Bob Iger plans to leave Disney in 2019 — really, this time
The CEO reaffirmed he will leave the company in July 2019, when his contract expires after Disney extended it in March after a succession plan unravelled last year
By Leon Lazaroff
Walt Disney Co. CEO Bob Iger says he’s going to leave the world’s largest entertainment company in 2019. Really. He’s serious this time.
“This time I mean it,” Iger said in Los Angeles at a media industry conference hosted by Vanity Fair.
Iger’s firm affirmation that he will leave Disney in an official capacity in roughly two years when his contract expires is sure to set the Disney tea-leaf watchers into a frenzy. Much speculation for his successor will undoubtedly fall on Disney’s division heads, starting with Ben Sherwood, who runs its media networks group along with ESPN president John Skipper. Given that the biggest questions confronting Disney revolve around its television businesses, Sherwood’s experience would seem to put him high in the running. Sherwood also is said to be well-liked by Iger.
Others candidates within Disney are likely to include Bob Chapek, who runs the company’s theme parks and resorts operation, as well as Kevin Mayer, the company’s chief strategist. Mayer’s lack of operating experience, though, is likely to make him a long shot. Iger, 66, by comparison, was president of ABC Television and later chief operating officer of Capital Cities/ABC Inc. before it was acquired by Disney in 1996.
Iger was elevated to the same position at Disney in 2000 before succeeding Michael Eisner in 2005. Eisner was forced out of Disney following Roy Disney’s successful shareholder revolt.
Others likely to get mention as Iger’s successor include Facebook Inc.
COO Sheryl Sandberg, a member of Disney’s board since 2010. Her lack of operational experience running a television or film business is likely to work against her, but she doesn’t lack for fame and a reputation for competence.
Suffice it to say there are few secrets that are kept as tightly as Disney’s succession plans. In the months following the April 2016 sacking of Iger’s heir apparent, Tom Staggs, Disney’s board declined to say whether it had decided on someone else or whether the former theme parks division head had become frustrated that a final decision about succession hadn’t been made.
Iger was given a contract extension in March, accepting a US$5 million bonus to remain atop Disney until July 2019. Iger also will serve as a consultant for three years after that, receiving US$500,000 for each of the first eight quarters and US$250,000 for the last four in exchange for access to his “unique skills, knowledge and experience with regard to the media and entertainment business.”
Until then, Iger has a lot of work to do.
Chief among them will be to negotiate new carriage agreements with pay-TV operators covering about 50 per cent of its total subscribers. On Sunday, Disney proved that its networks still remain critical to cable TV subscribers. Altice USA Inc. was forced to accept an increased fee for ESPN, ABC and other networks. No doubt the emergence of new digital pay-TV platforms such as Sling TV from Dish Network Corp.
means that cable providers risk customer churn if they spurn ESPN.
Iger on Tuesday also underscored what he has said in the past: that Disney may eventually sell ESPN directly to consumers, forgoing the need to pass its network through pay-TV operators. That, of course, is a ways off. For all its fraying, the traditional pay-TV bundle remains a formidable business. Just ask Comcast Corp. and Charter Communications Inc.
Nonetheless, Iger said the new ESPN-branded streaming service to launch early next year will include some 10,000 live events a year. That number seems ridiculously high, but it is certain to give Disney a lot of information about how best to manage ESPN in the future. Iger also mentioned that while the company considered acquiring Twitter Inc., it ultimately chose to take a majority stake in BAMTech LLC, the streaming technology business launched by Major League Baseball that will run Disney’s full range of digital platforms.
Facebook and Comcast are holdings in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio.
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