Is Bob Iger Finally Out?

Is Bob Iger Finally Out?

Everybody keeps asking if Kathleen Kennedy is out, but the fact is, she isn’t the important one.  

Bob Iger is the one who transformed the middle-class-family-friendly Walt Disney Entertainment Company into the Woke world consuming void monster; Mickey the Great and Terrible.  He’s the one that diluted the Disney brand by buying up IPs left and right no matter if they fit with Disney’s traditional image or not.  He is the one that has protected senior executives from a well-deserved firing.  He is, in short, the one that needs to go.

Iger started out at ABC television dressing sets for $150 a week back in 1974.  By 1995 Iger had worked his way up the ladder to being president of Capital Cities/ABC.  That was the year Disney acquired ABC and Bob Iger along with it.  This is the big thing to understand about Bob Iger, he did not come up through the ranks of Disney.  He never got its corporate culture. Not really, not at a bone-deep level.  He was not and never would be a “Disney pixie-duster.”  Iger would always be an outsider and one that didn’t care if changed Disney Entertainment into something drastically different than the company Walt created.

By 2005, he had become the COO of Disney, the number two guy at the company when Roy Disney went to war with Michael Eisner.  Iger managed to walk a tight rope during that hurricane and was still standing on the high wire when Eisner fell. 

When he took over as CEO there was very definitely an opinion in the corporate air that, Iger would do for now but only until they could find someone permanent.  No matter what Bob says, he was absolutely never a creative professional.  Disney’s board wanted one of those, they just couldn’t locate one quickly enough. If Iger was going to keep the key to his private bathroom, he was going to need a big win fast.

Luckily for him, Eisner’s biggest screw-up could be reversed.  

Steve Jobs’ Pixar studio had had an exclusive, hand-in-glove relationship with Disney for better than ten years but thanks to the personality of the Latter Years Eisner, that was now in pieces on the floor.  The truth about Pixar was that while all of their movies had been major hits, they were expensive hits.  And they only came out once every three years.  One bomb, or even an underperformance, would sink the studio.

Pixar was more of a merger than a buyout.  John Lassesseter was made the Chief Creative Officer of Disney, Steve Jobs assumed a position of suzerainty in Disney and the board thought they had found their new CEO. The view at the time was, Lasseter is perfect for the job, he just needs a little more time in the bottle.  Let him operate at that level for a few years then give him Iger’s job.

Iger needed another win.

There is no question at all that he got the biggest win of his career with the purchase of Marvel. For a paltry $4billion he got, not just the rights to a bunch of superheroes when superheroes were super hot, but he also got an active production pipeline with three films already in the works.  Marvel has made better than twenty billion for Disney.

Although, the Marvel buyout wasn’t without its downsides for Disney.  

The biggest was brand dilution.  Iron man and Cinderella were never going to mix.  

Although Disney owned all of the Marvel superheroes they couldn’t use all of them.  The IPs had been licensed out all over the place years ago.  Disney still can’t create a Marvel Land at Disney World because of Marvel’s previous contract with Universal.  There is a Marvel heroes’ campus at Universal Studios and as far as anyone can tell, it’s in perpetuity as long as they are using the heroes.

Regardless, it was still a major win for Iger.  

The same year that Marvel was acquired, Roy E. Disney died.  This severed the last family connection the company had with its founders.  Later that year Steve Jobs finally came forward with his health problems and announced a six-month leave of absence from Apple.

All talk of John Lasseter replacing Bob Iger died out.

Here is the big thing: Marvel was Iger’s last win.  All the rest of his big buys since then have been disastrous errors.

Michael Eisner had been the one to first establish a relationship with Lucasfilm. Captain EO had been produced by Lucasfilm.  Star Tours had been a major hit at the parks.  Hollywood Studios in particular had developed and fostered extremely warm relations with the Star Wars fanbase.

George Lucas for his part had become rather disengaged with Lucasfilm after Indiana Jones and Kingdom of the Crystal Skull.  Its poor reception and box-office underperformance had everyone in Hollywood saying, Lucas was past it.   Red Tails did nothing to counter this narrative. Fan relations between Lucas and Star Wars fans were deteriorating, which is another way of saying that by 2012 the internet was enough of a thing that Lucas could no longer shield himself from their criticism.  

Bob Iger had been trying to talk George into selling Lucasfilm since before the Marvel purchase.  Lucas finally said, let’s talk.

Here is the part that isn’t too well known.  

As negotiations proceeded apace for several months, Iger kept running into what he thought were rather odd objections to various things, involving George’s future involvement.  Iger finally worked out what the disconnect was.  Lucas thought he was getting “the Pixar Deal.”  That after the ink was dry, he was going to become a major figure at Disney.  Bob Iger told him as gently as he could, no George, we just want the IP, not you.

At that point George Lucas said, that he was NOT going to sell.

Bob Iger then informed him, we are too deeply into these negotiations.  If you walk away now, Disney is suing you.  You will lose and end up paying us $500 million.  Iger was right and Lucas knew it.

This was the big reason that Lucas dug in his heels on the price.  $4 billion and not a cent less.  You are paying me the same as you paid for Marvel.  It was his last chance to try and keep his company. $4 billion was stupid money for Lucasfilm but from a legal standpoint, it was a good faith price.  If Iger walked away, then that was all on him.

The thing is, in 2012 Star Wars was realistically worth no more than $3 billion and that is being very, very generous. What made Marvel worth the price was its production pipeline, which was running like a machine with plenty of films both in active production and in advanced development.  What Disney was really paying for was a bunch of people who already knew what their jobs were, and how to do them right. The opportunity costs had been minimal.

On the other hand, Lucasfilm was a moribund film company.  No movies in production and none in active in development. The last Star Wars flick had been released seven years ago. The IP was its only primary asset.  Lucasfilm would tie down a huge amount of money and resources just creating a film company and developing a slate.  The opportunity costs of things that Disney couldn’t pursue while it was rebuilding Lucasfilm would be huge at the price of $4 billion.  It would need to rake in (call it roughly) $16 billion over ten years before it would be in the black.

But Bob Iger clearly figured, hey, it’s Star Wars.  What could possibly go wrong?  And told George it was a deal.

He does look like he is selling his children to the White Slavers.

The rest you know.  Lucasfilm has only grossed $4 billion.  In business terms it should have been Bob Iger’s biggest ever disaster.  

Shockingly, Iger managed to come up with one that was far worse.

For a long time, producers had been complaining about $200 million budget films.  All the money you had to spend on superstars, the split with the theaters, getting peeled on foreign exchange rates, foreign taxes, foreign extra-legal levies (bribes), and the backend deals you had to pay to everyone.  And that was if a film was successful! 

Young Turk ProducerBoss, remind me.  What was our gross revenue last year?

Old Timey Movie MogulWe had a fantastic year! The best in our history! $5 billion in gross receipts.

Young Turk ProducerNetflix grossed $20 billion.

Old Time Movie Mogul (blinking slowly in shock): …

Young Turk ProducerOff our content.

Old Timey Movie Mogul : And they have no theatrical split, do they?  The money is all theirs.

Young Turk Producer You got it. I meanwork it out, Boss.  We’re in the wrong business.

Iger’s problem was that he noticed this trend the same time everyone else did.  A buying spree of studios started up all at once.  Everyone was chasing that $20 billion dragon.  To make it in streaming you would need a big slate of current TV and film productions, plus, a huge back catalog.  

For Disney, there was no problem with the former, but the latter was a real stumbling block.  Walt Disney had been more of a super-producer than a mogul.  They only had a few hundred titles in the vault.  And the best ones were already in the home libraries of their primary pixie-duster market.

There was no question Disney needed to buy somebody else’s catalog.  The question was whose? MGM wouldn’t have been a bad choice.  They used to have a pretty close corporate relationship in the 1990s.  It was called MGM Hollywood Studios at Disney World when it first opened.  It wouldn’t be too expensive either, MGM had mostly been a resort company for decades.  It would have been the safe choice.

But Fox-owned almost all of the characters that Marvel had licensed out. Bob wanted them back.  While at $35 billion, the price was painful, it was worth it in terms of acquired IPs.  But then Comcast started a bidding war.  By the time the price got to $70 billion, the lost Marvel IPs were no longer remotely worth the cost.  $70 billion was utterly nuts for 21st Century Fox. 

The problem was one of over commitment.  Bob Iger’s decision making process had developed to a point where he couldn’t make a good decision when it came to mergers and acquisitions. It was clear that his battle cry would always be, “M-O-A-R!” 

Iger paid it.

Disney was now in the position of being the snake that had swallowed an elephant in February of 2020.  That was when the board called him in for a special little chat.  

Covid-2019 was looking (back then) to be the worst killer since the Spanish Flu of 100 years ago.  The parks in Shang-Hai and Hong Kong were already closed.  Disneyland Tokyo and Disney Sea were about to shut down. No theaters in Asia were open east of the Himalayas.  And all of Europe and America was going to be in the same boat in 30 days.  

The gist of the meeting allegedly was, Bob, We had more than enough of a cash reserve to ride this out before your extinction-level event of a deal for Fox. We. Are. Done. If you offer your resignation now, We will accept it.  Chapek is now the CEO, We are going to need Budget Cut Bob on this if Disney to survive your screwup.  You get to be Chairman of the board for a couple of more years, then you get elevated to emeritus status and join Michael Eisner at his window seat.

And that should have been that.  Even the most glorious rein must end someday.  

Or does it?

What followed next was one of the weirdest events in American corporate history.  Chapek had had no real plans as CEO because this promotion came right out of the blue.  Normally, a new CEO wants to make his impact felt but when Covid-19 hit, the only thing Chapek could do was put fires out that were springing up everywhere. And it wasn’t just Covid turmoil either.  

CEO of Disney is a pretty big prize, all the company’s senior people wanted it. Usually, the selection of the new king would have been quietly known in advance and the losers know they need to “make arrangements” before the coronation.  But Iger’s fall was so sudden that Disney still had a bunch of failed prince-candidates on the payroll.  These high visibility senior officers started to leave, one by one, just as the stock price made its completely expected tumble down to $86 per share down from a recent high of $149.

Disney entertainment had every appearance of a company that was floundering badly.  The institutional stockholders panicked and suddenly Bob Iger is back in the driver’s seat.  He could countermand any of Chapek’s decisions. The reporting officers all went to him first and Chapek second. All of Iger’s pet projects were moving forward. He was still making deals. And Kathleen Kennedy still had her job despite the fact that she was killing the Star Wars franchise.  Bob Iger had all the power and Chapek had nothing but an empty title. 

Forgive me for stating the freaking obvious but Fortune 500 company CEO is not a job that you job-shadow first.  You can either do it or you just can’t.

And it was starting to look like Chapek just couldn’t.  It was feeling very much like Iger was only using Chapek as a lightning rod during Covid.  It felt like when the plague left town, Chapek would leave with it and Bob Iger, would “reluctantly have to step back in as CEO.”

The problem with this plan (if it was the plan), was that Iger had become a shit-Midas. He made a deal with the NBA to finish their season at Disney World under quarantine conditions in exchange for exclusive broadcast rights.  It was another money loser.

Between the players sucking China’s dick and wearing BLM slogans on their jerseys, NBA viewership was down 20% in 2020. Considering the NBA had lost 50% of its viewership since 2010 this is a brutal loss. “Game 5 between the Los Angeles Lakers and Portland Trail Blazers was the least viewed game of the entire series, drawing 2.92 million viewers.”

Golf was drawing bigger ratings than basketball.

Iger’s biggest problem is of course his protection of Kathleen Kennedy.  Everybody assumes she has blackmail material on Iger but there is an alternative explanation.  She has been married to super-producer Frank Marshall since 1987 and they were deeply involved since the early 1980s.  It was the big reason Spielberg had to keep her around.  They are a major political force in Hollywood and Hollywood is Iger’s political support base.  It’s no secret he is going to run for president.  If Frank Marshall and Kathleen Kennedy are pissed at him, then Hollywood won’t come out for him early and he needs Hollywood to come out really strong early-on if he is to build momentum.

Consequently, Kathleen Kennedy has been protected from the slings and arrow of outraged investors.  But after Carano was fired those projectiles appear to have landed on Iger instead.

This Variety article recently appeared:

“The Walt Disney Company is in the throes of a major leadership shift, with newly minted CEO Bob Chapek asserting more authority as the longtime leader he replaced, Bob Iger, prepares to surrender his executive chairman role for emeritus status at year-end.

The two men’s once-warm relationship has grown strained, according to four insiders. This comes as Chapek has overseen a.. reorganization that centralized the media company’s content distribution and ad sales.

At the corporate level, Iger has moved “much more into the background than he was a few months ago, even on the creative side,” insiders say. In a sign of the leadership transfer taking place, Chapek has not only joined Iger in creative meetings but actually convened some this spring with top creative teams in television…”

These are the kind of stories you would have expected to see a year ago when Chapek got the job.  What you have to know about the trade publications like Variety and Hollywood Reporter is that they are effectively owned by the industries they cover.  And they wouldn’t dream about running a piece on Disney’s CEO unless he had given that article his blessing.

It’s official.  Bob Iger is out.

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Comments (5)

  • Wazdaka Reply

    He used Disney’s cheque book, like an Arab prince with terminal cancer.

    May 17, 2021 at 8:44 pm
  • Dave W. Reply

    Does this mean I can dare to dream that Kennedy will lose her protection and get the boot?

    May 17, 2021 at 10:15 pm
  • furor kek tonicus Reply

    well, now that the chief retard is out maybe we can get rid of little miss Woke-ahantas.

    May 17, 2021 at 10:15 pm
  • MrUNIVAC Reply

    Another one of Iger’s considerations may have been that Fox owns the distribution rights to the original Star Wars (A New Hope) in perpetuity, as part of the deal George signed for the merchandising rights. That’s still an idiotic price though.

    On top of everything else, the Marvel franchises he bought back are in a dismal state and need to be rehabilitated just like Star Wars. X-men had a disappointment in Apocalypse followed by the back-to-back bombs of Dark Phoenix and New Mutants. Josh Trank’s Fantastic Four is up there with Alien 3 as one of the most legendary troubled productions in Hollywood history, and was a box office bomb to boot. Speaking of aliens, both that franchise and Predator are confused messes which haven’t had hits in a long time.

    There’s also the issue of them betting the company on Jim Cameron and Avatar just like Warner did on GRRM and Game of Thrones, and it’s working out just as well.

    May 17, 2021 at 11:46 pm
  • Old Mouse Reply

    George Lucas should have upped his bluff and asked for a multiplicative of the Marvel price, $8 bil or more, on the grounds that “SW as a singular brand has more cultural significance than any 10 Marvel properties put together.”
    Really forced Loose Pockets Iggy Bobbie to put his money where his consolidation monomania is.
    Seriously, from the sound of that negotiation alone, not even getting into all his other corporate stunts and delusions of future career prospects, Iger sounds like he’s such a insecure control-freak that Kathleen might actually be just modeling herself after him.

    May 18, 2021 at 6:27 am

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