Media giant’s board now looks to outside candidates to replace CEO Bob Iger, whose contract is up in 2018
The sudden departure on Monday of Disney COO Tom Staggs, the former theme parks head positioned just last year as heir apparent to CEO Bob Iger, throws the media giant’s succession plan into disarray.
Staggs, who beat out then-CFO Jay Rasulo for the COO title and was elevated to the company’s No. 2 slot 14 months ago, seems to have lost the confidence of the Disney board. After the market closed on Monday, the board issued a statement that they planned to “broaden the scope of its succession planning process to identify and evaluate a robust slate of candidates for consideration.”
A Disney executive told TheWrap that Staggs interpreted the announcement to mean he was not the favored candidate and chose to leave, effective next month.
Also Read: Disney COO Tom Staggs to Exit in May After Just 14 Months on the Job
Disney stock fell 1.49 percent, to $97.18, two hours after the market closed on Monday.
The news came as a surprise to Wall Street analysts, to say the least. “No one had a whiff of this. I will honestly say I’m in shock,” Rich Greenfield, Head of New Media Satellite and Telecom Industries and Co-Head of Research and Media and Technology analyst at BTIG, told TheWrap. “Wall Street loves Staggs. He led the turnaround, a big change at the parks. He knew the company better than anyone.”
Still, Disney has some time to craft a new succession plan. The board bought itself some additional leeway in October 2014 by extending Iger’s contract for another two years, through June 30, 2018.
Iger, who took over as CEO in 2005 from Michael Eisner, has led the company to record growth thanks to key acquisitions of intellectual property treasure houses like Pixar, Marvel Entertainment and Lucasfilm. He integrated those units into the larger company, exploiting their brands across multiple divisions, from movies to TV to theme parks to merchandise.
Also Read: Disney CEO Bob Iger's Pay Falls to $44.9 Million in 2015
Disney posted $8.4 billion in profit in 2015, up 12 percent from the year before.
But now the two most qualified internal candidates to take over the media giant are gone; Rasulo exited the company last June.
Despite Iger’s success, Disney is facing many serious challenges, particularly the threat of cord-cutting to its cable TV divisions, that the new CEO will have to address. “The company is really hitting a wall,” Greenfield said. “ESPN business has real issues. Yes, the content is doing amazing, but they’ve got real issues on 50 percent of company, which is cable networks.”
Disney CEO Search: Could Sheryl Sandberg, Peter Chernin, Barack Obama Replace Bob Iger?
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The list of who could run Disney in place of Bob Iger is shockingly short. The job of running a multi-tiered, highly diversified global entertainment company requires a rare mix of fiscal discipline, risk-taking and artistic creativity. Here's who might be up for it.
Sheryl SandbergÂ
The COO of Facebook would need a big inducement to leave her stock package behind, but Sandberg – who brought her kids to the “Star Wars� premiere – might be ready for a change. Having suddenly lost her husband last year, she might be ready for a move from Silicon Valley. And having sat on the Disney board since 2009, she knows the company well. She has the rare combination of strong interpersonal skills, creative thinking and management discipline that the Disney job requires.
Steve Burke
The CEO and President of NBCUniversal may be the most qualified person to take the reins from Bob Iger. He runs a media company that like Disney has a film unit, a tv network and a theme park. And at 57, he's young enough to take the gig. Only problem is: he already runs a global entertainment company, why switch?Â
Jack Dorsey
Already the CEO of two public companies, Square and Twitter, Dorsey is a Disney board member with a flair for creative thinking, risk-taking and a take-no-prisoners attitude to innovation. Is he too young and untested for a gig like this? Wall Street will probably think so. But he’d be a ballsy choice, and it would give Dorsey a chance to leverage all he knows about social media with online commerce against the storied brand.
Anne SweeneyÂ
The former chief of ABC left Disney after learning she wouldn’t get the top job, but that doesn’t mean she should be counted out. She’s a formidable executive, with deep knowledge of the company’s culture. Downside? She said she wanted to direct.
Peter CherninÂ
Rupert Murdoch's former No. 2 left News Corp. because he knew he’d never have the top job. He has a superb combination of experience running a global media company, taking big risks with technology investments (even if MySpace didn’t work out so well) and hiring excellent executives for entertainment divisions that mirror many – though not all – of Disney’s. Chernin’s age, 64, argues against him, and God knows he’s making plenty of money through his movie-producing gigs and his investment vehicle, The Chernin Group. But he's a strong contender in a very limited field.
Chase CareyÂ
Carey is a candidate similar to Chernin but without his former colleague’s flair. He is known as a top operator rather than a risk-taker. That said, he has rare experience running a global media company in the digital age. Did we say Hulu?
Kathleen Kennedy
The President of Lucasfilm, creator of Disney-owned “Star Wars,â€? is hugely respected by the film industry and well-liked within Disney. Kennedy has no experience running a multi-billion-dollar media company, but she successfully relaunched Disney’s most exciting film franchise and worked with Steven Spielberg on “E.T.,â€? “Raiders of the Lost Arkâ€? and “Jurassic Park.â€?Â
Reed HastingsÂ
The founder of Netflix is an unlikely choice to run Disney, but think about it: His company has arisen as the most formidable challenger to traditional movie companies. And as ESPN subscription numbers show, streaming is Disney’s greatest weakness. Hastings can run a multi-billion-dollar company, and in fact he already does.
Jeff Weiner
The CEO of LinkedIn is a former Warner Bros. executive who has grown up to be one of the most exciting business leaders in America. His maturation as a leader is all the more impressive because he did it in the harsh glare of a tech bubble. Weiner successfully took the professional social network public and might well be ready to take all he learned in Silicon Valley to Hollywood. They’d be lucky to have him.
Barack Obama
The president will be available and open for job offers starting in January 2017, coincidentally just months before Bob Iger needs to bow out, stage left. Would the president be interested in living in California? Joining the private sector? Running the Magic Kingdom? It would be just the kind of challenge that the “no drama� leader of the free world might find to his liking after the rough treatment he received in the White House.
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Those qualified to replace Bob Iger as Disney CEO are limited to the top-tier of American executives — including Sheryl Sandberg and Barack Obama
The list of who could run Disney in place of Bob Iger is shockingly short. The job of running a multi-tiered, highly diversified global entertainment company requires a rare mix of fiscal discipline, risk-taking and artistic creativity. Here's who might be up for it.