Bob Iger is returning to Walt Disney Co. as CEO less than a year after he retired, a surprise comeback that coincides with the entertainment company's attempt to boost investor confidence and profits at its streaming media unit.
Iger, who retired last year after 15 years as chief executive, has agreed to serve as CEO for two more years effective immediately, Disney said in a statement late on Sunday. He will replace Bob Chapek, who took over as Disney CEO in February 2020, just as the COVID-19 pandemic hit, leading to parking closures and restrictions on visitors globally.
Disney's shares have fallen more than 40% so far this year, lagging the nearly 7% year-to-date drop in the broader Down Jones Industrial Average.
"The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period," chairwoman Susan Arnold said in the statement.
Disney disappointed investors this month with an earnings report that showed mounting losses at its streaming media unit that includes Disney+. Shares hit a 20-year low the day after the fourth-quarter earnings.
The streaming business lost nearly $1.5 billion in the quarter, more than twice the previous year's loss, overshadowing subscriber gains. The unit, which competes with Netflix Inc. among others, has yet to turn a profit since its 2019 launch. Disney has said it expects Disney+ to become profitable in fiscal 2024.
"I am an optimist, and if I learned one thing from my years at Disney, it is that even in the face of uncertainty-perhaps especially in the face of uncertainty-our employees and Cast Members achieve the impossible," Iger said in a memo to employees seen by Reuters.
Iger exited Disney on a high note as the company led the battle against rival Netflix in the streaming wars. During his tenure, Disney made several key acquisitions, including Pixar Animation Studios, Marvel Entertainment and the 21st Century Fox, and boosted its market capitalization fivefold.
During this second tour, Iger has been charged with "setting Disney on a path to renewed growth" and working with the board to identify a successor, the company said.
There was no after-hours trading in Disney shares. The stock last closed at $91.80 on Friday, up 0.38%.
The leadership change caught employees by surprise, two company sources said.
Outgoing Chapek became CEO in February 2020, succeeding Iger, who stayed at Disney through 2021 to ease the transition. The board had just renewed Chapek's contract in June.
During his short tenure, Chapek had to navigate theme park closures and production shutdowns during the pandemic.
He became engulfed in an internal dispute with staff, who blasted him for remaining silent on Florida legislation that would limit classroom discussion of sexual orientation and gender identity.
In 2021, Chapek also fought a highly publicized battle with Scarlett Johansson, star of Marvel's "Black Widow" film, over Disney's decision to simultaneously release the movie in theaters and online. The dispute over compensation resulted in a lawsuit that was settled within months.
In August, activist investor Daniel Loeb began pushing for changes at Disney, including spinning off the ESPN sports television network and accelerating the planned takeover of Hulu from minority-owner, Comcast Corp. The investor later tweeted that he better understood ESPN's value to Disney.
Shortly after Iger's return to Disney was announced, Netflix co-founder Reed Hastings tweeted: "Ugh. I had been hoping Iger would run for President. He is amazing."