Theme Park Insider

Disney's Different... and That's What Makes Replacing Iger So Hard

April 8, 2016, 9:55 AM · Disney threw its fans for a loop this week when the company announced that presumed CEO-in-waiting Tom Staggs would be leaving the company. Staggs recently won a promotion from head of Disney's theme park division to become CEO Bob Iger's number-two, as Chief Operating Officer. But Staggs apparently couldn't hold the support of Disney's board — or of Iger, according to a New York Times report. Faced with a show of no confidence from his bosses, Staggs had no choice but to walk.

So it seems that Bob Iger's successor as Disney's CEO will be... Bob Iger. At least for the time being. Iger's promised to retire before, and he's backed off that before, too. With Disney's amazing recent success in films, theme parks, and acquisitions, there's no business case for Iger leaving the company anytime soon.

But no one lives forever. And, given Iger's reported interest in politics and sports, it's conceivable that Iger won't want to keep running Disney for the rest of his life, either. What then?

Business reporters have coughed up a predictable list of potential CEO candidates from other entertainment and communication companies: former News Corp. chief Peter Chernin, CBS chief Leslie Moonves, Facebook CEO (and Disney board member) Sheryl Sandberg. But Disney is different. Sure, it's a movie studio and TV network. Yes, it owns publishing and production businesses. But Disney's heart is animation — whose production can't always be managed the same way as live-action work. And Disney's traditional cash cow is its theme parks — whose management is totally foreign to executives with no experience in the travel and hospitality industries.

Staggs seemed a perfect candidate to replace Iger because he's complemented his experience in television management with a generally well-received stint running Disney's theme parks. He learned this side of Disney's business, and theme park fans could look forward to Staggs' term as Disney CEO with some reassurance that he at least had a clue as to what running the parks demanded.

If Disney is to look outside of the company for its next CEO, it's unlikely that the company will find someone whose experience lines up with the company's needed as well as Staggs' did. When Disney looked outside the company to hire Michael Eisner in the early 1980s, Disney was very different. The company was fending off corporate raiders who wanted to break it up. Disney hadn't bought ABC yet. And its theme parks, while successful, were hardly the industry behemoths that they are today.

In fact, Eisner's success in building Disney, continued and expanded by his protege Iger, may have made it nearly impossible for Disney to look outside for a CEO, like Eisner, today.

"Nearly," though. There is one high-level executive out there whose experience does match Disney's needs. Someone who has run television networks and retail stores, overseen a movie studio and run theme parks. Someone who even worked for Disney in the past.

So who is this? Some Disney fans aren't going to like this answer, but here goes.

It's Steve Burke... of NBCUniversal.

As different as Disney is, it's not unique. Disney's archrival, NBCUniversal, nearly mirrors Disney in its business interests: movies, television, production, theme parks. No, NBCU doesn't have a cruise line or a big retail chain, but Steve Burke ran the Disney Stores when he worked for The Mouse, so that's not an issue. If Disney's board wants to look outside the company for a leader, it would make sense to start its search with the company that most looks like Disney — NBCUniversal.

Of course, that begs the question — if Burke were to be lured by Disney (and given his history with the company, that might require more cash than even Mossack Fonseca could hide), who would replace Burke at NBCUniversal?

Well, I hear that Tom Staggs is looking for a gig....

Replies (25)

April 8, 2016 at 10:09 AM · I've been waiting for your expert analysis of this turn of events, Robert, and you didn't disappoint! I was also thinking that there may be some Disney/Universal swapping ahead, and if one major executive switches over, it would make a lot of strategic sense for the other one to as well ("if they're gonna get our trade secrets then we should get theirs").
April 8, 2016 at 10:11 AM · My feeling is they let go an excellent executive. There is no one perfect candidate. The best bosses let their VPs do their jobs. They shouldn't micro-manage everything, but they should guide with clear goals. Even Iger wan't a perfect candidate to succeed Eisner. They could have handled the situation better. Give Staggs more time. Even allow him to work as an interim President. If not satisfied then, they can always replace him. What's wrong with keeping him as COO? Maybe the BOD has a conflict of interest since they are considering the board members as candidates.
April 8, 2016 at 10:12 AM · I would guess the most important focus for Disney now is to continue their own diversification through more acquisitions and mergers. Those successful acquisitions have not only made Disney a lot of money in the long run, but they have grown the company in an effort to keep it safe from future takeovers (a strategy that Eisner began).

Staggs is not a Hollywood insider. He doesn't know how to make those big deals. He doesn't have those connections. Even Iger rode on Eisner's coattails in signing agreements with Pixar and Lucasfilm. Those deals were possible due to the long running relationships with Disney started in the 80s. Iger may have picked some up recently, but there's nothing on the horizon. Staggs certainly doesn't have the ability to bring in another group. That's why Disney's board will be looking for someone outside. They want someone who can bring in the next multi-billion dollar IP to shore up the walls along Buena Vista St.

April 8, 2016 at 10:39 AM · I shudder when I imagine how some outsider will treat the parks. Too bad Matt Ouimet isn't available.
One problem is that Disney has become a bloated, unwieldly media conglomerate, the victim of overexpansion. Any new CEO should refocus the company on its core businesses. As it is, they are just juggling too many divisions and businesses.
April 8, 2016 at 10:34 AM · When it comes to the parks, I feel like he's done a pretty terrible job. Clearly he's very savvy and bought a lot of strong properties and the company is reaping the benefits. You said something interesting in this article: that Disney is not unique. It used to be, very much so. I would love another CEO like Eisner, someone who is not afraid to aggressively expand the parks.
April 8, 2016 at 10:43 AM · Steve burke left Disney with a bad tast in his mouth, he wasn't good enough for Disney. I have the feeling with the freedom and status he earned at comcast (a much bigger company then Disney) there is no reason for him to go back to the mouse.
In all honesty (when the Americans aren't to stupid to vote him president) I think Donald Trump is the perfect candidate to cotinue business at Disney.
April 8, 2016 at 10:43 AM · IMO Staggs would have been a great replacement for Iger. If anything, Stagss would probably have been better than Iger himself. Im just hoping that the job will go to someone inside the company, except for Bob Chapek. As much as it pains me to say it, WDC's future does look rather cloudy.
April 8, 2016 at 10:54 AM · I just want to know a few things. Who was responsible for My Magic Plus (1.5 billion for what?), the cost overruns in Shanghai (couldn't they see that the Chinese contractors were subpar?) and allowing Universal to beat Disney at it's own game? (Universal has the three highest rated rides - three!) Was it Staggs, Rasulo or Iger? It seems that the buck stops with Iger.

Iger may have been great at acquiring Lucasfilm, Marvel, Pixar and even Oswald, but he's been terrible for the domestic parks. And you said that Disney's cash cow has traditionally been the theme parks. Well, I really hope that Shanghai works out, and Star Wars land can beat out Harry Potter.

The best person for the Disney theme parks is not even at Disney any more - Matt Ouimet. He understood the customer. Disney should get out of ESPN and concentrate on it's core products, animation, live action movies and theme parks. Even ABC is a drag (fourth among the networks!), I can understand that it might complement the other divisions, but IMO it's not totally necessary.

April 8, 2016 at 11:04 AM · Bob Iger - not e-ticket attraction under his decade long tenure in Orlando. A disgrace of a CEO for the theme park division.
April 8, 2016 at 11:54 AM · What was the problem? Stags couldn't raise prices and cut quality fast enough?
April 8, 2016 at 1:01 PM · It is funny how the comments are ignoring the most prevalent question/assertion of RN's perspective: The answer is "yes". If Staggs is really no longer an option, then Disney should pursue Burke.
April 8, 2016 at 2:44 PM · Latest dual structure buzz...

Sandberg as CEO (digital)
Kathleen Kennedy as COO (feature film experience)

While a massive coup for women breaking the modern Hollywood glass ceiling, it still leaves DIS without a television expert. One could argue, with television moving to OTT, Sandberg's digital experience could possibly eliminate this concern.

April 8, 2016 at 2:54 PM · And let's make sure everyone is on the same page, Staggs walked, he was not cut.
April 8, 2016 at 3:32 PM · I'm sorry, but would it be too much to ask if we could get through just one Disney-related thread without going through this liberal nonsense?

Listen, I understand that everyone's entitled to their own opinion, and I understand that everyone is also entitled to express said opinions, but it feels like I'm just reading the same crap over and over! Hey, Disney-Haters, news flash, nothing you ever say is original or unique. It's all stuff that we've all heard a bajillion times before. Blah blah blah Disney is evil blah blah blah Iger is the IRL Mr. Burns blah blah blah FP+ sucks blah blah blah Universal is the best blah blah blah Walt would be ashamed blah blah blah instead of actually doing something about it I'm just gonna sit here and keep complaining because, yeah, just complaining about problems fixes them, right?

I know I'm coming across as rude and offensive, but I'm just so sick and tired of all this crap. Not because the Disney parks are my favorite parks, but it just gets so damn boring when you end up reading the same thing so many times. It really wears you down. If you wanna keep hating Disney and Iger, fine, but please for the sake of my sanity and for the sake of mankind, please find something original to say! Maybe bring up another issue with Disney that no one seems to have brought up before. Just please, stop making the same old and tired arguments.

April 8, 2016 at 4:25 PM · Bob Iger must leave, the sooner the better. Iger isn't part of the solution. Iger is the problem.

Spin off the ESPN/ABC networks and let Iger run that. He's a decent network executive, but it's obvious that he's unfit to guide the theme parks.

The next Disney CEO should have a liberal arts and hospitality background. Disney needs to restore employee morale and customer goodwill.

There is absolutely no reason why the next Disney CEO should be paid the obscene amount of money that Eisner and Iger paid themselves. How hard is it to raise prices every year?

April 8, 2016 at 5:06 PM · Disney needs a visionary to reshape the theme parks, not just rest on its laurels and decide that the market was mature, as Iger and Rasulo did before Universal reared it's powerful head.

Here's how to start - In Epcot, while you're on the path to adding characters, why not add the Ratatouille ride to the France pavilion? Add a Swiss pavilion with a Matterhorn. Relocate It's a Small World to the area between World Showcase and Future World. And relocate the Carousel of Progress to Future World. Then you will have a more coherent theme park.

While you're at it, put a Tangled dark ride in place of Small World in the Magic Kingdom, the Tangled rest rooms are there anyway. And put a Beauty and the Beast dark ride in back of the Be Our Guest Restaurant.

But it would take a radical-thinking visionary to do it, kind of like Walt, which means it will never happen.

April 8, 2016 at 7:34 PM · It seems that there could be candidates from Pixar. They have been involved in the animation and theme park side of things more now, too. They have been successful on the business side of things...
Also, possibly from Imagineering - where they are involved in every aspect of the businesses that Disney is a part of...
April 9, 2016 at 3:19 AM · Burke is too busy trying to beat his old employer at their game especially with the recent box office success that Universal has last summer with their tent pole movies making more that Disney's slate and cost less to make.

In addition with the success of Harry potter coupled with reacquiring land they use to own for future expansion. Burke has a busy plate.

Don't forget than Comcast under Burke a decade ago failed in a hostile takeover attempt of Disney. He maybe too preoccupied sticking it to his former employer

As for Matt Ouillet, he lacks experience on the media side of the business.

With regards to no E-ticket attraction built under Iger, what about the new E-ticket Avatar attraction debuting next year?

Only way Burke or Ouillet would return to Disney is if the board offered them a pay package that dwarves the one Iger has, doubt it

April 9, 2016 at 10:47 AM · What about John Lasseter? No one seems to be talking about him as a potential candidate. He has experience running a groundbreaking animation movie studio, and has been running WDI for the past few years. He even got his start working in the theme parks as a Jungle Cruise skipper!

He has the creative vision, passion, and ability to surround himself with more talented people that Walt seemed to have. He seems to me the closest thing to a modern-day Walt. Yes he doesn't have business experience per say, but neither did Walt; that's what he had his brother Roy for. So name someone from the business sector his CFO to really handle the business aspects, but have Lasseter be the face and creative leader of TWDC.

April 9, 2016 at 12:53 PM · Disney could make an offer that would double Burke's current salary of $30.1 million.
April 9, 2016 at 4:21 PM · Walt Disney World needs a new Walt Disney. Just to refocus on what it was all about in the first place. Next to him we need a Roy Disney.
The only man who incorporates that now is working at ComCast's Universal Studios and is doing a kick ass job.
April 9, 2016 at 11:55 PM · Matt Ouimet was a financial guy who made it a point to understand the Disney customer. He may not be experienced with media, but he understands Disney's cash cow, the theme parks.

Bob Iger was a media guy, he headed ABC before becoming number two under Eisner. The media outlets of ABC and ESPN are the ones that are faltering now.

Eisner thought that Iger wasn't 'bright enough' to be CEO, but Iger showed that he can lead and he made some good decisions. But some of his decisions, probably most importantly My Magic Plus, showed that that he doesn't really understand the theme park business. I've heard that many people at Imagineering were against My Magic Plus.

Media is secondary compared to animation, movies and theme parks. Just like when Eisner founded the Mighty Ducks (because Eisner was a sports fan), it was straying away from the core business. Disney doesn't need another media guy, it needs someone who understands its core business.

April 10, 2016 at 4:07 PM · I don't understand this "Iger has been bad for the parks" business. Iger has poured a lot into the parks during his tenure. Unfortunately, he had to focus first on the biggest emergencies: fixing DCA, WDSP, and HKDL, as well as developing a successful Chinese park before that market is saturated (since HKDL was a poor park). If it weren't for those problems left by the prior administration, the theme park development could have focused on WDW and DL starting in 2006. Also, considering his view of the value of IPs, I think it's highly likely that Disney would have gotten the theme park rights to Potter if the negotiations had really taken place under his leadership.
April 11, 2016 at 6:55 AM · It's also smart to note that you cannot be successful now as you could then. Eisner was in the 80's and 90's with the challenges and successes of that time. Iger's current issues with ABC and ESPN are examples of modern business troubles (people moving away from traditional cable tv).

Cable TV was trying to get into your home during Eisner, and now it's struggling to stay there during Iger. That's a big change in the American living room in a relatively short amount of time. Who ever is going to be successful at moving forward must be able to anticipate what is going to do well next and effectively capitalize on that. That wwill NOT be easy.

Who ever that is will certainly have failures. Hopefully there will also be success. Both will be interesting to discuss.

April 11, 2016 at 9:45 AM · With all due respect to the previous anonymous post and contrary to popular belief, Disney's biggest revenue generator currently is from its' t.v division (e.g. ESPN despite it's current woes) and movie studios not from it's theme parks and resorts.

Eisner, Walls and Iger all had backgrounds in Hollywood which is probably what the board is looking for in it's CEO. Rasulo and Staggs didn't quite seem to fit the bill.

Disney was a movie studio first, it's core business, theme parks came second.

As for My Magic plus, John Lasseter was also on board with that one according to the fast company article. That same article also states that Imagineering was annoyed that my magic plus was outsourced and not done completely in house and were not necessarily against it.

Matt Ouillet does understand the customer as he is proving as CEO of Cedar Fair.

Just that Disney's board seems to want a CEO with Hollywood ties, that's all

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