Walt Disney executives staged a revolt against ousted boss Bob Chapek

Senior Walt Disney executives have led a rebellion against CEO Bob Chapek in recent weeks that, according to people familiar with the matter, resulted in his ousting and replacement by his predecessor, Bob Iger.

The covert campaign to overthrow Chapekwhich began in the summer, came after the outgoing chief executive lost the confidence of some members of his top team during a tumultuous 33 months at the helm of the media empire.

“A lot of people approached the board, Iger loyalists who felt marginalized,” said one person who knew the talks.

shares in Walt Disney Soared 6.3 percent on Monday as investors bet Iger, one of America’s most famous media executives, could boost morale and boost returns at the company’s expensive streaming unit. As of Monday afternoon, Iger had fired Kareem Daniel, a trusted ally of Chapek’s who led the group’s streaming strategy.

Disney executives began reaching out to the board, which Susan Arnold chairs, a few months ago to express concerns about Chapek’s leadership. Christine McCarthy, chief financial officer, was among the executives who complained, three of the people said. Disney declined to comment.

“[The board] didn’t know what to do,” added one person.

The final straw came with Disney’s painful earnings release on Nov. 8, in which Chapek reported that the company’s streaming business lost $1.5 billion in its most recent quarter. Three days later, Chapek announced the job cuts, telling employees in an email, “We’re going to have to make tough and uncomfortable decisions.”

Iger, who ran Disney for 15 years before leaving in 2021, stunned Hollywood Sunday night by agreeing to replace Chapek. Iger had selected Chapek to succeed him after receiving praise for his management of the Disney theme park division.

The changes at the top come after the company’s shares fell nearly 40 percent this year as Disney and others spent heavily to compete in streaming, a business that was costly and less profitable than cable TV or cinema.

Relations between the “two Bobs” quickly deteriorated as Iger resented Chapek’s handling of Disney’s creative output and his management reshuffle that introduced more centralized decision-making and strengthened Chapek’s allies.

The Arnold-brokered decision to rehire Iger came less than six months after Disney extended Chapek’s contract for another three years, quelling speculation about a possible exit. People close to Chapek said he became aware of the moves being made against him a few weeks ago but was surprised by the speed of events.

The abrupt dismissal entitles Chapek to a substantial payout. Under his old contract, he was entitled to an estimated $54 million in cash and stock in the event of an early termination at the end of 2021. The company has not released the full details of his recent deal.

Iger, 71, has agreed to stay for two years to help stabilize the ship and choose another successor.

Iger, who delayed his retirement four times before finally leaving the company, said in a memo to employees on Sunday that he was “a little surprised” that he was returning to the company.

With recession fears mounting, investors are increasingly concerned about the high cost of streaming, which has weighed on valuations of all major U.S. entertainment companies this year.

MoffettNathanson analysts expect Iger to “review” Disney’s streaming strategy.

Wells Fargo analyst Steven Cahall said, “While the announcement won’t solve all of Disney’s woes, we think investors will welcome it as it puts perhaps the best media leader at the helm with a mandate to shake things up.” ”

Additional reporting by Christopher Grimes in Los Angeles

*This story has been altered to clarify the timing of Arnold’s contacts with Iger

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