what pushed Disney to replace its CEO?

From executives and shareholders to employees and customers, the discontent at Disney over Bob Chapek’s management became increasingly palpable at the end of the last two years, the only ones that he held the position of CEO and which, unfortunately, coincided with the Covid crisis and the highest inflationary spike in the United States in four decades.

Chairman of Walt Disney Parks and Resorts Bob Chapek poses with Minnie Mouse during a ceremony at the Hong Kong Disneyland, Friday, Sept.  11, 2015 as they celebrate the Hong Kong Disneyland's 10th anniversary.  (AP Photo/Kin Cheung)

Bob Chapek poses with Minnie Mouse during a ceremony at Hong Kong Disneyland. Photo: AP/Kin Cheung

As chief executive, Chapek dealt almost immediately with a barrage of criticism for public relations missteps, political controversies and abrupt business decisions that did not receive shareholder support.

But it is believed that the straw that broke the camel’s back and what ended up putting pressure on the board to ask his predecessor, Robert Iger, to retake the reins of the company were Disney’s losses and very low income in recent months.

As Fortune magazine points out, shares of the world’s largest entertainment conglomerate fell as much as 41.4% overall for the year.

Tensions within the company

Chapek had assumed the CEO role in 2020, when he was serving as head of Disney’s parks division. One of his first major decisions was to restructure the company, giving greater power to executives responsible for distribution, in an effort to strengthen Disney’s approach to streaming.

The move did not go down well with some executives at the helm of content creation, who questioned removing responsibility for profit and loss and instead centralizing it under distribution.

Chapek’s plans to increase revenue for the Disney parks also upset regular customers. In October 2021, Disney launched the Genie+ app to monetize the previously free FastPass system, and guests felt the company was squeezing them for extra revenue amid a global economic crisis.

Scarlett Johannsson’s lawsuit

In July 2021, Disney called Black Widow actress Scarlett Johannsson’s salary “insensitive” when she sued the company for breaching her contract by releasing the film in theaters and streaming platforms simultaneously.

Nearly a year after the incident, Chapek fired Peter Rice, head of Disney’s television division. The shares fell again about 4% the next day, but the board issued a statement expressing its support for Chapek.

Homophobia and strikes

Disney’s public relations ran into a major challenge in 2022 with the publication of the Florida bill banning discussion of sexual orientation in classrooms, better known as “Don’t say gay.”

Florida is home to Walt Disney World, the company’s largest theme park, and Chapek originally chose to remain silent, drawing criticism from employees who wanted the company to take a more public stance against the project.

Disney CEO Robert Iger arrives at the Save the Children

Robert Iger at The Beverly Hilton Hotel, California. Photo by Jordan Strauss/Invision/AP

In March, the CEO spoke out against the bill, but it was too late. Many employees felt Chapek’s words fell on deaf ears and planned more protests, including mass staff walkouts.

However, Chapek’s remarks prompted the Florida state government in April to repeal a law that gave Disney special tax status for its Orlando operations.

poor earnings

In its transmission or streaming services, Disney accumulated more than double the losses registered the previous year, about US$ 1.5 billion, mainly in its direct-to-consumer division, which includes Disney +, ESPN + and Hulu.

Chapek blamed higher production and marketing costs for Disney+ programming, saying he expected losses to be reduced after a price increase for the ad-free subscription service.

When the losses were published, Disney shares plunged 13%.

Iger stayed on as Disney’s CEO until the end of 2021, but CNBC reports that Chapek made too many business decisions without consulting his predecessor, who disagreed with the company’s reorganization and the “Don’t Say Gay” bill. ”, or the public dispute against Johansson.

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