Disney's Different... and That's What Makes Replacing Iger So Hard
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....
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").
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.
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).
I shudder when I imagine how some outsider will treat the parks. Too bad Matt Ouimet isn't available.
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.
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.
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.
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.
Bob Iger - not e-ticket attraction under his decade long tenure in Orlando. A disgrace of a CEO for the theme park division.
What was the problem? Stags couldn't raise prices and cut quality fast enough?
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.
Latest dual structure buzz...
And let's make sure everyone is on the same page, Staggs walked, he was not cut.
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?
Bob Iger must leave, the sooner the better. Iger isn't part of the solution. Iger is the problem.
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.
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...
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.
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!
Disney could make an offer that would double Burke's current salary of $30.1 million.
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.
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.
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.
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).
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.
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