Tuesday, November 22, 2022

Our standards for business disaster have gotten way too high.

Take Bob Chapek.

In a blockbuster development, Walt Disney Co.’s longtime chief Robert Iger is returning to lead the Burbank-based entertainment giant.

The Sunday night announcement by the Disney board — made shortly before Disney+ began its high-profile livestream of the Elton John concert at Dodger Stadium — stunned Hollywood.

The switch comes less than a year since Iger said his long goodbye after a storybook 15-year run as chief executive.

Disney’s board said he had agreed to serve two additional years as chief executive. Iger takes over for his hand-picked successor, Bob Chapek, who suffered a number of setbacks during his nearly three years as chief executive.

Any other year, he would have been a contender.

Under Chapek, Disney’s theme parks division posted an impressive rebound from the depths of the coronavirus pandemic [as did everything else in the tourism economy -- MP], in part through the kind of aggressive price increases that analysts believe Iger opposes. And its streaming business has grown rapidly, reaching 235.7mn across Disney Plus, Hulu and ESPN Plus.

But shareholders are no longer willing to fund streaming growth at any cost, as they were in the early stages of Disney’s foray into the business. Disney shares fell 13 per cent earlier this month after it reported that quarterly operating losses had risen by $800mn to $1.5bn due to exploding content spending and marketing expenses. Days later, Chapek announced a cost-cutting plan.

Chapek was a gifted rake-stepper. To paraphrase Twain, there may be a hundred other handier things to step on, but that wouldn't satisfy Chapek. Chapek had to turn out and find a rake; and if he couldn't do it, go and borrow one.

I've queued up the part where Bob Chipman explains just how badly Chapek stepped on a political landmine that almost every other CEO would have stepped over effortlessly.

Chapek's run was so bad it's considered the big black mark on Iger's career.

The saddest part is, as bad as Chapek's tenure was, he still ran the company better than the previous and current bosses at Warner Bros.

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