It’s been a whirlwind of a time at the Walt Disney Company. On the evening of Sunday, November 20, Disney stunned fans everywhere when the announcement was made that CEO Bob Chapek was fired, effective immediately, and that former beloved Disney CEO Bob Iger would be returning to take the reins once again. Iger quickly released a statement, saying that he was humbled to return to the company he led for nearly 2 decades, and accepted the job with “humility”.
The news of Chapek’s sudden departure was a shock — but maybe not a disappointment –, as Disney’s Board of Directors just extended the Disney CEO’s contract by three years this past summer. Now, many are wondering what caused the sudden change of heart with the Board.
While we may never know, it is possible that the answer lies in Disney’s Fourth Quarter Earnings call.
Disney held its earnings call on November 8, 2022, and, even though Chapek tried to paint a pretty picture, analysts found the number lacking, not meeting Wall Street expectations. Bob Chapek excitedly said that Disney had earned a record $28 billion in profit and Disney+ had added 12 million subscribers that quarter — although it was still not profitable. Chapek and CFO Christine McCarthy stated that Disney+ was still on track to become profitable by 2024, which they have said before.
After the earnings report was made public, Disney’s stock took a nosedive, dropping nearly 15% in the two days following. Despite Disney’s massive profits, its stock was down more than 40% over the past year — meaning that investors’ confidence in the company was continuing to drop. Not long after praising Disney’s profits, Chapek announced a “targeted hiring freeze” at the company.
Not only was investor confidence waning, but so was Guest confidence. In the less than 3 years Chapek was in charge, nearly 70% of Guests said Disney had lost its magic. They were angry about ever-increasing prices, the dissolution of FastPass at both Disneyland Resort and Walt Disney World Resort, te introduction of Disney Genie+, the price hike of Disney+, and Chapek’s seemingly sole focus on profits. Chapek even earned himself nicknames like Bob Cheapek and Bob Paycheck.
In all probability, Disney’s Board of Directors will never make a public statement about what made them cut Chapek loose. However, insiders may choose to leak the choices that led to his termination sometime in the future.