In case you haven’t heard, there’s been a change in management at Disney (DIS). Bob Iger is stepping down as CEO and by all reports, his replacement Bob Chapek has big shoes to fill.
Really big shoes.
“I think the CEO of Disney is an impossible job,” Laura Martin, managing director and senior analyst at Needham & Co., told Yahoo Finance’s “On The Move” on Wednesday.
“It's a global brand that the CEO has to embody,” she said, adding that the CEO must channel “Walt Disney, the man.”
“The new Bob is going to have to follow in those footsteps. And if he doesn't have the personality that the old Bob Iger did, he won't create as much value through that type of personality that Bob Iger did,” Martin said.
As Iger moves on from his role as CEO, he will transition into the office of executive chairman through 2021 where he’ll focus on Disney’s creative strategy. Chapek, his successor, most recently served as chairman of Disney parks, experiences and products and is believed to be more cerebral and somewhat less charismatic than Iger.
Disney stock has gone from $23 per share to over $128 per share since October 2005 when Iger took the helm as CEO. Martin, a veteran analyst of the stock, is emphatic in her belief that Iger is irreplaceable. “So almost nobody could do what Bob Iger has done — like, nobody. Like, it doesn't even matter who you pick,” she said.
Personality that has created ‘enormous amounts of value’
Much of Iger’s success can be attributed to his ease of being the face of Disney and representing the brand. And his integrity, along with building relationships based on trust, are what led Disney into one of its most successful chapters yet, Martin said.
Iger transformed Disney into a media company with deals like Disney’s $7.4 billion acquisition of Pixar Animation Studios while eventually adding Lucasfilm and Marvel Entertainment for roughly $4 billion each. And in March 2019 Disney completed the $71 billion acquisition of 21st Century Fox along with launching the company’s streaming service Disney+ last December.
“I would say that Bob Iger's personality has created enormous amounts of value — like the fact he could get George Lucas to sell ‘Star Wars’ — Lucasfilm to him, or the fact that Steve Jobs was willing to sell Pixar to him. Bob Iger has created a lot of value because people — and Fox, Rupert Murdoch was willing to sell $70 billion of assets to Disney and take shares in return, and mandated that Bob stay longer.”
In the meantime Chapek will continue to report to Iger and will be appointed a seat on board of directors at a later date. One of the big challenges ahead for the new CEO will be to retain all of the “mission critical” executives in charge of Disney’s content and distribution, said Martin.
“Kevin Mayer [chairman of direct-to-consumer and international for Disney] is a really integral part of the streaming situation, and he needs to not lose Kevin Mayer as part of the organization. And similarly, he needs to not lose the Pixar and Marvel and ‘Star Wars’ teams as part of the team, because those are really the juggernauts for earnings in this company going forward.”
As Disney begins a new era, investors will be keeping a keen eye on the stock post-Iger.
“What's held the stock up is that Bob Iger has a 15-year track record of creating value. So people were giving him the benefit of the doubt. Now, with him not in charge of the day to day operations any longer, you're going to have EPS [earnings per share] under pressure still, but with a guy that's unproven in the top job, I think shares fall,” Martin said.
Yvette Killian is a producer for Yahoo Finance’s On The Move.