Why did the CEO of Disney get fired?

Why did the CEO of Disney get fired?

Business

Disney does not possess a reputation for impulsiveness. So when the news broke on Sunday night that Disney fired Chapek, Wall Street & the Entertainment world entered shock. Furthermore, the recently departed CEO, Iger, returned. Less than 3 years after his retirement.

Moreover, this firing occurred just 5 months after Disney CEO Chapek received a new 3 year contract extension.

So let’s start at the beginning of this saga.

Iger decides to retire in early 2020 after years of running up a higher Disney stock price. In addition, his hand-picked successor, Bob Chapek would succeed him. However, Chapek did not have Iger’s media background. He was a Disney Parks executive. He understood managing a business, not an empire.

Walt Disney at the grand opening of Disneyland. On July 17, 1955
Chapek’s first mistake was challenging Florida over their bill.

It doesn’t matter how big a company is. When 40% of your business resides in a state without an easy possibility of mobility. Do not pick a fight with your local government. Unfortunately, that is just what Chapek did. He challenged Florida & their family bill which caused terrible blowback and a less favorable tax treatment and oversight by Florida. A special situation only Disney enjoyed, which it has now lost.

Secondly, Chapek started a fight with a major movie star in Scarlett Johansonn.

The actress received a large portion of her contract royalties from her Disney movie via theater box office, which Chapek wanted to distribute via streaming and not movie theaters. As a result reducing Johanson’s payout. However, Chapek felt he could steam roll the actress and eventually lost coughing up a major settlement.

Thirdly, Disney’s costs are up, profits are down and the stock has performed terribly.

Wall Street lost faith in the Disney CEO. And without the backing of Wall Street it became only a matter of time before Chapek’s departure would manifest itself.

Business
Disney World’s Magic Kingdom. With Dan Cockerell. Fmr Director of the Park

Why did the CEO of Disney get fired?