Disney’s Race to Replace Bob Iger: A Succession Strategy Game

Walt Disney The company is betting that James Gorman can play two consecutive matches.

The former Morgan Stanley CEO has navigated what is considered one of the smoothest succession processes in recent corporate history: He announced his plan to exit the investment bank in May; it was revealed that three internal candidates were running; chose one (Ted Pick); and did so, leaving the rest of the company behind after it was all over.

Gorman will become Disney chairman in January and will make finding a successor to CEO Bob Iger his top priority, targeting a decision “in early 2026.”

That’s no easy task considering it’s been two years since Iger returned to the company with the promise of re-imagining a successor, as well as a contract extension that will keep him at Disney until 2026.

“What you have now is an extremely powerful CEO, but whoever succeeds him in that role will not enjoy the same amount of informal power,” says Henning Piezunka, an assistant professor of management at the Wharton School of Business at the University of Pennsylvania. . “In that sense, it’s a bit of a thankless job: although formally you get exactly the same position, informally you have a completely different power base.”

And while the last time Disney picked a new CEO was apparently Iger’s call to name Bob Chapek as his successor, this time the board is very, very interested and has no shortage of strategies and candidates to explore. Hollywood Reporter takes a closer look at some of Gorman’s suggested search process options:

Needs more seasoning: odds 5-1.

Gorman’s decision that Disney plans to announce a CEO in 2026 suggests the board believes internal candidates, which include Dana Walden, Josh D’Amaro, Jimmy Pitaro and Alan Bergman, are not quite ready to take over yet. . But the 2026 date doesn’t mean Disney can’t take action in 2025.

The company could well move some executives, shifting oversight and responsibilities and giving potential successors experience in other parts of the company. Disney tried this a decade ago with Tom Staggs and Jay Rasulo swapping roles as CFO and parks chief (it didn’t work out then), but with multiple internal candidates, it may be the only way to see who has a shot. to manage such a diverse company and give them the chance to shine outside of their current comfort zones.

Internal CEO Promotion: 8-1 Odds

Perhaps the delay until 2026 is simply an opportunity for internal candidates to shine? After all, next year will be decisive for the company. Consider: Disney’s streaming entertainment content business needs to prove that it can be quite profitable; its film business needs to prove that this year’s turnaround is real; ESPN Set to Launch ‘Flagship’ Streaming Service; and Disney Parks must confirm that the downturn that began this year is short-lived as the company begins to unwind its $60 billion investment in the division. If one of the leaders excels in their performance, it could put them in first place.

Piezunka says Gorman and the board may also take a closer look at the criteria the next CEO should have, which could give an advantage to one or another internal candidate.

“For me, this is an interesting question: what are the criteria really? What should Disney’s next CEO really be good at? he says. “So the strategic question arises: are parks the future? Will the question be broadcast? Is managing these relationships with the stars the main benefit, so to speak? I think they’ll really think about what does this person actually need to be able to do?”

Invite an outsider to the post of CEO: chances are 10 to 1

The Disney culture is so distinctive…can an outsider manage it successfully? Is there anyone who is even capable of running a company like Disney without being from the inside? At the D23 conference in Anaheim in August, Iger was treated like a celebrity on the show floor as die-hard Disney fans sought selfies with the CEO, highlighting the unique role the job entails.

Disney’s succession committee, led by Gorman, says it continues to consider both internal and external candidates, suggesting the possibility still exists. The only external candidate to be leaked was NBA commissioner Adam Silver, who met with the board last year, but with a target date of 2026, candidates at other companies could become available with contract extensions coming up. Would NBCUniversal’s Donna Langley be interested, for example? What about Ted Sarandos? “I don’t even think about it,” he said at the WSJ Tech conference on October 22. It’s not really a refusal.

Netflix Approach: Co-Heads: 25 to 1 Odds

Netflix has two CEOs, why not Disney? Well, first of all, Netflix co-CEOs Sarandos and Greg Peters have very different areas of expertise and interests, and Sarandos says the “respect” they have for each other allows them to discuss decisions that need to be made at the CEO level. director. .

“It’s hard for me to recommend another company’s program where I don’t fully understand their business and in turn their business culture,” Sarandos said when asked about Disney’s appointment of co-CEOs.

However, for a company as multifaceted and diverse as Disney, the idea isn’t crazy. One CEO focused on the “creative engines” of film and TV studios (looking at you, Dana), while another focused on parks and entertainment operations (hi, Josh), focusing on areas such as ESPN, marketing, finance, etc. . divided between them might make some sense… if candidates are open to the idea of ​​getting a smaller job than Iger had. Although, as Wharton’s Piezunka notes, a co-CEO strategy “would almost run counter to Disney’s business model, which is always about integration.”

Bob Iger renews contract: odds 200-1

Iger’s shadow falls over the entire Disney succession drama. 20 years ago he took the top job in a dramatic public trial despite having no experience in all aspects of the business. But Capek’s decision is significant. Iger himself says he is conducting an autopsy on what went wrong. Iger has extended his contract so many times over the years that it is tempting to assume the board will soon want to do so again. But Gorman’s rise gives reason to think otherwise. “Does (Iger) have a second chance to do it right? I think that would be an interesting question: to what extent will James Gorman say, “You know what? I own the process,” says Piezunka. The company has two years to properly manage the succession, and despite Iger’s past extensions, there is every reason to believe that there will not be another extension. Iger, for his part, says he “definitely” plans to retire when his current contract expires.

Screw it, let’s sell or merge: odds 500-1

What if Gorman can’t find the right candidate to succeed Iger? Would a company that has always been a buyer consider… selling? It’s not completely crazy. In his 2019 autobiography Trip of a lifetimeIger suggested that a deal with Apple was something he had been thinking about.

“I believe that if Steve (Jobs) were still alive, we would merge our companies, or at least discuss the possibility very seriously,” Iger wrote. Of course, that was then, this is now. Apple and Disney are sworn enemies (partners on Vision Pro, but Disney has stopped the practice of allowing users to subscribe to the Disney+ app on iOS devices). And outside of big tech companies, there are very few buyers who could afford a company like Disney. As tempting as the exit may be, it seems just as unlikely since they extend beyond the Marvel multiverse.

TPPDisney betting odds: from likely to distant

2-1 Disney has finally released another one. Star wars a film that works thanks to The Mandalorian and Grogu.

5-1 Disney is partnering with an artificial intelligence company to support post-production as Wall Street favors companies that make AI deals.

40-1 Disney is introducing a new animated version of the MCU, seeing the success of Sony’s Spidey.

100-1 Disney is stopping releasing Disney+ subscriber data now that Netflix has paved the way.

4000-1 Disney is bringing back its Star Wars Battlestar Hotel and Experience, this time for 20 percent less.

This story first appeared in the October 30 issue of The Hollywood Reporter. To receive the magazine, click here to subscribe.