Investors Cheer Leadership Shakeup at Disney

In happier times. Bob Chapek (left) and Robert Iger at the 50th anniversary of Walt Disney World last year.Credit…Joe Burbank/Orlando Sentinel, via Associated Press

Iger in, Chapek out at Disney

Last December, Robert Iger told a Variety reporter he wasn’t second-guessing his departure from Disney after leading the entertainment giant on a 15-year run of growth and profits. Besides, he’d later acknowledge, Hollywood is going through an “age of great anxiety” with uncertainty at the box office and in the streaming wars.

Now, in a move that’s stunned Hollywood, Mr. Iger is back in the top job. Disney on Sunday night fired his handpicked successor, Bob Chapek, as C.E.O. The 71-year-old Iger has signed a two-year contract as his replacement. Jobs one and two for Mr. Iger: restore the company’s fortunes and groom a successor, meaning the “Game of Thrones”-like contest to find a replacement begins immediately.

The intrigue is where Iger may turn for the next leader, and what are his plans for Hulu, the streaming service in which Disney holds a majority stake. Dan Loeb, the activist investor, had been pushing Disney to combine Hulu with Disney+, the company’s own streaming service. Meanwhile on the succession front, Peter Rice, a top content chief at Disney, and Kevin Mayer, one of the architects behind the launch of Disney+, are no longer at the company. Will Iger try to bring them back?

Disney shares soared in premarket trading this morning, but are off by more than 40 percent this year. The stock is on its worst run since at least the 1970s, according to Bloomberg, tumbling by 22 percent under Mr. Chapek and wiping out roughly $35 billion in market cap.

Pressure has been building from activist investors, with Nelson Peltz’s Trian Fund Management joining Mr. Loeb’s Third Point in calling for big changes. (Mr. Peltz, though, doesn’t want Iger back, The Wall Street Journal reports. Reed Hastings, the co-C.E.O. of Netflix, meanwhile, wrote on Twitter that he wished Iger would have gotten out of Hollywood and instead run for president.) Mr. Iger had also seen enough, telling confidants that he was “devastated” by Disney’s decline, The Times’ Brooks Barnes reports.

Credit…The New York Times

Mr. Chapek’s tenure was marked by the pandemic and PR disasters. He took over Disney in February 2020, a few weeks before Covid-19 forced the company to shut down its theme parks. With people stuck at home, the company doubled down on Disney+, a strategy that worked well … until it didn’t.

On Nov. 8, Disney reported that quarterly losses at the unit had more than doubled to $1.5 billion and revenues missed expectations. Investors were mortified by Chapek’s sunny tone on a call following the results, and shares fell 12 percent the next day.

On the Hollywood front, Disney under Mr. Chapek was embroiled in a contentious pay dispute with the actress Scarlett Johansson, and Mr. Chapek fired his top TV content executive, Rice, sending a shock wave through the industry.

Chapek was also bruised by America’s culture wars, angering both employees and Ron DeSantis, the Republican governor of Florida, with his response to the Parental Rights in Education Act — or what critics call the “Don’t Say Gay” bill. Mr. Chapek sparked a staff uproar by not taking a public stand. When he eventually weighed in, it provoked a political backlash.

Mr. Iger had been away from the company for less than a year, having served as executive chairman through the end of 2021. He told Disney employees in an email of his “amazement” at being back. Just two months ago, he had joined Thrive Capital, the venture fund, as a partner, and the board of Genies Inc, a crypto avatar company. It’s unclear if he will remain at the companies.


European soccer teams drop Fifa protest threat. England, the Netherlands and other national teams abandoned plans to wear anti-discrimination armbands at the World Cup in Qatar, where homosexuality is a crime. The reversal is the latest controversy to hit an event beset by accusations of human rights abuses and corruption allegations.

Asian stocks fall on renewed Covid fears in China. The authorities imposed tough restrictions on a city near Beijing that was seen as a test case for the country’s easing of its strict pandemic policies. The moves followed the first reported Covid-related deaths since May and renew concerns that the world’s second-largest economy is not ready to lift restrictions and open up.

Elon Musk reinstates Twitter accounts of Donald Trump and Kanye West. The former president has not tweeted since Musk allowed him back. But the musician known as Ye posted “Shalom” on Sunday, after he was suspended from the platform last month for making antisemitic remarks that led to a sharp slide for his reputation and his earnings.

Lawmakers demand inquiry into Supreme Court leak allegation. Democratic lawmakers are calling for an investigation and tighter ethics rules for justices, after reports that a 2014 decision on contraception was disclosed in advance to anti-abortion activists.

FTX fallout spreads to crypto prices

Crypto assets are in the red again on Monday, with Bitcoin hovering around a two-year low, as investors grow increasingly jittery about the contagion risks from the collapse of FTX. Over the weekend, the failed crypto exchange, founded by Sam Bankman-Fried, revealed that its combined businesses owed a total of $3.1 billion to its top 50 creditors.

About half of that sum is owed to FTX’s top 10 creditors. The company submitted a redacted list to U.S. Bankruptcy Court on Saturday, but warned it could make further adjustments given the disastrous state of its record keeping. Little is known about who precisely is on that list. What’s known is that the list of FTX backers is vast and impressive, including the likes of BlackRock, Sequoia and the Ontario Teachers Pension Fund.

There is some good news for creditors. John Ray, the new FTX C.E.O. overseeing the bankruptcy, said that some entities, including FTX US, are solvent. He is reviewing assets and is preparing to sell or reorganize those businesses, to begin the process of paying back those it owes money. The company has also asked the court for permission to pay its remaining 330 employees, noting that they are quitting swiftly.

Crypto companies are in trouble, whether or not they have cut FTX ties. Shares in Silvergate Capital, a bank specializing in crypto assets, are down in premarket trading this morning, after halving in the past month. The company has issued a series of statements saying it has no loans outstanding to FTX or its founder. Shares in Coinbase, a rival crypto exchange, are off a further 5 percent in premarket, too, as investors sell risky assets connected to crypto.

Adding to investor worries: suspicious movements this weekend in FTX’s crypto assets. That triggered an alert from the blockchain research firm Chainalysis, warning that FTX may have been hit by another hacker attack, similar to one that occurred the previous weekend.

What is News Corp worth?

As special committees for both News Corp and Fox evaluate Rupert Murdoch’s proposal to recombine his two media properties, investors are pushing for a greater say in the matter.

The activist investor Irenic Capital Management says it may vote against the deal, according to a letter sent to News Corp on Sunday. Several News Corp investors, including a top 10 shareholder, also told DealBook that they remain unconvinced about the merits of a transaction.

The Murdochs call most — but not all — of the shots. The Murdoch Family Trust, which Murdoch controls with his eldest children, holds about 40 percent of the votes at the companies through Class B shares. A deal would require the approval of a majority of News Corp and Fox’s respective minority shareholders.

Irenic, which owns about 2 percent of the Class B shares, says any deal would most likely undervalue News Corp, and that its stock, which trades at $18 a share, could be worth $34. Unless Fox pays a lofty premium for the whole company, Irenic wants News Corp to instead explore spinning off its real estate business and its Dow Jones media business.

Mr. Murdoch has said he sees cost-saving and moneymaking opportunities from a merger. Greater scale could also bring advantages as the broader media sector consolidates, even though many of these deals have not withstood the deeper challenges facing the sector.

But some shareholders struggle to see the value of a combined company with such diverse businesses. “Does The Wall Street Journal gain by having Fox attached to it? That’s not obvious to me,” said Will Granger of Airlie Funds Management.

Exclusive: Blue states take E.S.G. fight to Congress

Democratic attorneys general in 17 states have accused their Republican counterparts of threatening their ability to fulfill a legal duty to investors to adhere to environmental, social and governance principles, adding further political tension to this booming area of investing.

DealBook got a first look at a letter, which the A.G.s will send to congressional leaders later on Monday. “Republican politicians are engaging in a dangerous misinformation campaign to influence how investment decisions are made,” Karl Racine, the District of Columbia attorney general, said in a statement.

Republican A.G.s have targeted asset managers and state pension funds. They argue that investors may be violating antitrust law by backing carbon reduction initiatives and have accused BlackRock, for example, of prioritizing “activism” over its fiduciary duty. Some state pension managers, including in Texas and Florida, have been ordered to adopt new models that ignore E.S.G.

The E.S.G. fight will play out in a divided Congress after the midterms. Executive agencies that are integrating climate risk into policy, like the S.E.C. and the Treasury, can expect a grilling at House hearings called by Republicans. Some powerful G.O.P. senators, including Chuck Grassley and Tom Cotton, have called for antitrust investigations into “climate cartels and other ill-advised ESG schemes,” and have warned asset managers’ legal advisers to prepare for document requests.

The dispute is over value and values. Those who oppose E.S.G. contend that the trend ignores investors’ financial interests in favor of ideology, although many investors say it is consistent with maximizing shareholder returns.

“A rigorous consideration of ESG factors to evaluate Value — the risk and reward of a potential investment — not Values — a subjective preference” benefits investors,” the Democratic A.G.s write.

Week ahead

This week kicks off both the World Cup — which started yesterday, and runs through Dec. 18 — and the traditional start to the holiday shopping season.

Tuesday: The Organization for Economic Cooperation and Development publishes its projections for the world economy. Earnings: Dollar Tree, Best Buy.

Wednesday: The Federal Reserve releases minutes from its November meeting, potentially signaling whether it intends to slow the pace of interest rate increases. Earnings: Deere.

Thursday: U.S. markets close for Thanksgiving. E.C.B. minutes from its October meeting.

Friday: Black Friday starts the most crucial shopping season for department stores and apparel retailers. The National Retail Federation expects holiday sales to grow 6 percent to 8 percent compared with last year, below the pace of inflation.



  • Revisiting AT&T’s $100 billion acquisition of Time Warner — why it may be the worst M&A deal ever. (NYT)

  • “Cigars, booze, money: How a lobbying blitz made sports betting ubiquitous.” (NYT)

  • Activist investor campaigns are on the rise. Meanwhile, the law firm Sidley warns that some tactics companies are using to ward off raiders might be going too far. (WSJ, Reuters)


  • COP27 ended with a deal to help poor countries’ pay for the damages caused by climate change, but no agreement on cutting emissions. (FT)

  • Spain is the latest European country to consider a windfall tax on banks, a move criticized by large lenders and the E.C.B. (FT)

  • Apple and Google’s app stores could become important arbiters in shaping content rules at Elon Musk’s Twitter. (NYT Opinion)

Best of the rest

  • A fun but slightly dystopian language has emerged on TikTok to evade content controls. (NYT)

  • Ben Affleck and Matt Damon have raised $100 million to start an independent film production company. (NYT)

  • Michael Bloomberg issued an apology for comments made at the Bloomberg New Economy Forum last week by Boris Johnson in which the former UK prime minister called China an autocracy. (Reuters)

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