1
00:00:01,320 --> 00:00:05,120
Speaker 1: Welcome to Crash Course, a podcast about business, political, and

2
00:00:05,200 --> 00:00:08,600
Speaker 1: social disruption and what we can learn from it. I'm

3
00:00:08,640 --> 00:00:13,320
Speaker 1: Tim O'Brien. Today's crash Course Disney versus The Battle of

4
00:00:13,360 --> 00:00:18,239
Speaker 1: the Bob's Imagine Your Bob Iger. You relinquished Disney CEO

5
00:00:18,360 --> 00:00:23,960
Speaker 1: suite with a sterling legacy, intact, smart, game changing acquisitions,

6
00:00:24,239 --> 00:00:28,800
Speaker 1: a good culture, steady imaginative leadership, soaring profits and a

7
00:00:28,920 --> 00:00:31,840
Speaker 1: jumbo stock price and a sort of bet the ranch

8
00:00:31,920 --> 00:00:35,320
Speaker 1: move into streaming that puts profit making aside in favor

9
00:00:35,360 --> 00:00:39,240
Speaker 1: of reinventing the entertainment platform. Your entire business rests upon.

10
00:00:40,040 --> 00:00:43,080
Speaker 1: Paul is going swimmingly. When you turn things over to

11
00:00:43,120 --> 00:00:48,400
Speaker 1: your successor, Bob Jpeck, you title your autobiography The Ride

12
00:00:48,400 --> 00:00:52,920
Speaker 1: of a Lifetime, What a way to go? Then boom

13
00:00:53,080 --> 00:00:57,040
Speaker 1: covid Locktown's hit. Just weeks after you stepped down, Disney's

14
00:00:57,040 --> 00:01:01,760
Speaker 1: business sputters. J Peck alienates entire team and the board,

15
00:01:02,600 --> 00:01:06,800
Speaker 1: and that streaming bet unravels. What do you do? You

16
00:01:06,920 --> 00:01:09,480
Speaker 1: roll back in as CEO less than three years after

17
00:01:09,520 --> 00:01:13,839
Speaker 1: you left the company. J Peck is pushed out. How

18
00:01:13,880 --> 00:01:18,600
Speaker 1: often does something like that happen? Like? Never? Even Steve

19
00:01:18,680 --> 00:01:21,120
Speaker 1: Jobs waited eleven years to make his round trip as

20
00:01:21,120 --> 00:01:25,000
Speaker 1: Apple CEO. Wow, there are a lot of collisions to

21
00:01:25,040 --> 00:01:27,760
Speaker 1: sort out here. I sort of imagine Mickey Mouse at

22
00:01:27,760 --> 00:01:29,680
Speaker 1: the Disney bar having a bunch of drinks at the

23
00:01:29,760 --> 00:01:31,959
Speaker 1: end of the day because it's all been so crazy.

24
00:01:32,080 --> 00:01:34,720
Speaker 1: And that's why I invited my pal, Beth Coit of

25
00:01:34,760 --> 00:01:38,000
Speaker 1: Bloomberg Opinion to join me today. I've had the pleasure

26
00:01:38,000 --> 00:01:40,280
Speaker 1: of getting a no Bets work. She's one of the

27
00:01:40,319 --> 00:01:44,480
Speaker 1: best analysts of the financial and business landscape, and I

28
00:01:44,520 --> 00:01:47,360
Speaker 1: can't think of anybody better to help me think through

29
00:01:47,400 --> 00:01:51,360
Speaker 1: this mess, this very interesting mess, than that. So thanks, Beth,

30
00:01:51,880 --> 00:01:54,600
Speaker 1: thanks for having me. I'm thrilled. So, Beth, let's start

31
00:01:54,600 --> 00:01:58,280
Speaker 1: with an overview. You know how good was Bob Iger.

32
00:01:58,320 --> 00:02:00,760
Speaker 1: You've been watching him for a fairly long time in

33
00:02:00,840 --> 00:02:04,880
Speaker 1: the whole sort of pantheon of American business CEOs where

34
00:02:04,920 --> 00:02:07,560
Speaker 1: you put him. He's an iconic CEO. He was at

35
00:02:07,600 --> 00:02:11,440
Speaker 1: Disney for fifteen years in that role. He's one of

36
00:02:11,520 --> 00:02:14,400
Speaker 1: those guys that's sort of synonymous with his brand. So

37
00:02:14,440 --> 00:02:17,040
Speaker 1: I think people really looked at him and thought that,

38
00:02:17,120 --> 00:02:19,480
Speaker 1: you know, he is kind of the model of what

39
00:02:20,080 --> 00:02:23,600
Speaker 1: a brand like Disney needs. I think his reputation has

40
00:02:23,600 --> 00:02:27,640
Speaker 1: been tarnished though by this really failed CEO. Slowdown, you're

41
00:02:27,639 --> 00:02:30,400
Speaker 1: already the show, slow down from it. I mean, this

42
00:02:30,480 --> 00:02:33,600
Speaker 1: is a guy who started out as a weatherman, that's right,

43
00:02:33,800 --> 00:02:37,120
Speaker 1: Like he's a profoundly self made person. He is. And

44
00:02:37,200 --> 00:02:39,639
Speaker 1: I think one thing that's really interesting to me and

45
00:02:39,680 --> 00:02:42,320
Speaker 1: this whole narrative, is that a lot of people never

46
00:02:42,360 --> 00:02:44,639
Speaker 1: thought he should be CEO of Disney. He really had

47
00:02:44,680 --> 00:02:46,680
Speaker 1: to fight for that job. He had a sort of

48
00:02:46,720 --> 00:02:49,919
Speaker 1: troubled step into the CEO role. So the fact that

49
00:02:50,160 --> 00:02:53,600
Speaker 1: we're seeing this happen again, it's kind of telling that

50
00:02:53,639 --> 00:02:55,919
Speaker 1: he didn't make sure his successor didn't slid in there

51
00:02:55,919 --> 00:02:58,760
Speaker 1: easily exactly. I mean, he went from weatherman to ABC

52
00:02:58,919 --> 00:03:02,079
Speaker 1: where he's fetching cough for people, that's right, and eventually

53
00:03:02,120 --> 00:03:04,200
Speaker 1: got managerial roles and it turned out he was a

54
00:03:04,280 --> 00:03:07,800
Speaker 1: natural manager. And then he comes into Disney in the

55
00:03:07,800 --> 00:03:11,400
Speaker 1: Eisner era that's right, through an acquisition. ABC was acquired

56
00:03:11,400 --> 00:03:15,840
Speaker 1: by Disney in the nineties. Came in that way to people, guys,

57
00:03:16,520 --> 00:03:19,920
Speaker 1: and he was Eisner's right hand guy, and everyone just

58
00:03:20,000 --> 00:03:22,520
Speaker 1: sort of saw him during that period as a nice

59
00:03:22,520 --> 00:03:25,320
Speaker 1: guy who could never lead a company like Disney exactly,

60
00:03:25,440 --> 00:03:28,320
Speaker 1: and then lo and behold, he led a company like Disney.

61
00:03:28,440 --> 00:03:30,840
Speaker 1: How did that happen? I think part of it was

62
00:03:30,880 --> 00:03:33,600
Speaker 1: that he did have to fight for the job. So again,

63
00:03:33,639 --> 00:03:36,680
Speaker 1: no one really expected that he would be CEO. He

64
00:03:36,800 --> 00:03:40,520
Speaker 1: was the internal candidate, the board was looking outside as well,

65
00:03:41,200 --> 00:03:43,440
Speaker 1: and it was not a given, and he fought for

66
00:03:43,480 --> 00:03:45,720
Speaker 1: the role. He got it, and he immediately came in.

67
00:03:45,760 --> 00:03:48,360
Speaker 1: I mean one of his first moves as CEO was

68
00:03:48,400 --> 00:03:50,560
Speaker 1: buying Pixar. So all of a sudden, this guy that

69
00:03:50,600 --> 00:03:53,640
Speaker 1: had sort of been plotting along, you know, doing Michael

70
00:03:53,760 --> 00:03:57,360
Speaker 1: Eisner's bidding, now has these really visionary ideas for how

71
00:03:57,400 --> 00:04:00,720
Speaker 1: to change and transform this brand. And did that surprised

72
00:04:00,720 --> 00:04:02,839
Speaker 1: people who had written him off as this kind of

73
00:04:03,800 --> 00:04:08,440
Speaker 1: you know, good lieutenant quasi water boy, x weather Man,

74
00:04:08,720 --> 00:04:11,360
Speaker 1: et cetera. Once he got that seat, did he begins

75
00:04:11,400 --> 00:04:13,680
Speaker 1: surprising people right away with what he was capable of?

76
00:04:13,840 --> 00:04:15,160
Speaker 1: I think he did. I think he did. I mean,

77
00:04:15,280 --> 00:04:17,960
Speaker 1: he really transformed this company. So Pixar is the big one,

78
00:04:18,600 --> 00:04:22,200
Speaker 1: first big one, then marvel In, Lucasfilms. I mean, by

79
00:04:22,200 --> 00:04:24,280
Speaker 1: the time he left, this was a completely different place.

80
00:04:24,360 --> 00:04:27,520
Speaker 1: Than when he started, and could have another CEO have

81
00:04:27,560 --> 00:04:30,560
Speaker 1: done that, I don't think so. I think it really

82
00:04:30,680 --> 00:04:33,039
Speaker 1: must have taken a lot of confidence in this vision.

83
00:04:33,080 --> 00:04:36,480
Speaker 1: I mean, at the time, he was criticized for overpaying

84
00:04:36,560 --> 00:04:39,719
Speaker 1: for these deals that turned out to be extremely lucrative

85
00:04:39,720 --> 00:04:41,520
Speaker 1: for the company. You know, he paid a couple billion

86
00:04:41,680 --> 00:04:43,680
Speaker 1: for each of them. And then let's pause on each

87
00:04:43,680 --> 00:04:45,520
Speaker 1: of those from a minute. I mean, Pixar was a

88
00:04:45,520 --> 00:04:49,839
Speaker 1: cool deal. Pixar was Steve Jobs animation studio. Right. It

89
00:04:49,960 --> 00:04:52,760
Speaker 1: was this baby he had built when he first left Apple,

90
00:04:53,240 --> 00:04:56,040
Speaker 1: and he hung onto it. He was the company's biggest shareholder.

91
00:04:56,480 --> 00:05:00,040
Speaker 1: He didn't want other people to come in and acquire it.

92
00:05:00,160 --> 00:05:02,599
Speaker 1: And yet I was able to do that. He was

93
00:05:02,640 --> 00:05:05,520
Speaker 1: able to win Jobs as confidence, right, Yes, and it

94
00:05:05,600 --> 00:05:07,640
Speaker 1: was a big one because Jobs and I did not

95
00:05:07,720 --> 00:05:10,320
Speaker 1: get along. So Iger was sort of able to change

96
00:05:10,320 --> 00:05:13,760
Speaker 1: his mind on Disney. I mean, that's something about Bob Iger.

97
00:05:13,839 --> 00:05:16,120
Speaker 1: He is a real statesman, right, He knows how to

98
00:05:16,160 --> 00:05:19,240
Speaker 1: work with people, talk to people. He's authentic. He's authentic,

99
00:05:19,720 --> 00:05:21,960
Speaker 1: and so he and Steve Jobs had a real relationship.

100
00:05:22,160 --> 00:05:24,560
Speaker 1: He ended up on the Apple board. I think they

101
00:05:24,600 --> 00:05:26,760
Speaker 1: were real friends. They were deep friends. I think by

102
00:05:26,760 --> 00:05:29,240
Speaker 1: the end of Jobs his life, they both would say that,

103
00:05:29,360 --> 00:05:31,400
Speaker 1: and I think I felt a loss when Jobs died.

104
00:05:32,040 --> 00:05:34,680
Speaker 1: He also did Marvel, like he recognized the value of

105
00:05:34,680 --> 00:05:37,960
Speaker 1: a superhero franchise in movie theaters, which my two boys

106
00:05:37,960 --> 00:05:40,360
Speaker 1: can both attest to the importance of Exactly. I don't

107
00:05:40,360 --> 00:05:42,080
Speaker 1: want to be too gendered, but I think that part

108
00:05:42,120 --> 00:05:44,080
Speaker 1: of this was how do we bring in more of

109
00:05:44,080 --> 00:05:46,120
Speaker 1: a male audience too, So that was Marvel. I think

110
00:05:46,120 --> 00:05:48,480
Speaker 1: that was lucasfilm so and the idea of tent pole

111
00:05:48,560 --> 00:05:51,000
Speaker 1: movies exactly you could put out in the summer and

112
00:05:51,040 --> 00:05:53,960
Speaker 1: earned bazillions of dollars that would fund other things. Right,

113
00:05:53,960 --> 00:05:56,800
Speaker 1: So it's a system. I mean, Disney such a vast landscape, right,

114
00:05:56,800 --> 00:05:59,760
Speaker 1: it's the entertainment piece, it's the parks. It takes a

115
00:05:59,760 --> 00:06:01,840
Speaker 1: cert and kind of person that can figure out how

116
00:06:01,880 --> 00:06:06,880
Speaker 1: all these components fit. Parks, animation, movies, TV. That's a

117
00:06:06,880 --> 00:06:10,240
Speaker 1: lot to juggle. And then he caps that off with

118
00:06:10,279 --> 00:06:14,159
Speaker 1: a massive, massive acquisition of twentieth Century Fox, right, which

119
00:06:14,200 --> 00:06:16,600
Speaker 1: is also criticized for overpaying for What do you think

120
00:06:16,640 --> 00:06:19,400
Speaker 1: did you overpay for them? I think it's too soon

121
00:06:19,440 --> 00:06:22,320
Speaker 1: to tell, because again, like he was criticized early on

122
00:06:22,440 --> 00:06:25,440
Speaker 1: for overpaying for these other deals, which turned out to

123
00:06:25,600 --> 00:06:28,400
Speaker 1: be bargains in the end. I mean, we'll get to this,

124
00:06:28,480 --> 00:06:31,320
Speaker 1: I think, but part of this is this acquisition is

125
00:06:31,360 --> 00:06:34,239
Speaker 1: really tied to his bed on streaming. He needed content

126
00:06:34,560 --> 00:06:37,680
Speaker 1: and this was the fastest way to get it. So

127
00:06:37,800 --> 00:06:39,840
Speaker 1: for folks out there that wonder what is this thing

128
00:06:39,880 --> 00:06:42,839
Speaker 1: called streaming, let's tell people what streaming is, just for

129
00:06:42,880 --> 00:06:45,400
Speaker 1: a minute, because it's just a fancy word for something

130
00:06:45,440 --> 00:06:49,599
Speaker 1: that's obvious right right. Streaming is watching shows on your

131
00:06:49,760 --> 00:06:53,480
Speaker 1: computer like you're doing right now, right on your timeline,

132
00:06:53,839 --> 00:06:57,000
Speaker 1: rather than on the cable schedule. And that's a threat

133
00:06:57,040 --> 00:07:01,479
Speaker 1: to traditional TV because it's not appointment based and it's

134
00:07:01,560 --> 00:07:04,800
Speaker 1: not dependent on a broadcast network. Right. It means there

135
00:07:04,839 --> 00:07:07,000
Speaker 1: can be so much more content out there, which also

136
00:07:07,200 --> 00:07:12,200
Speaker 1: disrupts the advertising model. It really is scary to a

137
00:07:12,280 --> 00:07:14,520
Speaker 1: lot of these legacy companies in terms of how it

138
00:07:14,600 --> 00:07:17,440
Speaker 1: changes their model. And if you're running a legacy company,

139
00:07:17,480 --> 00:07:22,160
Speaker 1: I guess the scariest monster in that mix is Netflix. Right,

140
00:07:22,160 --> 00:07:24,559
Speaker 1: They're all sitting back, glush and happy on their riches

141
00:07:24,600 --> 00:07:28,520
Speaker 1: and their content, and in walks a disruptor Netflix, which

142
00:07:28,600 --> 00:07:32,560
Speaker 1: completely changes how people view media. Yeah, and Disney initially

143
00:07:32,600 --> 00:07:35,000
Speaker 1: partnered with them early on. They were putting out a

144
00:07:35,000 --> 00:07:37,920
Speaker 1: lot of their content on Netflix, and then I think

145
00:07:37,920 --> 00:07:41,120
Speaker 1: Iger decides. I think he said something to the effect

146
00:07:41,120 --> 00:07:44,440
Speaker 1: of we're giving nuclear weapons to a third world country

147
00:07:44,440 --> 00:07:46,640
Speaker 1: and now they're using them against us. So he stops.

148
00:07:46,640 --> 00:07:48,440
Speaker 1: He said, We're not going to do this anymore. And

149
00:07:48,480 --> 00:07:50,400
Speaker 1: that's I think when he realized, Okay, we need to

150
00:07:50,440 --> 00:07:55,920
Speaker 1: build our own streaming service. So we're other executives responding

151
00:07:56,000 --> 00:08:01,360
Speaker 1: to this disruptive technology moment in the same way, making

152
00:08:01,400 --> 00:08:04,080
Speaker 1: a decision that we need to be in this business.

153
00:08:04,320 --> 00:08:07,280
Speaker 1: It doesn't matter if it pays off, We're going to

154
00:08:07,440 --> 00:08:10,840
Speaker 1: throw in and make it go Over this, I think

155
00:08:10,920 --> 00:08:14,200
Speaker 1: Disney was really the first traditional media company to do that.

156
00:08:14,400 --> 00:08:16,880
Speaker 1: It was before I would say really tech companies, and

157
00:08:16,960 --> 00:08:20,440
Speaker 1: mostly has been tech companies that are upstarts. Really can't

158
00:08:20,440 --> 00:08:25,520
Speaker 1: think of that many Amazon exactly. There's not many legacy

159
00:08:25,560 --> 00:08:28,920
Speaker 1: traditional media companies that have done this successfully. And that's

160
00:08:28,920 --> 00:08:31,800
Speaker 1: not because they're stupid, and it's not because they're unimaginative.

161
00:08:32,080 --> 00:08:35,000
Speaker 1: It's because they're already harvesting a lot of money from

162
00:08:35,040 --> 00:08:39,040
Speaker 1: their traditional businesses. That streaming would threaten. Whereas Amazon and

163
00:08:39,080 --> 00:08:41,400
Speaker 1: Apple are coming into it with a clean slate. They

164
00:08:41,400 --> 00:08:43,839
Speaker 1: don't have a legacy movie business, they don't have a

165
00:08:43,920 --> 00:08:47,480
Speaker 1: legacy TV business, so it's easier for them to embrace it.

166
00:08:48,080 --> 00:08:50,240
Speaker 1: And it's sort of a rounding error to a certain

167
00:08:50,280 --> 00:08:53,280
Speaker 1: extent among all of their businesses, right, And so I mean,

168
00:08:53,320 --> 00:08:55,240
Speaker 1: if you put it that way, it also I think,

169
00:08:55,280 --> 00:08:58,800
Speaker 1: put some perspective what a big deal it was for

170
00:08:59,000 --> 00:09:01,480
Speaker 1: Disney to decide to do this right, actually disrupt its

171
00:09:01,520 --> 00:09:04,679
Speaker 1: model and say, Okay, this is where the future is

172
00:09:04,720 --> 00:09:06,360
Speaker 1: and we need to go here. And you know, a

173
00:09:06,360 --> 00:09:08,920
Speaker 1: lot of legacy businesses haven't been able to do that

174
00:09:08,960 --> 00:09:12,240
Speaker 1: because the managers don't have enough trust within the organization

175
00:09:12,679 --> 00:09:16,319
Speaker 1: or from their board or from investors to just say

176
00:09:16,360 --> 00:09:18,240
Speaker 1: we're doing this. It may not make sense in the

177
00:09:18,320 --> 00:09:21,040
Speaker 1: short term, but we think it's where we need to

178
00:09:21,040 --> 00:09:23,200
Speaker 1: be in the long term. And I had the credit

179
00:09:23,600 --> 00:09:25,840
Speaker 1: I was able to do that, which is unusual. It

180
00:09:26,000 --> 00:09:28,440
Speaker 1: is it is I think at that point he placed

181
00:09:28,480 --> 00:09:31,040
Speaker 1: all these bets that had really paid off. So his

182
00:09:31,200 --> 00:09:34,400
Speaker 1: board Wall Street trusted him to figure it out. And

183
00:09:34,440 --> 00:09:37,480
Speaker 1: do you think he figured it out because he was insightful,

184
00:09:37,600 --> 00:09:41,400
Speaker 1: because he was paranoid because he recognized the change all

185
00:09:41,440 --> 00:09:43,840
Speaker 1: of the above. Was there a single factor? Is it

186
00:09:43,920 --> 00:09:46,160
Speaker 1: too hard to know? Well? I think one caveat is

187
00:09:46,559 --> 00:09:48,400
Speaker 1: has he figured it out right? I mean, this is

188
00:09:48,400 --> 00:09:50,640
Speaker 1: a big question mark. I think in streaming in general,

189
00:09:51,240 --> 00:09:54,480
Speaker 1: is the model really established, especially for a company like Disney.

190
00:09:54,520 --> 00:09:57,480
Speaker 1: But he was clearly inspired by something to do it. Yes,

191
00:09:57,840 --> 00:10:00,600
Speaker 1: And what do you think the inspirational fact there was?

192
00:10:00,600 --> 00:10:03,520
Speaker 1: Was he I'm freaked out? Was he I can't wait

193
00:10:03,520 --> 00:10:06,839
Speaker 1: to do this? Or was he this just makes sense

194
00:10:06,880 --> 00:10:08,480
Speaker 1: and we're going to do it regardless. I think it

195
00:10:08,559 --> 00:10:10,560
Speaker 1: was probably a little all the above. I think, you know,

196
00:10:10,640 --> 00:10:14,559
Speaker 1: maybe watching Netflix grow and say, wait a second, are

197
00:10:14,600 --> 00:10:18,000
Speaker 1: these guys really are allies or our competitors here? And

198
00:10:18,080 --> 00:10:20,760
Speaker 1: we need to figure out how to get into this

199
00:10:20,960 --> 00:10:22,720
Speaker 1: in a way where we're just sort of disrupting our

200
00:10:22,760 --> 00:10:26,120
Speaker 1: own business rather than letting Netflix do it. I think

201
00:10:26,120 --> 00:10:28,439
Speaker 1: it's cool that he did that. You know, but it's

202
00:10:28,440 --> 00:10:32,040
Speaker 1: not my money and it's not my company. But I

203
00:10:32,080 --> 00:10:35,520
Speaker 1: always think it's pretty amazing when people in an industry

204
00:10:35,480 --> 00:10:38,000
Speaker 1: in which they're already making tons and tons of money

205
00:10:38,520 --> 00:10:41,359
Speaker 1: say we have to make a change, even if it

206
00:10:41,360 --> 00:10:42,920
Speaker 1: bumps up against what we want to do in the

207
00:10:42,920 --> 00:10:45,440
Speaker 1: short term. Yeah, I mean it was pretty shocking at

208
00:10:45,480 --> 00:10:48,839
Speaker 1: the time. It's surprised people. I think this was when

209
00:10:48,920 --> 00:10:50,480
Speaker 1: he said we're going to do this, and I think

210
00:10:50,520 --> 00:10:53,040
Speaker 1: people were taken aback that this was the direction the

211
00:10:53,040 --> 00:10:55,280
Speaker 1: company was going to go in. So we'll come back

212
00:10:55,280 --> 00:10:57,680
Speaker 1: of that later to talk about how that that played out.

213
00:10:58,400 --> 00:11:01,000
Speaker 1: What do you think, essentially, we're the components of him

214
00:11:01,040 --> 00:11:03,240
Speaker 1: trying to solve the streaming problem. What were the things

215
00:11:03,280 --> 00:11:06,360
Speaker 1: he put in place to do that? So I think

216
00:11:06,480 --> 00:11:09,880
Speaker 1: the big thing was launching Disney Plus, which is Disney's

217
00:11:10,040 --> 00:11:13,679
Speaker 1: streaming service, and this goes back to this acquisition of Fox,

218
00:11:13,800 --> 00:11:16,000
Speaker 1: which was we need content, right, we have to put

219
00:11:16,000 --> 00:11:19,480
Speaker 1: content on this service so people will buy it, and

220
00:11:20,600 --> 00:11:22,880
Speaker 1: so that is sort of the fundamental reason for this deal.

221
00:11:23,840 --> 00:11:28,800
Speaker 1: I think what happened here is Disney priced Disney Plus

222
00:11:28,840 --> 00:11:34,480
Speaker 1: well under Netflix, so it had sort of tremendous subscriber growth.

223
00:11:34,800 --> 00:11:36,880
Speaker 1: But then the profit this is again you know, the

224
00:11:36,920 --> 00:11:39,520
Speaker 1: profitability issue is a big one, and so they've not

225
00:11:39,640 --> 00:11:42,960
Speaker 1: quite figured that piece of it out. So I had

226
00:11:43,000 --> 00:11:46,720
Speaker 1: a great run at Disney. He did disruptive things, and

227
00:11:46,760 --> 00:11:48,880
Speaker 1: then he decided to go. We're going to talk more

228
00:11:48,880 --> 00:11:51,360
Speaker 1: about that in the second bath. When we get back

229
00:11:51,400 --> 00:11:54,280
Speaker 1: from the break, we'll talk about his departure and his

230
00:11:54,400 --> 00:12:03,360
Speaker 1: successor we'll be right back. So, Boby, you're sixty nine

231
00:12:03,440 --> 00:12:07,120
Speaker 1: years old. He has every accolade you could want, tons

232
00:12:07,160 --> 00:12:09,640
Speaker 1: and tons of stock. The guy who grew up in

233
00:12:09,640 --> 00:12:12,920
Speaker 1: a modest circumstances on Long Island is now a multi

234
00:12:12,960 --> 00:12:18,319
Speaker 1: millionaire in Weatherman, nice houses, a yacht, all the good things,

235
00:12:19,160 --> 00:12:22,800
Speaker 1: and he decides to go. And I find that really intriguing.

236
00:12:22,840 --> 00:12:25,720
Speaker 1: I don't know how many people just decide to pull

237
00:12:25,760 --> 00:12:27,840
Speaker 1: the plug at the top of the game. Now he

238
00:12:27,880 --> 00:12:32,000
Speaker 1: was sixty nine, he's four years past a standard retirement age.

239
00:12:32,280 --> 00:12:34,680
Speaker 1: But he gave an interview to see NBC that I

240
00:12:34,679 --> 00:12:38,000
Speaker 1: thought was very interesting when he talks about what inspired

241
00:12:38,080 --> 00:12:41,199
Speaker 1: him to move on. Here's a SoundBite. I will say

242
00:12:41,240 --> 00:12:46,280
Speaker 1: that over time, I think I started listening less than

243
00:12:46,360 --> 00:12:49,520
Speaker 1: maybe with a little less tolerance of other people's opinions,

244
00:12:49,960 --> 00:12:52,160
Speaker 1: maybe because of getting a little bit more over confident

245
00:12:52,200 --> 00:12:54,480
Speaker 1: in my own, which is sometimes what happens when you

246
00:12:54,520 --> 00:12:58,040
Speaker 1: get built up. You know, in some form or another,

247
00:12:58,200 --> 00:13:01,360
Speaker 1: is you know something special, are great or whatever. That

248
00:13:01,440 --> 00:13:03,520
Speaker 1: was mindful of that, so I became a little bit

249
00:13:03,520 --> 00:13:06,600
Speaker 1: more dismissive of descent and other people's opinions than I

250
00:13:06,640 --> 00:13:08,959
Speaker 1: should have been. And that was that that was an

251
00:13:08,960 --> 00:13:11,680
Speaker 1: early sign that it was time. It wasn't the reason

252
00:13:11,760 --> 00:13:14,520
Speaker 1: I left, but it was a contributing fact. You know.

253
00:13:14,600 --> 00:13:16,800
Speaker 1: I find that really interesting. I think I think most

254
00:13:16,800 --> 00:13:20,319
Speaker 1: people aren't self aware. I think most people don't admit

255
00:13:20,360 --> 00:13:24,040
Speaker 1: to their faults, but I think more average people do

256
00:13:24,120 --> 00:13:27,840
Speaker 1: it than CEOs. I think CEOs have a vested interest

257
00:13:28,000 --> 00:13:31,720
Speaker 1: in being godlike and that comes with a lack of

258
00:13:31,760 --> 00:13:36,480
Speaker 1: self awareness. And I found what Iger said about that

259
00:13:36,480 --> 00:13:38,800
Speaker 1: that I need to listen more, and I wasn't listening enough,

260
00:13:38,880 --> 00:13:41,320
Speaker 1: so I decided to leave. Interesting. But I wonder if

261
00:13:41,360 --> 00:13:43,360
Speaker 1: you have a different take. I was struck by that too.

262
00:13:43,400 --> 00:13:46,320
Speaker 1: I heard that interview. It's pretty honest. You don't hear

263
00:13:46,679 --> 00:13:50,760
Speaker 1: many people say that, and as you said, especially CEOs.

264
00:13:50,840 --> 00:13:52,920
Speaker 1: And I think that maybe was part of his magic

265
00:13:52,960 --> 00:13:55,160
Speaker 1: that he knew how to listen to people and give

266
00:13:55,160 --> 00:13:59,960
Speaker 1: them space, let them be experts, and that was happening less.

267
00:14:00,160 --> 00:14:02,240
Speaker 1: Maybe he was starting to feel like the smartest guy

268
00:14:02,240 --> 00:14:04,240
Speaker 1: in the room all the time, and that's the dangerous

269
00:14:04,720 --> 00:14:07,800
Speaker 1: place to be well, and that's kind of an interesting segue,

270
00:14:07,800 --> 00:14:10,440
Speaker 1: and I think what might have separated him from Bob

271
00:14:10,520 --> 00:14:14,000
Speaker 1: Jpeck in terms of their different makeups as managers. But

272
00:14:14,440 --> 00:14:16,800
Speaker 1: before we get to that, I'm really curious as to

273
00:14:16,920 --> 00:14:21,440
Speaker 1: how Tiger and Disney landed on Chapeck to begin with

274
00:14:21,600 --> 00:14:26,160
Speaker 1: as his successor. How did that happen? So, yes, Tiger

275
00:14:26,240 --> 00:14:28,400
Speaker 1: says this that this is one of the reasons he left,

276
00:14:28,400 --> 00:14:30,720
Speaker 1: But there's been a lot of discussion for many years

277
00:14:30,800 --> 00:14:34,640
Speaker 1: about his succession and his departure. I think ultimately delayed

278
00:14:34,680 --> 00:14:38,040
Speaker 1: his retirement four times before he ultimately left, And there

279
00:14:38,080 --> 00:14:40,600
Speaker 1: was always a reason, you know, maybe the person that

280
00:14:40,640 --> 00:14:44,040
Speaker 1: they thought was gonna succeed him left the company that

281
00:14:44,200 --> 00:14:46,160
Speaker 1: wasn't the right time because he'd just done this deal

282
00:14:46,240 --> 00:14:48,280
Speaker 1: and needed to integrate it. So there was always a reason.

283
00:14:48,960 --> 00:14:52,720
Speaker 1: But I think part of what happened was some possible

284
00:14:52,720 --> 00:14:56,160
Speaker 1: CEO candidates left the company because maybe they started to wonder,

285
00:14:56,240 --> 00:14:59,080
Speaker 1: is this guy ever going to really go? So we

286
00:14:59,120 --> 00:15:02,760
Speaker 1: see a lot of strong candidates leave cheap sort of

287
00:15:02,800 --> 00:15:05,600
Speaker 1: similar to I. I mean, he's been at the company

288
00:15:05,600 --> 00:15:08,400
Speaker 1: a long time. Was one of his lieutenants. He ran

289
00:15:08,480 --> 00:15:11,720
Speaker 1: the park's business was much more sort of considered an

290
00:15:11,720 --> 00:15:15,720
Speaker 1: operations guy, a numbers guy. And so when Iger ultimately

291
00:15:16,080 --> 00:15:19,320
Speaker 1: decides now is the time for me to go, sort

292
00:15:19,360 --> 00:15:22,640
Speaker 1: of the obvious candidate boys. So I've got a couple

293
00:15:22,680 --> 00:15:24,720
Speaker 1: of thoughts on that. One is I sort of think

294
00:15:24,760 --> 00:15:28,600
Speaker 1: it's this weird survival tactic that a lot of CEOs used,

295
00:15:28,600 --> 00:15:31,080
Speaker 1: which is just to say I don't have a successor.

296
00:15:31,400 --> 00:15:34,360
Speaker 1: I am the only possible person who can run this company. Therefore, Board,

297
00:15:34,640 --> 00:15:37,320
Speaker 1: you can't fire me. And we see this in corporate

298
00:15:37,360 --> 00:15:41,040
Speaker 1: America all the time. They're supposed to be good about planning,

299
00:15:41,320 --> 00:15:44,360
Speaker 1: they're supposed to be thinking ahead, but of course people

300
00:15:44,400 --> 00:15:46,800
Speaker 1: also like running things, and they like the jet. Iger

301
00:15:46,920 --> 00:15:50,480
Speaker 1: said he loved the jet, the Disney jet, and their

302
00:15:50,480 --> 00:15:55,520
Speaker 1: compensation is spectacular, and they're the coolest guys in their industries.

303
00:15:56,000 --> 00:15:58,040
Speaker 1: So sometimes they don't leave in a way they ensure

304
00:15:58,080 --> 00:16:01,360
Speaker 1: that is by not naming and be a successor. So

305
00:16:01,480 --> 00:16:03,840
Speaker 1: let's talk about that for a minute. Do you think

306
00:16:03,840 --> 00:16:06,800
Speaker 1: the fact that a successor didn't emerge at Disney was

307
00:16:06,840 --> 00:16:11,520
Speaker 1: by design? It was probably more subconscious than intentional, Because

308
00:16:11,600 --> 00:16:14,080
Speaker 1: he's a smart guy. I think he knows it's probably

309
00:16:14,120 --> 00:16:16,480
Speaker 1: a tint on his legacy in the long term. But

310
00:16:16,560 --> 00:16:18,720
Speaker 1: I do think there is really something to what you're saying.

311
00:16:18,760 --> 00:16:25,120
Speaker 1: He's charismatic guy, big strategic thinker, has a vision. Perhaps

312
00:16:25,200 --> 00:16:28,200
Speaker 1: it's threatening to bring in someone else that also has

313
00:16:28,240 --> 00:16:30,080
Speaker 1: a vision, and there's a charismatic guy. I mean, does

314
00:16:30,120 --> 00:16:33,040
Speaker 1: he really want to be overshadowed? So that's definitely a

315
00:16:33,120 --> 00:16:37,120
Speaker 1: theory that I've seen floated. You buy it, Yeah, I do.

316
00:16:38,120 --> 00:16:40,120
Speaker 1: It's sort of like the president, right, you get to

317
00:16:40,200 --> 00:16:42,040
Speaker 1: that spot because you have an ego. I think a

318
00:16:42,040 --> 00:16:44,600
Speaker 1: little bit, and I think, I don't know, I imagine

319
00:16:44,680 --> 00:16:46,800
Speaker 1: that there just is something to that, right. You don't

320
00:16:46,800 --> 00:16:48,600
Speaker 1: want someone to want up you when you're the guy

321
00:16:48,640 --> 00:16:51,200
Speaker 1: in charge. Right, it's a little bit like the Ring

322
00:16:51,400 --> 00:16:53,360
Speaker 1: right in Lord of the Rings, Like if you get

323
00:16:53,400 --> 00:16:56,560
Speaker 1: that thing on your finger, even if you're frodo might

324
00:16:56,600 --> 00:16:58,800
Speaker 1: become ever is I don't know anything about Lord. Oh

325
00:16:58,880 --> 00:17:01,160
Speaker 1: you don't. Wow. I just that one on here. That's fine.

326
00:17:01,360 --> 00:17:04,320
Speaker 1: What I meant to say was that that I think

327
00:17:04,320 --> 00:17:09,639
Speaker 1: of Bob Iger as a uniquely modest, self aware person

328
00:17:10,119 --> 00:17:13,040
Speaker 1: with a lot of talents who I hadn't expected to

329
00:17:13,080 --> 00:17:16,080
Speaker 1: become so enamored of the CEO suite, that he wouldn't

330
00:17:16,119 --> 00:17:17,960
Speaker 1: let go, that he would hang out of that ring

331
00:17:18,000 --> 00:17:20,760
Speaker 1: as tightly as possible, and yet he did. And I

332
00:17:20,800 --> 00:17:23,000
Speaker 1: think it's interesting what you said that he acknowledged he

333
00:17:23,119 --> 00:17:26,480
Speaker 1: like the Jets. I mean, that's pretty honest, so right, right,

334
00:17:26,920 --> 00:17:28,600
Speaker 1: And you know, we also said he like he chose

335
00:17:28,640 --> 00:17:30,800
Speaker 1: not to run for president of United States because he

336
00:17:30,800 --> 00:17:32,959
Speaker 1: thought it would blow up his family life and end

337
00:17:33,000 --> 00:17:36,720
Speaker 1: his marriage. And he said that publicly. I aspired this thing,

338
00:17:36,760 --> 00:17:38,600
Speaker 1: but I walked away from it. And yet he didn't

339
00:17:38,600 --> 00:17:41,840
Speaker 1: really walk away from Disney. And so there in lines

340
00:17:41,880 --> 00:17:45,080
Speaker 1: of very disruptive crash coursey tail that will continue to

341
00:17:45,119 --> 00:17:47,399
Speaker 1: focus on here. Right, if he can't be president, I

342
00:17:47,400 --> 00:17:50,600
Speaker 1: guess I'll go back and be CEO. Yeah, I'll take

343
00:17:50,680 --> 00:17:54,080
Speaker 1: that second bite. The other thing you said about Tiger

344
00:17:54,320 --> 00:17:58,000
Speaker 1: and j Peck is in a way how similar they are.

345
00:17:58,080 --> 00:18:01,160
Speaker 1: They came up through Disney to a certain extent. Chpeck

346
00:18:01,240 --> 00:18:04,080
Speaker 1: was an operations guy, etcetera, etcetera. But I think one

347
00:18:04,080 --> 00:18:07,520
Speaker 1: of the interesting things about Iger as an executive is

348
00:18:07,560 --> 00:18:11,840
Speaker 1: that he wed the corporate management role of looking at

349
00:18:11,840 --> 00:18:14,919
Speaker 1: the bottom line and thinking about things strategically to this

350
00:18:14,960 --> 00:18:18,280
Speaker 1: other ability to deal with creatives to deal with Hollywood

351
00:18:18,320 --> 00:18:22,480
Speaker 1: talent and deal with directors and actors and writers. Not

352
00:18:22,520 --> 00:18:24,440
Speaker 1: that we writers are difficult people to deal with that,

353
00:18:25,960 --> 00:18:28,800
Speaker 1: but it needs a certain kind of I think, management

354
00:18:28,800 --> 00:18:32,800
Speaker 1: style from someone who appreciates what creativity is about. I agree.

355
00:18:32,800 --> 00:18:35,240
Speaker 1: I think those are two very different skills, and it's

356
00:18:35,320 --> 00:18:37,919
Speaker 1: rare you find them in the same person. And I

357
00:18:37,920 --> 00:18:40,520
Speaker 1: don't know that that was there in the person of

358
00:18:40,560 --> 00:18:43,760
Speaker 1: poor Bob Chpec. Yeah, I think that's fair. I mean,

359
00:18:43,800 --> 00:18:46,639
Speaker 1: I think I think as well. So the way Eiger

360
00:18:47,200 --> 00:18:52,600
Speaker 1: departed sort of acknowledges that a little bit when he leaves,

361
00:18:52,680 --> 00:18:54,840
Speaker 1: when he says I'm not going to be CEO anymore,

362
00:18:54,960 --> 00:18:59,520
Speaker 1: he becomes executive chairman. Chapec becomes CEO and reports to him.

363
00:18:59,560 --> 00:19:03,160
Speaker 1: So that all completely nutty. But I mean, why if

364
00:19:03,200 --> 00:19:06,320
Speaker 1: you want to run an organization well and someone else

365
00:19:06,359 --> 00:19:08,959
Speaker 1: takes the reins, do you then say, yeah, but your

366
00:19:09,000 --> 00:19:10,720
Speaker 1: old buss can hang around. He can sort of sit

367
00:19:10,760 --> 00:19:13,600
Speaker 1: on your shoulder, and in effect, the other thing that

368
00:19:13,680 --> 00:19:15,760
Speaker 1: I did was he said, I'll also keep the cool

369
00:19:15,800 --> 00:19:17,920
Speaker 1: work for myself, right, I'll be the creative guy. I'll

370
00:19:17,960 --> 00:19:20,280
Speaker 1: be the creative guy. You can run the parks and

371
00:19:20,359 --> 00:19:23,760
Speaker 1: you can meet with the CFO and I'm gonna handle

372
00:19:24,080 --> 00:19:28,520
Speaker 1: the streaming release of Hamilton's and negotiate that, and I'll

373
00:19:28,560 --> 00:19:31,199
Speaker 1: deal with a reboot of Frozen or whatever else it was.

374
00:19:31,560 --> 00:19:33,920
Speaker 1: But really the fun stuff, the creative stuff, and you're

375
00:19:33,960 --> 00:19:36,320
Speaker 1: not going away, so the board sees you hanging around.

376
00:19:36,720 --> 00:19:39,359
Speaker 1: Isn't it a little weird? Yeah? I do think it

377
00:19:39,440 --> 00:19:41,480
Speaker 1: kind of set Cha Peck up for failure in a way.

378
00:19:41,640 --> 00:19:44,560
Speaker 1: He thinks he's the CEO, he has the title, and

379
00:19:44,640 --> 00:19:48,280
Speaker 1: yet Tiger is sort of looming over everything. Right, he

380
00:19:48,359 --> 00:19:51,840
Speaker 1: keeps his office. There were reports that he was meeting

381
00:19:52,080 --> 00:19:56,760
Speaker 1: with Schapex lieutenants without him. It's not really built. He

382
00:19:56,880 --> 00:19:59,040
Speaker 1: was having parties at his house that I think either

383
00:19:59,440 --> 00:20:02,520
Speaker 1: Cha pecked an attend or Chapec wasn't invited to with

384
00:20:02,560 --> 00:20:04,639
Speaker 1: other Disney managers. I think that came out in some

385
00:20:04,680 --> 00:20:06,840
Speaker 1: of the news. It's tough. I mean, that's not that's

386
00:20:06,920 --> 00:20:09,680
Speaker 1: I would argue that is not. That's a very drawn

387
00:20:09,720 --> 00:20:13,080
Speaker 1: out process that is just not going to work out.

388
00:20:13,240 --> 00:20:16,119
Speaker 1: He's always going to be looking over his shoulder. And

389
00:20:16,160 --> 00:20:19,080
Speaker 1: why didn't the board intervene? Why didn't the Board of directors,

390
00:20:19,640 --> 00:20:22,280
Speaker 1: which in corporate America is supposed to be this outside

391
00:20:22,800 --> 00:20:26,120
Speaker 1: governing force. They're supposed to make sure that CEOs don't

392
00:20:26,119 --> 00:20:29,440
Speaker 1: become tyrants or CEOs don't become so willy lily in

393
00:20:29,480 --> 00:20:32,000
Speaker 1: their decisions that it's not good for the company or

394
00:20:32,040 --> 00:20:35,200
Speaker 1: good for employees, are good for investors. That's the ideal

395
00:20:35,320 --> 00:20:38,520
Speaker 1: role of the board of directors. In reality, boards can

396
00:20:38,520 --> 00:20:44,560
Speaker 1: be rubber stamps. They're often populated by people, the CEO picks, etcetera, etcetera.

397
00:20:45,480 --> 00:20:47,600
Speaker 1: Was any of that in play here? Well, I do

398
00:20:47,760 --> 00:20:50,119
Speaker 1: think that it probably goes back to what you were

399
00:20:50,160 --> 00:20:53,160
Speaker 1: saying around these questions about Chapec, Right, was he ready

400
00:20:53,200 --> 00:20:55,640
Speaker 1: for this? Did he have those sort of soft skills

401
00:20:55,680 --> 00:20:59,440
Speaker 1: that EQ that we talked about today that's so important

402
00:20:59,560 --> 00:21:02,320
Speaker 1: in exact getives. Maybe the board didn't see that, and

403
00:21:02,359 --> 00:21:05,840
Speaker 1: so they actually felt like the structure was the best

404
00:21:05,880 --> 00:21:08,800
Speaker 1: approach as they kind of got shape ramped up, that

405
00:21:08,880 --> 00:21:10,840
Speaker 1: he could sort of learn on the job with with

406
00:21:10,880 --> 00:21:13,760
Speaker 1: Iger hanging around as a mentor. In an ideal world.

407
00:21:14,000 --> 00:21:16,720
Speaker 1: And let's talk a little bit about Chapeck here. He

408
00:21:16,720 --> 00:21:20,960
Speaker 1: he came up completely from like a corporate management background, right, Yeah,

409
00:21:21,000 --> 00:21:24,240
Speaker 1: he's very data driven, he's on the Park side of

410
00:21:24,280 --> 00:21:29,440
Speaker 1: the business. And interestingly, he doesn't deviate that much from

411
00:21:29,480 --> 00:21:33,680
Speaker 1: the strategy that Eiger put in place. It's much more

412
00:21:33,720 --> 00:21:37,600
Speaker 1: I think about those softer skills that maybe the board

413
00:21:37,640 --> 00:21:41,560
Speaker 1: didn't think he had, and less about actual strategy, which

414
00:21:41,960 --> 00:21:45,000
Speaker 1: when you look at it is pretty similar to Tiger

415
00:21:45,400 --> 00:21:48,840
Speaker 1: and those softer skills things like do not piss off

416
00:21:48,920 --> 00:21:51,600
Speaker 1: Scarlett Johann's right, is that like a softer skill you

417
00:21:51,640 --> 00:21:55,240
Speaker 1: should sort of look after, right, don't piss off scar Joe.

418
00:21:55,359 --> 00:21:57,920
Speaker 1: That's that's not a great move and what happened there

419
00:21:58,040 --> 00:22:01,080
Speaker 1: just recap on that one. Well. So this is kind

420
00:22:01,080 --> 00:22:03,120
Speaker 1: of interesting because it also ties into some of these

421
00:22:03,119 --> 00:22:06,120
Speaker 1: issues we're seeing with streaming. So Black Widow comes out,

422
00:22:06,160 --> 00:22:08,040
Speaker 1: the company decides they're going to put it out both

423
00:22:08,040 --> 00:22:11,919
Speaker 1: on streaming and in theaters. At the same time, she

424
00:22:12,000 --> 00:22:14,920
Speaker 1: doesn't like this as a star because it has the

425
00:22:14,960 --> 00:22:18,280
Speaker 1: potential to cut into her earning. She raises this sus

426
00:22:18,320 --> 00:22:22,280
Speaker 1: Disney chap and the company actually released the details of

427
00:22:22,320 --> 00:22:25,680
Speaker 1: her contract, which I think, again, not a great way

428
00:22:25,760 --> 00:22:28,439
Speaker 1: to move over your talent, and I think something Eiger

429
00:22:29,080 --> 00:22:31,000
Speaker 1: was appalled by. He would not have handled and it

430
00:22:31,040 --> 00:22:33,560
Speaker 1: was sort of like an act of almost public shaming exactly, like,

431
00:22:33,600 --> 00:22:35,280
Speaker 1: what do you have to complain about? You already get

432
00:22:35,280 --> 00:22:37,320
Speaker 1: bazillions of dollars and now you want even more, and

433
00:22:37,320 --> 00:22:38,879
Speaker 1: we're in the middle of a pandemic as well. It

434
00:22:38,960 --> 00:22:41,040
Speaker 1: was sort of the tone of the letter. So that

435
00:22:41,119 --> 00:22:42,800
Speaker 1: was not a great move. Well, it was not a

436
00:22:42,800 --> 00:22:45,120
Speaker 1: great move in terms of how you relate to Hollywood talent.

437
00:22:45,359 --> 00:22:47,400
Speaker 1: The average Americans might be able to get the idea

438
00:22:47,440 --> 00:22:52,119
Speaker 1: of like stret but you know, Hollywood works in a

439
00:22:52,160 --> 00:22:54,560
Speaker 1: certain way, and the star system works in a certain way,

440
00:22:54,920 --> 00:22:56,840
Speaker 1: and if you want stars in your films and you

441
00:22:56,840 --> 00:22:59,440
Speaker 1: want a list directors, you have to court them in

442
00:22:59,440 --> 00:23:02,320
Speaker 1: a certain way. And Chpeck, I think, sort of said, no,

443
00:23:03,080 --> 00:23:06,239
Speaker 1: you're a cog and the Disney machine, and you're just

444
00:23:06,440 --> 00:23:08,720
Speaker 1: like one of the rides at the theme park, and

445
00:23:08,760 --> 00:23:11,040
Speaker 1: we're going to treat you accordingly. Right, And I think

446
00:23:11,080 --> 00:23:13,679
Speaker 1: that this was a bigger issue around creative and talent

447
00:23:13,760 --> 00:23:16,840
Speaker 1: in general. He restructured the company. So it used to

448
00:23:16,920 --> 00:23:19,239
Speaker 1: be there are all these little fiefdoms that controlled their

449
00:23:19,280 --> 00:23:22,200
Speaker 1: own budgets. He put all the budgets under one guy,

450
00:23:22,359 --> 00:23:24,399
Speaker 1: so all the creatives felt like they didn't have as

451
00:23:24,480 --> 00:23:27,919
Speaker 1: much control just little things like that really send a

452
00:23:27,920 --> 00:23:31,240
Speaker 1: strong signal and do change the culture. And then, through

453
00:23:31,240 --> 00:23:34,360
Speaker 1: no fault of his own, shortly after he takes over

454
00:23:34,400 --> 00:23:38,720
Speaker 1: as CEO, the pandemic arrives on Disney's doorstep, that arrives

455
00:23:38,760 --> 00:23:41,560
Speaker 1: on the world's doorstep. But Disney is in a bunch

456
00:23:41,560 --> 00:23:46,719
Speaker 1: of businesses that are both at least initially harmed by

457
00:23:46,760 --> 00:23:49,840
Speaker 1: COVID and helped by COVID in terms of what their

458
00:23:49,880 --> 00:23:52,879
Speaker 1: customers need. The theme park business, people aren't going to

459
00:23:52,920 --> 00:23:55,920
Speaker 1: go to theme parks now. Theme park business basically shuts down.

460
00:23:56,359 --> 00:23:59,440
Speaker 1: But people are home watching a lot of TV, were

461
00:23:59,480 --> 00:24:02,960
Speaker 1: streaming streaming, So COVID helps the streaming bet helps the

462
00:24:02,960 --> 00:24:05,800
Speaker 1: streaming that in a really big way. And I think

463
00:24:05,800 --> 00:24:07,680
Speaker 1: people thought this was going to be a permanent shift.

464
00:24:07,800 --> 00:24:10,119
Speaker 1: People are home, they're signing up for Disney, plus they

465
00:24:10,119 --> 00:24:12,399
Speaker 1: want to watch Hamilton's. They have all this extra time

466
00:24:13,040 --> 00:24:16,800
Speaker 1: on their hands, are looking for content. So the streaming

467
00:24:16,800 --> 00:24:18,960
Speaker 1: business just balloons, I think in a way people had

468
00:24:19,000 --> 00:24:22,000
Speaker 1: not really expected. And a lot of that accruise to

469
00:24:22,040 --> 00:24:24,439
Speaker 1: either though, right like the praise for the fact that

470
00:24:24,480 --> 00:24:28,320
Speaker 1: the streaming business took off even though COVID was in

471
00:24:28,400 --> 00:24:31,040
Speaker 1: no one's control. It was just an accidental boost, right.

472
00:24:31,200 --> 00:24:34,520
Speaker 1: And one thing that Chapick does though, is he ups

473
00:24:34,600 --> 00:24:37,480
Speaker 1: the predictions for how fast this business is going to grow.

474
00:24:38,000 --> 00:24:39,800
Speaker 1: So he says, all of a sudden, we're going to have,

475
00:24:39,840 --> 00:24:43,679
Speaker 1: you know, more than two hundred million subscribers. I know

476
00:24:44,000 --> 00:24:49,880
Speaker 1: X date and again very aggressive numbers, but I think

477
00:24:50,000 --> 00:24:52,639
Speaker 1: this is very aggressive. And like he tripled or something

478
00:24:53,080 --> 00:24:56,200
Speaker 1: the numbers that I originally projected for the number of

479
00:24:56,240 --> 00:24:59,520
Speaker 1: streaming customers, right, it was like two x or three x,

480
00:25:00,040 --> 00:25:02,920
Speaker 1: and Tiger had originally laid out Yeah, And I think

481
00:25:03,720 --> 00:25:06,840
Speaker 1: it was really about this is his I'm placing everything

482
00:25:06,840 --> 00:25:09,080
Speaker 1: behind the streaming is the future. This is what this

483
00:25:09,119 --> 00:25:13,119
Speaker 1: company is about. We're just putting all our resources behind this.

484
00:25:14,680 --> 00:25:17,320
Speaker 1: And then of course the bloom comes off of the

485
00:25:17,359 --> 00:25:20,640
Speaker 1: streaming rose. Yes, and this is a really interesting one

486
00:25:20,680 --> 00:25:25,320
Speaker 1: because again I don't think that this is anyone's fault necessarily,

487
00:25:25,400 --> 00:25:28,320
Speaker 1: but there's a real shift on Wall Street. Right. So

488
00:25:28,440 --> 00:25:31,680
Speaker 1: previously subscriber growth had been the big thing everyone wanted.

489
00:25:31,760 --> 00:25:34,320
Speaker 1: So are you growing your base? What are your numbers?

490
00:25:35,520 --> 00:25:38,840
Speaker 1: And so Disney had priced its product like relatively low

491
00:25:38,920 --> 00:25:41,600
Speaker 1: compared to let's say a Netflix, but all of a sudden,

492
00:25:41,640 --> 00:25:44,760
Speaker 1: people like, wait, what about profitability? And so this is

493
00:25:45,160 --> 00:25:49,440
Speaker 1: now the market has shifted. Two, can we make money

494
00:25:49,440 --> 00:25:52,000
Speaker 1: off of this? Not just is this a growing business?

495
00:25:52,000 --> 00:25:53,720
Speaker 1: We're not going to be patient anymore with your long

496
00:25:53,840 --> 00:25:56,760
Speaker 1: term bet of building a business at the expense of profits.

497
00:25:56,800 --> 00:25:59,600
Speaker 1: Like can that happened like within two years or something? Right? Yes,

498
00:25:59,640 --> 00:26:03,400
Speaker 1: it was really fast. The dangers of courting Wall Street. Yeah,

499
00:26:03,480 --> 00:26:07,439
Speaker 1: and Disney has some pretty serious losses. So the quarter

500
00:26:07,600 --> 00:26:12,680
Speaker 1: before jackas ousted, he reported a one point five billion

501
00:26:13,040 --> 00:26:17,480
Speaker 1: dollar loss. So that's a big deal. So streaming sagging

502
00:26:17,800 --> 00:26:19,960
Speaker 1: and the writing is starting to appear on the wall

503
00:26:20,040 --> 00:26:23,240
Speaker 1: for j pex end at the company. This feels like

504
00:26:23,280 --> 00:26:25,360
Speaker 1: a good place for a break. Let's just take one

505
00:26:25,359 --> 00:26:28,280
Speaker 1: more break and then I want to dive into Iger's

506
00:26:28,320 --> 00:26:37,640
Speaker 1: grand return. So please stick around. So I'm Bath, I'm

507
00:26:37,680 --> 00:26:43,680
Speaker 1: not Beth. I'm back with Beth Coit. Let's climb back

508
00:26:43,720 --> 00:26:47,480
Speaker 1: into the misery of Bob J. Beck and things are

509
00:26:47,520 --> 00:26:52,359
Speaker 1: fraying for him at Disney. Streaming is unraveling, it's not

510
00:26:52,480 --> 00:26:56,080
Speaker 1: hitting the goals he set for himself. And in the

511
00:26:56,119 --> 00:27:00,000
Speaker 1: background still is Bob Igor, who we now know from

512
00:27:00,040 --> 00:27:04,120
Speaker 1: eight subsequent reporting in Bloomberg and elsewhere that was sort

513
00:27:04,119 --> 00:27:06,240
Speaker 1: of cheering this on at this point, right, he was

514
00:27:06,280 --> 00:27:11,119
Speaker 1: sort of cheering on the demise of Chapec, meaning he

515
00:27:11,200 --> 00:27:14,360
Speaker 1: probably wasn't unhappy on one hand that some of these

516
00:27:14,359 --> 00:27:18,200
Speaker 1: managerial problems that arisen. I think that's fair. I also

517
00:27:18,280 --> 00:27:20,879
Speaker 1: think there is something we see with what we call

518
00:27:20,960 --> 00:27:25,480
Speaker 1: boomerang CEOs who come back to their companies is that

519
00:27:25,760 --> 00:27:29,359
Speaker 1: in retrospect they have kind of undermined their successor in

520
00:27:29,400 --> 00:27:32,400
Speaker 1: some way. They've said things, they've done things, and so

521
00:27:32,440 --> 00:27:35,959
Speaker 1: we know I was starting to suggest to friends that

522
00:27:36,000 --> 00:27:39,399
Speaker 1: he wasn't happy with the direction of the company publicly

523
00:27:39,560 --> 00:27:42,879
Speaker 1: maybe saying things that were in contrast to what Chapec

524
00:27:42,960 --> 00:27:44,760
Speaker 1: was saying. So we're seeing that a little bit at

525
00:27:44,760 --> 00:27:48,439
Speaker 1: this point. And he was particularly as I recall, upset

526
00:27:48,680 --> 00:27:52,600
Speaker 1: that during COVID, when there were government subsidies to companies

527
00:27:52,600 --> 00:27:55,879
Speaker 1: to help them keep people employed, that Chapec decided to

528
00:27:56,280 --> 00:28:01,000
Speaker 1: lay off people anyway at at the park and Tiger

529
00:28:01,800 --> 00:28:04,720
Speaker 1: felt that it was inhumane essentially, and he intervened to

530
00:28:04,720 --> 00:28:06,879
Speaker 1: stop it. And we saw a couple of things like

531
00:28:06,920 --> 00:28:10,840
Speaker 1: that later when we were seeing the Don't Say Gay

532
00:28:10,840 --> 00:28:14,560
Speaker 1: bill in Florida employees felt like cha Peck did not

533
00:28:14,680 --> 00:28:17,000
Speaker 1: speak up fast enough about this and say, you know,

534
00:28:17,040 --> 00:28:19,800
Speaker 1: we're against this, this is wrong, and I gore me.

535
00:28:19,920 --> 00:28:23,000
Speaker 1: Mile tweets that he's opposed to this. I think he

536
00:28:23,040 --> 00:28:25,320
Speaker 1: goes on that he's opposed to Florida's measure exactly. It

537
00:28:25,359 --> 00:28:29,040
Speaker 1: goes on TV and says this and so again, sort

538
00:28:29,040 --> 00:28:32,679
Speaker 1: of really setting himself up in contrast to Check. I

539
00:28:32,720 --> 00:28:34,359
Speaker 1: think was part of his undoing a little bit, the

540
00:28:34,359 --> 00:28:38,160
Speaker 1: way he dealt with this fallout from these political issues. Well.

541
00:28:38,200 --> 00:28:41,080
Speaker 1: And it's also a little tricky, right, because you can't

542
00:28:41,120 --> 00:28:44,320
Speaker 1: fall Tiger for saying I want our employees to be

543
00:28:44,400 --> 00:28:47,280
Speaker 1: treated differently if the resources exist to support them in

544
00:28:47,280 --> 00:28:51,200
Speaker 1: this difficult time. He can argue that Disney's culture and

545
00:28:51,280 --> 00:28:54,680
Speaker 1: its public stance as a corporate entity vis a vis

546
00:28:54,720 --> 00:28:57,520
Speaker 1: that don't say gay bill in Florida is in keeping

547
00:28:57,520 --> 00:29:00,640
Speaker 1: with where it had been traditionally, and he felt Chapeck

548
00:29:00,720 --> 00:29:05,160
Speaker 1: was tipping the apple cart. So there's this kind of empirical, rational,

549
00:29:06,040 --> 00:29:09,160
Speaker 1: discernible reason might be doing this. But then also like

550
00:29:09,480 --> 00:29:12,040
Speaker 1: maybe he wants that ring back right, He doesn't like

551
00:29:12,120 --> 00:29:14,480
Speaker 1: the fact that someone else has the ring right and again,

552
00:29:14,480 --> 00:29:18,160
Speaker 1: he's not going to be president, right, what's he gonna do?

553
00:29:18,360 --> 00:29:21,840
Speaker 1: I'm sure there was something to that. Maybe retirement wasn't

554
00:29:21,880 --> 00:29:24,560
Speaker 1: quite what he thought was going to be. So eventually

555
00:29:24,720 --> 00:29:29,120
Speaker 1: Disney's board makes Bob Chpeck walk the plank, and it

556
00:29:29,320 --> 00:29:32,400
Speaker 1: seems like with a healthy assist and maybe even a

557
00:29:32,480 --> 00:29:36,000
Speaker 1: push from Bob Iger. From the reporting we've done during

558
00:29:36,000 --> 00:29:39,040
Speaker 1: that period of time, you know, where was the board

559
00:29:39,120 --> 00:29:41,960
Speaker 1: How were they navigating the fact that they had in

560
00:29:42,000 --> 00:29:46,600
Speaker 1: Bob Chapeck and non ideal executive, and in Bob Iger,

561
00:29:46,760 --> 00:29:52,080
Speaker 1: a non fully retired former executive with an agenda. This

562
00:29:52,160 --> 00:29:54,040
Speaker 1: is a tough one for the board, right. They don't

563
00:29:54,120 --> 00:29:57,360
Speaker 1: come out looking the best in this, because not that

564
00:29:57,440 --> 00:30:01,320
Speaker 1: long before j Peck is ousted did renew his contract.

565
00:30:02,080 --> 00:30:06,400
Speaker 1: Apparently some reporting has shown that Mark Parker, one of

566
00:30:06,440 --> 00:30:11,000
Speaker 1: the board members executive chairman of Nike and Mary Barra

567
00:30:11,120 --> 00:30:13,840
Speaker 1: CEO of GM, had sort of questioned his leadership, but

568
00:30:14,000 --> 00:30:16,160
Speaker 1: the board decided, you know what, actually, maybe if we

569
00:30:16,200 --> 00:30:19,120
Speaker 1: do back him, it'll boost his confidence, and so they

570
00:30:19,240 --> 00:30:21,840
Speaker 1: renew his contract. So let's just stop there for a minute.

571
00:30:21,880 --> 00:30:25,920
Speaker 1: So this is June, and when did j Peck get

572
00:30:25,920 --> 00:30:33,200
Speaker 1: forced out? In November November November, So five months after

573
00:30:33,280 --> 00:30:36,920
Speaker 1: the board signs a new contract with this guy, they

574
00:30:36,960 --> 00:30:41,440
Speaker 1: then participate in his defenestration. That's also wacky to me.

575
00:30:41,520 --> 00:30:44,240
Speaker 1: That's like as big a crash course as you possibly

576
00:30:44,240 --> 00:30:46,960
Speaker 1: could have. Why didn't they just not renew his contract?

577
00:30:47,080 --> 00:30:50,160
Speaker 1: Was because the board couldn't get a uniform view of

578
00:30:50,160 --> 00:30:52,920
Speaker 1: what to do. I think it's the Iger problem. Who

579
00:30:52,920 --> 00:30:54,760
Speaker 1: takes over? Right? If you get rid of this guy,

580
00:30:54,760 --> 00:30:58,080
Speaker 1: do you have someone in the wings ready to step up?

581
00:30:58,080 --> 00:30:59,680
Speaker 1: And at that point, I'm not sure that they have

582
00:30:59,800 --> 00:31:03,240
Speaker 1: been having these conversations yet with Iger. Publicly he had

583
00:31:03,280 --> 00:31:07,440
Speaker 1: been pretty definitive, saying, oh, you can't go home again.

584
00:31:07,600 --> 00:31:10,120
Speaker 1: I would never be CEO of Disney. I mean he's

585
00:31:10,120 --> 00:31:13,000
Speaker 1: on the record saying that quite a bit so, and

586
00:31:13,000 --> 00:31:15,120
Speaker 1: then he's at home home saying I can't wait to

587
00:31:15,120 --> 00:31:19,280
Speaker 1: get back to right. So I think that they publicly

588
00:31:19,320 --> 00:31:21,760
Speaker 1: really did have to support him at this point. But

589
00:31:21,840 --> 00:31:24,880
Speaker 1: then sort of the turnaround from there, the whip lash

590
00:31:24,920 --> 00:31:28,720
Speaker 1: of then so a few months later saying actually you're out.

591
00:31:29,680 --> 00:31:34,280
Speaker 1: So what happens between June and November? So the big one,

592
00:31:34,480 --> 00:31:36,320
Speaker 1: there's a couple one is what we were talking about

593
00:31:36,320 --> 00:31:38,240
Speaker 1: with the dad said gay Bill in Florida. I think

594
00:31:38,240 --> 00:31:40,680
Speaker 1: that's sort of bubbling in the background. But the big

595
00:31:40,720 --> 00:31:45,280
Speaker 1: one is really an earnings call where reports at the

596
00:31:45,320 --> 00:31:50,040
Speaker 1: company has lost one point five billion American dollars American

597
00:31:50,920 --> 00:31:55,080
Speaker 1: one point five billion mickey Pins, not one point five

598
00:31:55,120 --> 00:31:59,560
Speaker 1: billion Hamilton tokens, real real money, and he sort of

599
00:31:59,560 --> 00:32:02,640
Speaker 1: gloss is over it when he's reporting it. And I

600
00:32:02,680 --> 00:32:04,520
Speaker 1: think it was not only the loss, but sort of

601
00:32:04,560 --> 00:32:07,200
Speaker 1: the way it was handled that took people back and

602
00:32:07,680 --> 00:32:10,960
Speaker 1: I think made them question, should we really be supporting

603
00:32:10,960 --> 00:32:13,320
Speaker 1: this guy. You just talked about the one point five

604
00:32:13,320 --> 00:32:17,360
Speaker 1: billion dollar loss, buddy, like you talked about Scarlett Johansson's contract. Right,

605
00:32:17,480 --> 00:32:20,080
Speaker 1: It was not taken serious, a little bit too cavalier, right.

606
00:32:20,560 --> 00:32:23,640
Speaker 1: So this is probably somebody who has we talked earlier

607
00:32:23,640 --> 00:32:27,160
Speaker 1: about Iger's self awareness. J Peck maybe have a self

608
00:32:27,200 --> 00:32:30,640
Speaker 1: awareness deficit on a sort of a Grandmall scale. I

609
00:32:30,680 --> 00:32:33,680
Speaker 1: think that's part of it. He also, I think, was

610
00:32:33,720 --> 00:32:37,840
Speaker 1: feuding with various members of the executive team. He had

611
00:32:37,920 --> 00:32:40,920
Speaker 1: fired some very senior people, and that you know is

612
00:32:41,000 --> 00:32:45,120
Speaker 1: ultimately the CFO, Christine McCarthy, who is the one who

613
00:32:45,160 --> 00:32:48,080
Speaker 1: goes to Iger and says, would you come back? This

614
00:32:48,120 --> 00:32:50,240
Speaker 1: is something you would consider. Do you see I was

615
00:32:50,320 --> 00:32:53,680
Speaker 1: freelance like that? Did you just sort of decide I

616
00:32:53,720 --> 00:32:55,520
Speaker 1: am the one member of the board, and I am

617
00:32:55,560 --> 00:32:58,280
Speaker 1: the chief steward of the company's finances, and I'm going

618
00:32:58,320 --> 00:33:00,880
Speaker 1: to drive over to Brentwood and have a glass of

619
00:33:00,920 --> 00:33:03,360
Speaker 1: wine with Bob Iger and convince him to come back.

620
00:33:03,400 --> 00:33:06,080
Speaker 1: Does that happen a lot in the Marriagual arrangement. It's

621
00:33:06,120 --> 00:33:08,600
Speaker 1: an unusual arrangement. I mean, I think I think should

622
00:33:08,600 --> 00:33:11,880
Speaker 1: we suspect that any of that was choreographed? I think

623
00:33:11,880 --> 00:33:13,880
Speaker 1: she'd been at the company for a long time, she

624
00:33:14,040 --> 00:33:16,760
Speaker 1: kept in touch with Igor. I think she really did

625
00:33:16,760 --> 00:33:19,880
Speaker 1: not like what was happening. It seemed as though she

626
00:33:20,080 --> 00:33:23,560
Speaker 1: and SHAPEC had had a falling out, So I don't

627
00:33:23,600 --> 00:33:25,800
Speaker 1: think it was coordinated. I think she was maybe in

628
00:33:25,880 --> 00:33:27,720
Speaker 1: touch enough with him that she could sort of float

629
00:33:27,760 --> 00:33:31,720
Speaker 1: that question. And she's seeing these deteriorating numbers. She's seeing

630
00:33:31,800 --> 00:33:34,520
Speaker 1: Check go on a conference call and say one point

631
00:33:34,520 --> 00:33:37,160
Speaker 1: five billion anyway, and he moves right along, which probably

632
00:33:37,200 --> 00:33:40,360
Speaker 1: also was discomfitting for her. I think that's true, And

633
00:33:40,400 --> 00:33:42,840
Speaker 1: so is it a surprise that when she rolls into

634
00:33:43,560 --> 00:33:46,840
Speaker 1: i's living room or office or wherever that conversation happened,

635
00:33:46,840 --> 00:33:49,040
Speaker 1: that he said, yes, I'll come back right away, right now, tomorrow,

636
00:33:49,040 --> 00:33:51,440
Speaker 1: when do you want me. I think at that point

637
00:33:51,480 --> 00:33:53,479
Speaker 1: he was probably ready. I think he had probably been

638
00:33:53,480 --> 00:33:55,880
Speaker 1: thinking about, like jumping out of his shoes. Ready. Yeah.

639
00:33:55,920 --> 00:33:59,240
Speaker 1: So then when Susan Arnold, the then chairman of there's

640
00:33:59,280 --> 00:34:02,160
Speaker 1: still chairman at the board, approaches him, she knows he's

641
00:34:02,160 --> 00:34:04,640
Speaker 1: going to say yes because the seed has already been

642
00:34:04,680 --> 00:34:08,279
Speaker 1: planted by the CFO. So now bobye Gar is back.

643
00:34:08,960 --> 00:34:11,840
Speaker 1: Now he's back, And when he first got back to

644
00:34:11,880 --> 00:34:13,799
Speaker 1: the company, there was a little bit of this like

645
00:34:13,880 --> 00:34:17,480
Speaker 1: hollelujah moment. The stock jumped I think more than on

646
00:34:17,520 --> 00:34:19,839
Speaker 1: the day it was announced he would come back, made

647
00:34:19,840 --> 00:34:21,919
Speaker 1: one of those nice little spikes up on the chart,

648
00:34:22,400 --> 00:34:26,279
Speaker 1: and then settled down afterwards into reality. I think I'd

649
00:34:26,280 --> 00:34:29,200
Speaker 1: have to look now where the stock is, but certainly

650
00:34:29,200 --> 00:34:31,960
Speaker 1: at one point it's sort of settled down in the

651
00:34:32,040 --> 00:34:34,960
Speaker 1: sort of range of where it was when Peck was

652
00:34:35,000 --> 00:34:39,240
Speaker 1: still running things, which suggests that investors want to see

653
00:34:39,280 --> 00:34:42,520
Speaker 1: what is going to do at Disney and to see

654
00:34:42,520 --> 00:34:44,960
Speaker 1: if he can really turn it around. So what does

655
00:34:44,960 --> 00:34:47,680
Speaker 1: he have to do. Yeah, I mean the problems that

656
00:34:48,080 --> 00:34:50,080
Speaker 1: Peck was dealing with are still there, right. We still

657
00:34:50,120 --> 00:34:52,360
Speaker 1: have to figure out the streaming business, still have to

658
00:34:52,360 --> 00:34:54,640
Speaker 1: figure out how to make it profitable. Some of the

659
00:34:54,800 --> 00:34:59,200
Speaker 1: initiatives that had started under Chapeck, Bob cy you know,

660
00:34:59,320 --> 00:35:01,880
Speaker 1: cost cutting measures. I think that's still going to happen.

661
00:35:02,040 --> 00:35:07,360
Speaker 1: I think just the investment, endless investment in content streaming,

662
00:35:07,600 --> 00:35:09,920
Speaker 1: just at the growth of the business at all costs

663
00:35:09,920 --> 00:35:12,240
Speaker 1: is over. I think that that and it's over because

664
00:35:12,239 --> 00:35:15,840
Speaker 1: of why profits. It's not making money. They have to

665
00:35:15,880 --> 00:35:18,200
Speaker 1: cut costs and figure out a way to do it.

666
00:35:18,719 --> 00:35:21,360
Speaker 1: And is Bob Iger a guy who can come in

667
00:35:21,400 --> 00:35:23,640
Speaker 1: and cut He's a guy who spent his whole life

668
00:35:23,640 --> 00:35:28,200
Speaker 1: building and running victory laps for acquisitions. He's never been

669
00:35:28,560 --> 00:35:31,520
Speaker 1: a cost cutter. No one's ever said he's a flagrant spender.

670
00:35:32,040 --> 00:35:34,080
Speaker 1: There were, you know, concerns about what he paid for

671
00:35:34,120 --> 00:35:38,120
Speaker 1: some acquisitions, but in terms of Disney's own budgets and

672
00:35:38,160 --> 00:35:41,840
Speaker 1: financial management, I think he and his team were considered smart,

673
00:35:41,960 --> 00:35:45,759
Speaker 1: responsible managers, but they weren't cost cutters. I think that's

674
00:35:45,760 --> 00:35:48,000
Speaker 1: a fair point. I mean, there are other ways, right

675
00:35:48,000 --> 00:35:50,120
Speaker 1: that he could go back he could make a content

676
00:35:50,200 --> 00:35:52,239
Speaker 1: deal with Netflix, right, we could go back and see

677
00:35:52,280 --> 00:35:56,200
Speaker 1: him do some sort of licensing leasing type of deal.

678
00:35:56,800 --> 00:35:59,239
Speaker 1: He could make another acquisition. There are things he could do,

679
00:35:59,280 --> 00:36:03,600
Speaker 1: but I do controlling costs, maybe being more strategic about

680
00:36:03,640 --> 00:36:06,560
Speaker 1: what platform you release this piece of content on. I

681
00:36:06,560 --> 00:36:09,319
Speaker 1: think there's little things that could happen. But when it

682
00:36:09,360 --> 00:36:11,480
Speaker 1: comes down to it, I mean, a one point five

683
00:36:11,520 --> 00:36:14,320
Speaker 1: billion dollar hole is a big, big hole to film.

684
00:36:14,920 --> 00:36:17,000
Speaker 1: And you know, there's so many collisions involved in this

685
00:36:17,040 --> 00:36:19,480
Speaker 1: particular story. We were talking earlier about which ones do

686
00:36:19,520 --> 00:36:22,040
Speaker 1: we pick and sort out? But it's sort of interesting that,

687
00:36:22,080 --> 00:36:25,960
Speaker 1: you know, Iger himself as a disruptor. He disrupts his industry,

688
00:36:26,360 --> 00:36:29,960
Speaker 1: he leaves, he then disrupts his own CEO. He comes back,

689
00:36:30,320 --> 00:36:34,080
Speaker 1: and now he's got an outside activist investor who's trying

690
00:36:34,120 --> 00:36:37,680
Speaker 1: to disrupt him in the person of Nelson Pelts. And

691
00:36:37,719 --> 00:36:41,080
Speaker 1: Nelson Pelts could be a Disney character, couldn't he in

692
00:36:41,120 --> 00:36:43,000
Speaker 1: like a certain kind of movie, like the Corporate Raid,

693
00:36:43,600 --> 00:36:45,759
Speaker 1: like you know, with with with like a sword and

694
00:36:45,800 --> 00:36:49,399
Speaker 1: a bandanna or something marching up onto your ship. He's

695
00:36:49,400 --> 00:36:51,160
Speaker 1: a guy who made a name for himself in the

696
00:36:51,239 --> 00:36:54,399
Speaker 1: nineteen eighties, back when movies like Wall Street were being

697
00:36:54,400 --> 00:36:57,640
Speaker 1: made and corporate rats were being glamorized, and they've been

698
00:36:57,760 --> 00:37:03,120
Speaker 1: kind of less apparent, less visible, And then lo and behold,

699
00:37:03,680 --> 00:37:08,000
Speaker 1: he's now inside Disney rattling the cage for change. Right.

700
00:37:08,040 --> 00:37:10,560
Speaker 1: If Bob Iyer is sort of the iconic CEO, he's

701
00:37:10,600 --> 00:37:14,399
Speaker 1: the iconic activist investor. So it's interesting to have these

702
00:37:14,400 --> 00:37:17,399
Speaker 1: two characters paired together now. And how is Pelt seen

703
00:37:18,120 --> 00:37:23,040
Speaker 1: I think by Disney he's viewed as a disturbance, you

704
00:37:23,040 --> 00:37:25,200
Speaker 1: know that he But how is he viewed by sort

705
00:37:25,239 --> 00:37:28,280
Speaker 1: of the investment community, you know the role like activist

706
00:37:28,320 --> 00:37:30,719
Speaker 1: investors sort of say we are here to get better

707
00:37:30,760 --> 00:37:33,600
Speaker 1: returns for investors. Our intentions are noble. This is a

708
00:37:33,640 --> 00:37:36,680
Speaker 1: poorly managed company, and if we hit that company from

709
00:37:36,680 --> 00:37:39,400
Speaker 1: all sides, I'll get better. I mean, he's been pretty

710
00:37:39,400 --> 00:37:43,120
Speaker 1: successful at that, and he is more of a long

711
00:37:43,239 --> 00:37:45,080
Speaker 1: term investor. I think then when you think of a

712
00:37:45,120 --> 00:37:47,960
Speaker 1: typical activist, he's a very large steak in Disney. I

713
00:37:48,000 --> 00:37:51,279
Speaker 1: think it's nearly a billion dollar steak. He has a

714
00:37:51,320 --> 00:37:55,640
Speaker 1: good track record at other companies of actually making change,

715
00:37:55,800 --> 00:37:58,640
Speaker 1: but he's mostly done this at consumer facing companies. So

716
00:37:58,800 --> 00:38:01,000
Speaker 1: p and g HI and things like that. I mean,

717
00:38:01,000 --> 00:38:05,280
Speaker 1: we haven't really seen him take on a media company before,

718
00:38:05,480 --> 00:38:08,040
Speaker 1: and maybe you could argue this is sort of consumer facing,

719
00:38:08,040 --> 00:38:10,319
Speaker 1: but at his heart it's a media company and he's

720
00:38:10,360 --> 00:38:13,040
Speaker 1: got a laundry list of complaints about how Bob Iger

721
00:38:13,080 --> 00:38:16,279
Speaker 1: has managed things. Isn't he, yes, give us those specifics,

722
00:38:16,640 --> 00:38:18,399
Speaker 1: you know. I think some of the big ones are

723
00:38:19,040 --> 00:38:22,239
Speaker 1: he overpaid for Fox, the company is underperformed. One of

724
00:38:22,280 --> 00:38:25,560
Speaker 1: my favorites was that he was complaining about CEO compensation

725
00:38:25,600 --> 00:38:29,400
Speaker 1: and then mentions in his filing how one board meeting

726
00:38:29,440 --> 00:38:31,399
Speaker 1: wasn't going to happen until after a certain day because

727
00:38:31,400 --> 00:38:34,120
Speaker 1: Iger was off on his yacht off of New Zealand

728
00:38:34,160 --> 00:38:37,120
Speaker 1: or something. So just really hitting that point hard. But

729
00:38:37,200 --> 00:38:40,040
Speaker 1: I think in general, one thing that's so interesting about

730
00:38:40,080 --> 00:38:42,640
Speaker 1: this is he doesn't have a lot of really concrete

731
00:38:43,000 --> 00:38:46,080
Speaker 1: suggestions other than add me to the board. That's his

732
00:38:46,200 --> 00:38:48,879
Speaker 1: big thing. Concrete in the sense of this is what

733
00:38:48,920 --> 00:38:51,759
Speaker 1: Disney needs to do to turn its fortunes around exactly,

734
00:38:52,160 --> 00:38:55,319
Speaker 1: And does Bob Iger have those answers, Not that we've

735
00:38:55,320 --> 00:38:59,239
Speaker 1: seen yet. So why did he come back? I mean,

736
00:38:59,600 --> 00:39:01,480
Speaker 1: if he's coming back and he's getting a nice big

737
00:39:01,480 --> 00:39:04,279
Speaker 1: pay package, which he is. He was supposed to come

738
00:39:04,320 --> 00:39:07,399
Speaker 1: back to do what Bob J. Peck couldn't. And yet,

739
00:39:08,600 --> 00:39:11,960
Speaker 1: you know, maybe these are questions more for his psychologists

740
00:39:11,960 --> 00:39:13,920
Speaker 1: than for me, but I think there's probably a big

741
00:39:13,960 --> 00:39:17,920
Speaker 1: piece of his legacy feels tainted by this failed succession. Right,

742
00:39:17,920 --> 00:39:20,319
Speaker 1: he did not pick the right guy to take over

743
00:39:20,400 --> 00:39:23,520
Speaker 1: from him. So there's two ways he could approach this.

744
00:39:23,560 --> 00:39:25,239
Speaker 1: One is he going to spend the next two years

745
00:39:25,239 --> 00:39:27,680
Speaker 1: he has a two year contract really kind of grooming

746
00:39:27,719 --> 00:39:29,880
Speaker 1: someone figuring out who's going to take over for me,

747
00:39:30,080 --> 00:39:33,080
Speaker 1: and that's going to be his main job or is

748
00:39:33,120 --> 00:39:36,000
Speaker 1: it really going to be that plus figuring out what

749
00:39:36,080 --> 00:39:38,880
Speaker 1: this business looks like? You know, I think the company

750
00:39:38,920 --> 00:39:42,040
Speaker 1: has said streaming is the future, this is our bet.

751
00:39:42,880 --> 00:39:46,719
Speaker 1: It still has some assets like ESPN and ABC that

752
00:39:46,800 --> 00:39:49,359
Speaker 1: are what they call linear TV, right, and it kind

753
00:39:49,360 --> 00:39:51,160
Speaker 1: of has to figure out what to do with them.

754
00:39:51,200 --> 00:39:53,880
Speaker 1: How does this fit in the portfolio? So those are

755
00:39:53,920 --> 00:39:56,279
Speaker 1: open questions too. He's got to deal with that. It

756
00:39:56,320 --> 00:39:59,800
Speaker 1: has obviously, you know, the iconic Disneyland and Disney World

757
00:40:00,200 --> 00:40:05,120
Speaker 1: parts that presumably will get busier now except if the

758
00:40:05,160 --> 00:40:09,520
Speaker 1: economy right. So that's a big question mark too. Yeah,

759
00:40:09,640 --> 00:40:11,640
Speaker 1: you know, I guess earlier I wasn't asking as much

760
00:40:11,640 --> 00:40:13,880
Speaker 1: of like for us to be able to listen to

761
00:40:13,960 --> 00:40:18,520
Speaker 1: as sessions with this therapist. Um more just sort of

762
00:40:19,239 --> 00:40:23,319
Speaker 1: what has he publicly said about concrete steps he's going

763
00:40:23,400 --> 00:40:28,440
Speaker 1: to take manager early and strategically to march further into

764
00:40:28,520 --> 00:40:32,080
Speaker 1: the magic Kingdom. I think part of it is again

765
00:40:32,400 --> 00:40:35,319
Speaker 1: the softer stuff, right that he is really known for.

766
00:40:35,560 --> 00:40:38,239
Speaker 1: So I think he's said that the company had a

767
00:40:38,320 --> 00:40:41,799
Speaker 1: morale issho I think talent creative felt like it was

768
00:40:41,840 --> 00:40:44,600
Speaker 1: sort of starting to take a back seat. He's going

769
00:40:44,640 --> 00:40:46,719
Speaker 1: to put that in the driver's seat again. You know,

770
00:40:46,760 --> 00:40:49,040
Speaker 1: I think people love him there, some people do at least,

771
00:40:49,040 --> 00:40:50,920
Speaker 1: you know, I'm sure he has his enemies, but I

772
00:40:50,920 --> 00:40:54,720
Speaker 1: think in general, you know, the company really shown during

773
00:40:54,840 --> 00:40:57,960
Speaker 1: his time as CEO and so there it probably is

774
00:40:58,000 --> 00:41:00,440
Speaker 1: a little bit of that shine with him come back,

775
00:41:00,520 --> 00:41:02,560
Speaker 1: and I think the hope is will that boost morale?

776
00:41:02,600 --> 00:41:05,200
Speaker 1: Will that turn things around? So I think there is

777
00:41:05,239 --> 00:41:07,480
Speaker 1: sort of the actual strategy piece that needs to get

778
00:41:07,520 --> 00:41:09,840
Speaker 1: figured out. But I do also think there is again

779
00:41:10,719 --> 00:41:13,440
Speaker 1: this e Q piece, the softer piece that he has

780
00:41:14,160 --> 00:41:16,560
Speaker 1: and that he's been proven to be very good at Yeah,

781
00:41:16,560 --> 00:41:18,640
Speaker 1: and again with the talent too, with Hollywood talent. He

782
00:41:18,640 --> 00:41:21,799
Speaker 1: knows how to handle that. What have you learned from

783
00:41:21,840 --> 00:41:27,319
Speaker 1: watching Disney? Do you get out with the Bob's in

784
00:41:27,440 --> 00:41:30,080
Speaker 1: terms of trying to get a control on its future,

785
00:41:30,600 --> 00:41:34,719
Speaker 1: a handle on its future? What have I learned? Well?

786
00:41:34,760 --> 00:41:36,400
Speaker 1: This is an interesting one because I do feel like

787
00:41:36,400 --> 00:41:40,080
Speaker 1: the saga is ongoing, so we've not had closure yet.

788
00:41:40,520 --> 00:41:45,560
Speaker 1: But I do think that this question of legacy and leadership,

789
00:41:46,040 --> 00:41:51,239
Speaker 1: if you can't figure out who can take over from you,

790
00:41:51,320 --> 00:41:53,719
Speaker 1: what the company looks like when you're no longer, there

791
00:41:54,120 --> 00:41:57,600
Speaker 1: doesn't matter how good a CEO you are. If you

792
00:41:57,680 --> 00:42:02,040
Speaker 1: can't somehow preserve the few year of the company when

793
00:42:02,040 --> 00:42:05,360
Speaker 1: you're gone, I think that's a huge failing. So kudos

794
00:42:05,360 --> 00:42:08,279
Speaker 1: to him for those fifteen years, But what do the

795
00:42:08,320 --> 00:42:11,239
Speaker 1: next fifteen years look like? And not having a successor

796
00:42:11,280 --> 00:42:14,080
Speaker 1: in place that you think can really handle that is

797
00:42:14,120 --> 00:42:16,520
Speaker 1: a huge Disney problem. That's an Iger problem. But I

798
00:42:16,520 --> 00:42:19,000
Speaker 1: think that's a Corporate America problem and a board problem.

799
00:42:19,080 --> 00:42:21,680
Speaker 1: Huge board problems. The board has to interview right and

800
00:42:21,760 --> 00:42:24,480
Speaker 1: say we want management to evolve in a certain direction. Right.

801
00:42:24,520 --> 00:42:26,360
Speaker 1: I mean, I think that in and of itself is

802
00:42:26,440 --> 00:42:29,000
Speaker 1: very telling, right, like this is the board's job, Like

803
00:42:29,080 --> 00:42:31,319
Speaker 1: they're the ones that are supposed to be figuring this out.

804
00:42:31,400 --> 00:42:33,360
Speaker 1: And if they have sort of kicked it over to

805
00:42:33,400 --> 00:42:36,080
Speaker 1: Iger to figure out, I mean that's where they should

806
00:42:36,120 --> 00:42:39,920
Speaker 1: be this one by really quickly bev Yes, I love

807
00:42:39,960 --> 00:42:42,439
Speaker 1: come back against any time, have me anytime I will.

808
00:42:42,760 --> 00:42:45,200
Speaker 1: I will have you back soon. Excellent, Thank you, Thank you.

809
00:42:46,840 --> 00:42:52,839
Speaker 1: Here at Crash Course, we believe the collisions can be messy, impressive, challenging, surprising,

810
00:42:53,440 --> 00:42:58,040
Speaker 1: and always instructive. In today's Crash Course, I learned that

811
00:42:58,200 --> 00:43:04,000
Speaker 1: succession planning really matters because nothing could last forever. Continuity

812
00:43:04,080 --> 00:43:08,440
Speaker 1: is important in boards. Shouldn't just defer to CEOs who

813
00:43:08,520 --> 00:43:11,440
Speaker 1: want to hang around for a really long time. What

814
00:43:11,480 --> 00:43:14,719
Speaker 1: did you learn? We'd love to hear from you. You

815
00:43:14,760 --> 00:43:18,600
Speaker 1: can tweet at the Bloomberg Opinion, handle at Opinion or

816
00:43:18,680 --> 00:43:23,400
Speaker 1: me at Tim O'Brien using the hashtag Bloomberg Crash Course.

817
00:43:24,160 --> 00:43:26,480
Speaker 1: You can also subscribe to our show wherever you're listening

818
00:43:26,600 --> 00:43:29,200
Speaker 1: right now and leave a review. It helps more people

819
00:43:29,200 --> 00:43:33,120
Speaker 1: find the show. This episode was produced by the Indispensable

820
00:43:33,280 --> 00:43:38,200
Speaker 1: and am Azarakis and Me. Our supervising producer is Magnus Hendrickson,

821
00:43:38,560 --> 00:43:41,720
Speaker 1: and we had editing help from Katie Boyce, Jeff Grocott,

822
00:43:41,880 --> 00:43:45,800
Speaker 1: Mike Niezza and Christine vanden Biler. And a special thanks

823
00:43:45,800 --> 00:43:50,920
Speaker 1: today to our video guru, Thought Seen, Robbie Blake Maples

824
00:43:50,920 --> 00:43:53,719
Speaker 1: does our sound engineering and our original theme song was

825
00:43:53,760 --> 00:43:58,000
Speaker 1: composed by Luis Gara and I'm Tim O'Brien. We'll be

826
00:43:58,000 --> 00:44:01,680
Speaker 1: back next week with another Crash Course four