Disney board meets CEO contract up in the air


Disney will launch its new cruise ship, Wish, to much fanfare from Port Canaveral, Fla., on Wednesday, but arguably the biggest event for the company and its under-fire chief executive Bob Chapek will be a board meeting. two-day administration starting. Monday.

Questions about Chapek’s future at Disney emerged this year as the company was embroiled in controversy over its handling of Florida’s so-called Don’t Say Gay bill.

Monday’s long-scheduled meeting comes less than three weeks after Disney’s board of directors gave Chapek a vote of confidence after a murderous few months.

But that show of support has failed to quell speculation in Hollywood about Chapek’s future, with former executives noting that a stronger show of support would have been to renew his contract, which ends next February. A Disney spokesperson declined to comment.

Rich Greenfield, an analyst at LightShed Partners, said Chapek had high-profile mistakes such as his handling of the Florida bill and a contract dispute with actress Scarlett Johansson. But its overall mandate has been strong.

“He has a bad reputation in Hollywood, but it’s unfair,” Greenfield said. “In terms of how they got through the pandemic, I don’t think Chapek is doing a bad job. The bigger question is what Bob Chapek wants Disney to look like in the future, and does he have the board support to do so.

Chapek, 61, decided to hold the meeting in Florida despite Disney’s recent tensions with state Governor Ron DeSantis. In April, DeSantis signed legislation to strip Disney of special tax status in Florida after the company criticized the Parental Rights in Education Act, which restricts discussion of LGBT+ issues in elementary school.

Controversy has pressured Chapek from Disney’s LGBT+ employees, Republican politicians and conservative commentators. “There have been several public relations nightmares,” under Chapek, said Bank of America analyst Jessica Reif Ehrlich. “But I think they’ve gotten through the worst. They have great brands and manage them well.

This month, Chapek fired Peter Rice, the company’s top television executive, whom some saw as a potential candidate for his job. ” It was about [Chapek] trying to solidify its position,” said a former Disney executive. “It was game of thrones.”

Rice’s exit left no obvious Disney executives who could rise to the CEO job, though some company insiders noted that Rice never enjoyed broad support from the Disney board. group management. There has also been speculation that Chapek’s predecessor Bob Iger, 71, could return to the company, which Greenfield and other analysts reject.

“If they’re about to shoot [Chapek] there does not appear to be an heir apparent,” Greenfield said. “There is no obvious choice and I don’t buy the idea of ​​Iger coming back. It would be strange if he came back now.

Chapek succeeded Iger as chief executive in 2020, although Iger remained with the company as chairman emeritus until earlier this year. The Covid-19 pandemic erupted within weeks of taking office, forcing Chapek to close theme parks and other divisions. But the Disney Plus streaming network has exploded during the pandemic.

Disney’s streaming business continued to grow this year, unlike industry pioneer Netflix, which lost subscribers for the first time in a decade. Disney’s theme park business is also recovering strongly, despite continued park closures in China, analysts said.

But the company’s shares have fallen 47% over the past year, compared to an 11.3% drop for the S&P 500 index, as investor sentiment about the streaming industry has changed. On Wall Street, 80% of analysts have a buy rating on the stock.

Ehrlich noted that Disney has a solid slate of content for the rest of the year, with box office releases of Black Panther: Wakanda Forever in November and Avatar: The Way of the Water in December.

“Word of mouth about movie lineups is amazing,” she said, adding that the Disney Plus streaming service has a good season ahead with series such as Obi Wan Kenobi and Mrs. Marvel. “The company is solid.

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