Bob Iger is back Walt Disney Company as chief executive less than a year after he retired, an unexpected return coincides with the entertainment company’s efforts to boost investor confidence and profitability at the media unit. your online communications.
Iger, 71, who served as chief executive officer for 15 years and retired as chairman last year, has agreed to serve as chief executive officer for another two years, effective immediately, Disney said in a statement late Sunday. He will replace Bob Chapek, who took over as CEO of Disney in February 2020 just as the COVID-19 pandemic hit, leading to park closures and visitor restrictions globally. .
Disney shares jumped more than 9% in premarket trading in the US, valuing the company at about $182 billion. Frankfurt-listed shares jumped as much as 10% in European trading on Monday, set for their best day in nearly two years.
“It may be necessary to use the old tiller,” said Markets.com analyst Neil Wilson, as the company spends billions of dollars to compete with rival Netflix and find a way to recover its share price.
Year-to-date, the stock is down more than 40%, compared with a nearly 7% year-to-date drop for the broader Dow Jones Industrial Average. It has lost almost a third of its value during Chapek’s time in power.
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“The Board concluded that as Disney embarks on an increasingly complex industry transformation, Bob Iger is uniquely positioned to lead the Company through this pivotal period,” President Susan Arnold said in a statement. declare.
Disney disappointed investors this month with earnings reports that showed its streaming media unit, which includes Disney+, is losing money. Shares hit a 20-year low a day after fourth-quarter earnings.
The streaming business lost nearly $1.5 billion in the quarter, more than double the loss the previous year, eclipsing subscriber numbers. The unit, which competes with Netflix Inc among others, has yet to turn a profit since its launch in 2019. Disney said it expects Disney+ to be profitable.
in fiscal year 2024.
“I am an optimist, and if I have learned one thing from my years at Disney, it is that even in the face of uncertainty – perhaps especially in the face of uncertainty. – our staff and Cast Members have both achieved the impossible,” Iger said in a memo to staff seen by Reuters.
Several aggressive investors have put pressure on Disney this year, including Third Point, which is led by billionaire Daniel Loeb.
In August, Loeb began pushing for changes, including the removal of the sports TV network ESPN and speeding up plans to take over Hulu from Comcast Corp, the minority owner. The investor later tweeted that he better understood ESPN’s value to Disney.
In the days following lackluster earnings reports, Trian Fund Management LP, co-founded by Nelson Peltz, earlier this month bought more than $800 million in Disney stock, the WSJ reported Monday, citing people familiar with this issue.
Trian’s view is that Iger should not return to taking control of the company.
The stake is below the 5% disclosure threshold, which is not as large as Trian would like and will likely increase depending on market conditions.
According to the report, the fund is also seeking a seat on Disney’s board as it pushes the entertainment giant to improve operations and cut costs.
Disney did not respond to a request for comment on Trian.
Iger left Disney on a high as the company led the fight against Netflix in the streaming wars. During his tenure, Disney made a number of key acquisitions, including Pixar Animation Studios, Marvel Entertainment, and 21st Century Fox, while increasing its market capitalization fivefold.
During its first term, Disney’s annual shareholder return was more than 14%, much higher than rival Comcast and
broader stock market.
On this second tour, Iger was tasked with “putting Disney on a new growth path” and working with the board to identify a successor, the company said.
Two company sources said the leadership change took employees by surprise.
Shortly after Iger’s return was announced, Netflix co-founder Reed Hastings tweeted: “Ugh. I was hoping Iger would run for President. He’s great.”
(Reporting by Lisa Richwine and Dawn Chmielewski; additional reporting by Eva Mathews in Bengaluru and Lucy Raitano in London; Graphics by Vincent Flasseur; Editing by Kenneth Li, Miral Fahmy, Josephine Mason, Anil D’Silva and Bernadette Baum )
