to me like they’re currently managed or organized to provide for great succession in 2021,” the former executive said. Iger will, however, need to hand over the reins eventually. And with more public appearances — including the promotion of his just-published memoir, “The Ride of a Lifetime,” about his time overseeing Disney — Iger seems to be positioning himself for life after Disney, which has had one of the most remarkable runs as a public company under his stewardship. Since Iger took over in 2005, he’s increased Disney’s net income from $2.5 billion to $13.1 billion as the stock price has ballooned 450%. (Disney reports its 2019 fiscal fourth-quarter earnings on Thursday.) But the challenge for Disney to find a new CEO to continue Iger’s legacy is complicated by the current array of internal candidates — as well as a history of Iger pushing out protégés who might succeed him. Representatives from Disney declined to comment for this story.

Kevin Mayer is seen by many as the most likely internal candidate to succeed Iger — especially if his latest initiative, the Disney+ streaming service, is a success. Mayer has spent most of his time at Disney leading business strategy and helping to land some of Disney’s most essential deals: Pixar, Marvel, Lucasfilm, BAMTech and Fox. “He is in the most critical role for the future of Disney,” another former Disney executive said, noting that he nimbly followed Iger in pivoting from a staunch defense of the legacy cable and satellite TV ecosystem to an embrace of the new streaming way of life. “His biggest obstacle to becoming CEO, besides his bruising and belittling management style: not a creative bone in his huge hulking body. He is pure business and strategy. Zero creative; almost negative creative.” It’s hard to overstate the stakes of Disney’s streaming endeavor. Disney is investing $1 billion into Disney+ in the first year and earlier this week invited media members to a pre-launch event to meet with Disney+ executives. “Kevin is leading the charge on a lot of what the focus on trying to augment the technical skills needed to support the streaming service. And he’s done some things that look smart,” the former high-ranking executive said. “He’s really strong. I think very highly of him… He’s actually quite a good guy at the end of the day, but he can come across as brusque and direct. To succeed,  he’s going to have to soften that style and become more of a people person.” Dan Schechter, who heads the entertainment and media practice for LEK Consulting where Mayer once worked, said: “The die is cast. This is one of the biggest rolls of the dice ever in entertainment. If he wins this bet, hard to see how they don’t give him the big job.” But in interviews with nearly a dozen insiders, including subordinates and former colleagues, Mayer was described as a “bully,” a “bulldozer” and a “screamer,” someone known to send emails with the subject lines in all caps — “the email equivalent of screaming in person,” a former colleague said. Two individuals told TheWrap that Mayer has been working with an executive coach to learn a more tolerant management style. An individual with knowledge of the situation denied that he has worked with a coach.

Although very new to Disney, a transplant who came with this year’s acquisition of 21st Century Fox, Peter Rice has emerged as another formidable contender for the top job. He started off in the Fox marketing department and more recently served as president of 21st Century Fox and chairman and CEO of Fox Networks Group, where he helped double the business’s revenue while also managing sports rights deals with the NFL, MLB, the UFC, FIFA and WWE. Now at Disney, he reports directly to Iger, overseeing entertainment and news TV properties, including ABC News, the ABC broadcast network, ABC Studios, ABC-owned TV stations, the Disney Channel networks, Freeform, FX Networks and FX Productions, Fox 21 Television Studios, National Geographic Partners and Twentieth Century Fox Television. Rice also oversees Disney’s equity interest in A+E Networks. Unlike Mayer, Rice is known to be a consummate political player. That, some said, may set him up for success and allow him to outmaneuver Mayer, especially considering he has the creative expertise that the more veteran Disney executive lacks. “I think [Mayer] is going to be blindsided by Peter Rice. He doesn’t want to see it,” a media executive close to Mayer told TheWrap. “Kevin is all about numbers and performance. He’s convinced that if he wins on performance, he wins. But there’s other s—.” But since Rice only just entered the Magic Kingdom this year, he could be seen as too new — not sufficiently schooled in the Disney culture. “Turning himself into a ‘Disney person’ in the space of two years is probably a bit of a stretch,” the former high-ranking Disney executive said. “He’s the new kid in town that is enjoying a honeymoon period.”

Bob Chapek has been at Disney for more than 20 years, overseeing the parks and resorts business as chairman since 2015. Since he took over the division, the business has had the largest investment and expansion in its 60-year history, which includes the opening of Shanghai Disneyland in 2016. In 2018, the parks and resorts segment brought in $20.3 billion in revenue, up 10% from 2017 and nearly 20% from 2016. Chapek served as distribution head for the film studio from 2009 to 2011 before a stint as head of Disney’s consumer products. While he’s not seen as someone with creative chops, one former Disney executive who worked with Chapek praised him for his cost-cutting skills. “What he did in consumer products, what he did at parks is extract good margins out of businesses by reducing costs,” the individual said. Still, there’s no certainty the Disney board will pluck someone from within the company. Iger’s predecessor, Michael Eisner, came over from running rival Paramount Pictures. And Richard Tullo noted that in 2016, Disney appeared to eye Facebook COO Sheryl Sandberg as a possible CEO. Tullo also made a pitch for Netflix content chief Ted Sarandos. “I don’t know if you get someone traditional to run the company. I’d think you have to get a content guy, someone who ‘gets’ it, but is also capable of running the entire company,” Tullo said. “Who’s out there? I would argue that Ted is a guy who could do it.”

Succession is a thorny issue, to be sure, made more significant by Disney’s dominance in the industry. The studio has already grossed more than $8 billion in worldwide box office this year, and still has the highly anticipated “Star Wars” Skywalker saga finale and “Frozen” sequel. And with a souped-up film slate that included Fox releases, Disney swallowed 42% of this past summer’s domestic box office. The somewhat daunting historical mark is a testament to Disney’s acquisitions of Pixar, Marvel and LucasFilm, all of which happened under Iger’s leadership. The task is also complicated by Iger himself, who has thwarted previous succession plans — sometimes jettisoning talented senior executives in the process. When Staggs left in 2016, it was clear that he had been all but pushed out. An individual familiar with Staggs’ thinking told TheWrap that he would have been content to remain as COO until Iger was ready to leave. He was not invited to do so. While the board may have decided that Staggs wasn’t right to take over the company’s lead role, others believed that Iger simply changed his mind about the succession timetable after Staggs was appointed COO. “Bob’s point of view changed — in terms of leaving in general, when that would be most appropriate and how comfortable he was with having a successor. In other words, not very comfortable,” the former high-ranking executive said. “It was something about having someone who, generally speaking, was becoming accepted as a viable successor that made him uncomfortable.” Former CFO Jay Rasulo was another deputy positioned to potentially succeed Iger during the last round of succession conversations, but he too departed the company in 2015 after 30 years of loyal service, without an assurance of his future role. The board of directors, not the CEO, traditionally determines a CEO’s tenure or any succession plan, according to Ken Bertsch, executive director at the Council of Institutional Investors. Of course, Iger also serves as chairman of Disney’s board. “I’d feel better if Iger weren’t chair,” Bertsch said, explaining that a separation of roles would provide the company more stability in leadership once Iger does leave. “Obviously when Bob Iger wants to leave, he should leave, but it’s usually a decision for the board to make,” Bertsch continued. “There should be a process in place.” Iger told the Wall Street Journal in October that the board is aware of the need to plan for succession: “We’ve had numerous conversations about it, and there’s a plan in place. At some point, the board will feel that it’s proper to do so. But we’re not there yet.” In the company’s 2019 proxy statement for shareholders, Disney management wrote that the board discusses management succession with the CEO “at least once each year” and “is confident that effective leadership of the company would be assured and a highly qualified successor to Mr. Iger can be selected whenever one would need to be named.” Wall Street analysts have recognized the challenge ahead for Disney and its board. “That company is more complicated than most small countries to run,” Tullo said. “You’re looking for someone who can bat clean-up for the New York Yankees here, you’re not looking for a position player. You need somebody who could plug and play for LeBron James, you know? “To be at the head of that company, and on top of that actually continue to grow it, that’s got to be the hardest job out there,” he continued. “And by the way, you have to stay apolitical to a degree so you don’t alienate half your audience, yet you still have to be socially relevant… I don’t think there’s many people out there who can do that.” Then again, no one predicted that Iger would rise to the level of success with the company that he has. As Maureen Dowd noted in a September New York Times profile, Iger fought an uphill battle to convince the Disney board he was the right man to succeed Michael Eisner. “That’s a hard job to give up; no one has ever given it up voluntarily,” the former high-ranking executive said. “Walt (Disney) died in the job. Roy (Disney) died in the job. Michael (Eisner) didn’t give it up happily. Bob so far seems on his third extension… Instinctively, I don’t think he likes the notion that anyone would think that succeeding him was easy.” Part 1: Disney+ Boss Kevin Mayer: Brilliant Dealmaker or ‘Bully’? Both, Insiders Say