By Erich Schwartzel
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 13, 2019).
LOS ANGELES -- Walt Disney Co. Chief Executive Bob Iger won high
marks from investors after showcasing the company's new
streaming-video service on Thursday.
Before too long, another executive will be seeing that strategy
through.
Mr. Iger said he plans to leave when his contract expires in
2021. Disney's board is currently engaged in finding a successor
and should be able to identify one "on a timely enough basis," he
said.
Mr. Iger wasn't describing a formal search kickoff, said one
person familiar with the process, since the Disney board evaluates
contenders on a continuing basis. Some of the internal candidates
at the moment include Robert Chapek, who oversees parks and
consumer products, and Kevin Mayer, who is in charge of
international operations and the company's direct-to-consumer
efforts, including the new Disney+ streaming service.
Jimmy Pitaro, who was moved from running Disney's consumer
products and interactive division to the helm of ESPN in March
2018, is also considered a possible contender.
"I think they're still in these early days," said Peter Crist,
chairman for executive recruiter Crist|Kolder Associates, adding
that a typical search can take six months.
Whoever gets the gig will have big shoes to fill. Disney shares
were trading at around $23 when Mr. Iger got the top job. On
Friday, they hit a record at $130 a share, up more than 11% as Wall
Street responded favorably to Mr. Iger's outlining of Disney+, the
new streaming-video service.
The $6.99-a-month service will offer access to a library of
hundreds of Disney movies and television shows, as well as new
original programming based on franchises like "Star Wars" and "High
School Musical." The service's low price and stable of quality
programming could make it a game-changer in the streaming
landscape, several analysts said in investor notes issued
Friday.
Shares in Netflix Inc., the dominant streaming-video player,
fell nearly 5% on Thursday.
The next Disney CEO will be inheriting the financial bets Mr.
Iger is placing now. The company expects spending on the new
service to rise to $2.5 billion by 2024, and predicts operating
losses to peak between 2020 and 2022, due mostly to content
costs.
Mr. Iger has been CEO of Disney since October 2005, overseeing a
massive expansion of the company that has won him many fans on Wall
Street. He spearheaded the acquisition of Pixar Animation, Marvel
Studios, Lucasfilm Ltd. and, most recently, entertainment assets of
21st Century Fox- -- deals that have built Disney into a powerhouse
of blockbuster franchises.
The question of who will succeed Mr. Iger has loomed over Disney
for several years. The succession process was thrown into disarray
in April 2016 when Tom Staggs, a longtime executive considered an
heir apparent to Mr. Iger, stepped down as chief operating officer
after being told he was unlikely to be named CEO.
Mr. Iger has delayed his retirement four times. He made light of
that in his remarks at the Disney + investor event. "I was going to
say, 'This time I mean it,' but I've said that before," Mr. Iger
told the crowd.
Thursday's remarks were his most definitive yet on the topic.
"As I've said many times, there's a time for everything and 2021
will be the time for me to finally step down," he said.
A wild card in the Disney search is how big an influence Mr.
Iger will play in the selection, Mr. Crist said. "As much as boards
like to think they own the process on succession and the ultimate
selection of the CEO, it's influenced greatly by a strong existing
CEO," he said.
Multiple recruiters predicted Disney would choose an insider for
its next leader, but said the company would still look at external
candidates.
Mr. Mayer, who has helped orchestrate Mr. Iger's biggest deals,
played a visible role in Thursday's presentation to investors,
offering details on the price and rollout strategy.
Since Disney's acquisition of Fox assets closed, a new candidate
has also emerged among Hollywood tea-leaf readers: Peter Rice, the
former 21st Century Fox president who joined Disney after the
acquisition.
He has both movie and television experience, having overseen the
Fox Searchlight studio before heading all of Fox's television
operations, with the exception of Fox News.
At Disney, the ABC broadcast network and ABC News as well as the
entertainment cable networks including Disney Channel report to Mr.
Rice. He doesn't have oversight of ESPN.
Joe Flint and Chip Cutter contributed to this article.
Write to Erich Schwartzel at erich.schwartzel@wsj.com
(END) Dow Jones Newswires
April 13, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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