Disney’s New World Order Leads to Confusion and Bruised Egos

Bob Chapek Disney Investor Day 2020
Courtesy of Disney

The Walt Disney Company is in the throes of a major leadership shift, with newly minted CEO Bob Chapek asserting more authority as the longtime leader he replaced, Bob Iger, prepares to surrender his executive chairman role for emeritus status at year-end.

The two men’s once-warm relationship has grown strained, according to four insiders. This comes as Chapek has overseen a 2020 reorganization that centralized the media company’s content distribution and ad sales.

At the corporate level, Iger has moved “much more into the background than he was a few months ago, even on the creative side,” insiders say. In a sign of the leadership transfer taking place, Chapek has not only joined Iger in creative meetings but actually convened some this spring with top creative teams in television under Peter Rice and Dana Walden.

“Everyone is becoming more and more deferential to Chapek,” according to one Disney executive who asked not to be identified. “Things are radically different than they were six months ago.” The insider noted that the senior leaders have tried to “insulate” the creative teams from all the upheaval.

Others say that Chapek was initially hesitant to assert himself more on the creative side because after he assumed the CEO job in February 2020 his attention was focused largely on dealing with keeping Disney afloat at the height of the pandemic after the company’s theme parks were forced to shut down, production halted and movie theaters closed. For the most part, Chapek’s style has gotten positive reviews. He lacks Iger’s flash and charisma, but as an insider notes, “He’s coming into his own. He lets you know what he wants without imposing it.” Iger loved to discuss and debate different initiatives, while Chapek prefers to delegate more tasks and makes decisions. Disney sources point out that the two have very different personalities and approaches, which some can find disconcerting at times.

To some inside the media company, Disney’s move last October to restructure its operations elevated the executives who distribute Disney movies and shows over the ones who actually oversee their production. The shakeup also granted a great deal of influence to a top Chapek ally Kareem Daniel, who was elevated to chairman of Disney Media and Entertainment Distribution from his previous role overseeing consumer products.

“It’s a very different place and a very different organization,” a Disney insider said. “Kareem has huge authority and power.”

Disney’s reorganization of its media and entertainment business into three distinct content creation groups — studios, general entertainment and sports — has caused consternation for some senior managers as well as those doing business with the company. The reorganization was aimed at better positioning Disney for a future that would be determined by its success in streaming. The goal, at least on paper, was to have people work more harmoniously across mediums, from television to film to Disney Plus. The result has left people deeply confused about how to navigate the new order.

Hollywood dealmakers noted that the new structure at Disney is byzantine and more convoluted than necessary, adding an extra managerial layer into the process of getting projects made.

In the restructuring, top division heads have lost oversight of P&L, which has been a tough pill to swallow for the likes of FX chief John Landgraf and Peter Rice, the chairman of Disney General Entertainment Content, who has grown frustrated that some of his responsibilities have been taken away. “That is inaccurate,” Rice told Variety. That control was an integral part of running their respective business units, given that those who deliver the best profit/loss numbers to their corporate chief often had the most authority and swagger on the lot. Now, the creative side doesn’t have those bragging rights, which means that they spend money on content while the distribution side rakes in the revenue and with it the glory.

When Iger departs in December, it is expected that Walt Disney Studios Chief Creative Officer Alan Horn will also leave. Horn’s departure could be destabilizing as he has been the creative guiding force at the studio for the past nine years. When he joined the studio in 2012 after a long and successful tenure at Warner Bros., Horn was tasked with reinvigorating a film division that had suffered from a string of high-profile flops such as “The Lone Ranger” and “John Carter,” as well as the turbulent leadership of Rich Ross, a former Disney Channel chief who had conflicts with some other managers, including the heads of Pixar.. When he joined Disney, Horn, an avuncular and deeply respected executive, promised that there would be harmony in the Magic Kingdom, again. “I fully expect to be a stabilizing force,” Horn vowed. “All I want to do is be helpful and keep the waters as calm as they can be.”

Insiders at Disney say Alan Bergman, the former co-chairman of Walt Disney Studios with Horn, who was recently elevated to chairman of Disney Studios Content, will be taking the reins solo. There’s no plan for the company to bring in another creative head once Horn retires. Over the last year, while Disney has forged ahead during the pandemic, it is Bergman who has led the charge on the studio side, while Horn has dialed down his responsibilities.

While Bergman has been involved in all creative meetings at the studio, many within Disney and in the creative community at large, however, view him as having more business acumen than artistic sensibilities. He previously held a number of operations and finance roles. And people also wonder if the job, which now includes developing projects for streaming outlets, is too big for one person to handle given the increasing complexities of the business.

Bergman and his team will have to manage competing fiefdoms of power to ensure that the studio’s various brands play nicely together. These include Pixar, under the leadership of president Jim Morris and chief creative officer Pete Docter, as well as LucasFilm, overseen by Kathleen Kennedy, and Marvel, ruled by Kevin Feige. Of these heads, Feige is seen as the most essential executive, having proved his mettle with the massive success of the Marvel Cinematic Universe and streaming shows like “WandaVision.” After it was announced in 2019 that Feige would produce a “Star Wars” movie, there were rumors that he might assume more control of Lucasfilm. However, insiders say that Feige is fully committed with his Marvel duties and has no ambition to lead Lucasfilm or take more of a role. Few details have emerged about the “Star Wars” film he wants to make, and no production timeline has been set.

Bergman keeps a lower profile than other Disney executives like Feige or Kennedy, but insiders say he has earned their trust over the years. He’s credited with understanding how to sustain franchises, and his allies say he has more creative chops than he is given credit for, routinely giving notes to filmmakers. Several Disney insiders expressed doubts that Feige, Kennedy, Morris and Doctor would willingly report to anyone other than Bergman. They also argue that the heads of the Marvel, Pixar, and Lucasfilm brands have their own artistic chops, making it unnecessary to find one studio executive to serve as creative ringmaster.

One source took a philosophical view of the film studio’s structure post-Horn, saying it would “define the ambition of Disney going forward.” If the unit’s longterm plan is to maximize its existing content engines, Bergman will rule the kingdom, they said. If the studio wants to use the security of their top-earning intellectual property to invest in originals and create wholly original franchises, they will need a creative successor in the vein of Horn. They noted that many of the company’s highest-grossing franchises such as “Star Wars” and “The Avengers” have been around for years, while others, such as “Pirates of the Caribbean,” need to be rebooted. In order to stay viable, a studio needs to produce new franchises in order to replace the ones that grow long in the tooth.

“You need that project that will inspire the next roller coaster,” the source said. Or, vice versa, as was the case with Disney’s “Pirates of the Caribbean” franchise and the upcoming “Jungle Cruise.”

The changing power dynamics and issues that Chapek face are similar to the ones confronting other media companies. Streaming has upended the old ways of doing business, with consumers spending more money on subscription services like Netflix and less on cable and big-screen movies. That’s led to an onslaught of new challengers to Netflix such as Comcast’s Peacock, WarnerMedia’s HBOMax, and the Disney-owned Hulu, ESPN Plus, and Disney Plus. It’s also prompting media companies to reshape their operations (Like Disney, Universal and WarnerMedia have also recently undergone reorganizations), and that’s led to a sense of displacement for movie and television business veterans.

“Studios don’t look like studios anymore,” sighed one producer.

Cynthia Littleton contributed to this report.

This report was updated on May 14, 2021 at 2:15 pm PT to reflect Peter Rice’s comment.