The clock is ticking for current Disney CEO Bob Iger, whose contract expires in December 2026.
Iger, who is hard at work searching for his replacement, recently shared on a podcast with Kelly Ripa, “I think it would be safe to assume that I think about [CEO succession] all the time… I could say that ‘I’m obsessed with it’ would be probably an understatement, and actually, the board and I established when I returned that that would be among our biggest, if not our biggest, [priorities].”
Iger returned as CEO of the magic-making corporation in November 2022, agreeing to serve for two years; however, by July 2023, he extended his tenure to the end of 2026.
“It was not my intention to be pulled back in,” Iger told Ripa about returning to the chief executive role. “I owed it to the company that meant so much to me and had been so good to me to answer the call.”
However, since Iger’s return, Disney has faced some challenging moments, especially as the industry tries to shift away from linear television. These challenges include difficulties at the box office, fundamental changes at ESPN, and antitrust roadblocks for its upcoming sports joint venture, all of which have pressured Disney’s outlook. Another challenge the American company shared recently is slowing its parks business.
“We got into the streaming business in a very, very aggressive way. We tried to tell too many stories. Basically, we invested too much, way ahead of possible returns. It’s what led to streaming ending up as a $4 billion loss. … I’ve pulled that back in a variety of ways,” stated Iger at an investor conference this past May.
While shares have recuperated after hitting multiyear lows last year, they have fallen by roughly 8% since Iger’s return to the CEO position, and this year, they are down more than 1%.
However, Iger’s aggressive strategy reset has produced results for Disney’s total streaming division, which turned a profit for the first time last quarter with the help of new revenue streams like the ad-supported tier for its streaming service Disney+, as well as the addition to price increases and password-sharing crackdowns.
The company’s board still has more than two years until Iger’s contract is up, but the deadline for selecting Iger’s successor will come much sooner than December 2026.
Board member and former Morgan Stanley CEO James Gorman, who oversaw his succession at Morgan Stanley, will chair Disney’s succession planning committee. He will be joined by chairman and former Nike CEO Mark Parker, along with board members Mary Barra, the CEO of GM, and Calvin McDonald, the CEO of Lululemon.
“I would think by 2025 we’d see something — either in terms of an expected successor, even if not explicitly named,” Matthew Dolgin, senior equity analyst at Morningstar.
However, the state of the business could also play a part in finding a successor.
“Iger will likely not make any succession moves until the performance of Disney’s content stabilizes across the company’s various distribution channels, “Third Bridge analyst Jamie Lumley said. “Regardless of who ultimately succeeds Iger, investors will be looking for Disney to remain disciplined on costs and focused on building out a successful pipeline of content.”
Some names circulating in the windmill as potential replacements include Dana Walden and Alan Bergman, co-chairs of Disney Entertainment; Josh D’Amaro, head of Disney’s parks and experiences division; and Jimmy Pitaro, chairman of ESPN.
“Disney really wants to make sure the content business is back up and running [through] their traditional channels, studio, linear, as well as streaming,” Lumley said.
Other possibilities include former executives Kevin Mayer and Tom Staggs, who left the company in 2020 after Iger selected Chapek for the CEO position.
