Mayhem in the Magic Kingdom: Disney ‘Don’t Say Gay’ Walkout Underlines Bob Chapek’s Leadership Crisis

Disney Dont Say Gay Bill Bob Chapek
Michael Buckner / Variety

Disney CEO Bob Chapek is facing a crisis of confidence in his leader­ship that is fueling an atypical level of turmoil at the top of the world’s largest entertainment company.

Though Chapek’s current em­ployment contract, expiring next February, is expected to be renewed soon, according to sources, his tenure as CEO has been marked by upheaval since he was named to the job in February 2020. Some of the disruption has been far out of his control, such as a global pandemic. But Cha­pek’s own missteps reflect his tendency to keep counsel with a small group of senior executives rather than solicit wider opinions on key decisions.

“Chapek has had to deal with a series of catastrophes,” notes Peter Newman, the head of NYU’s Tisch School of the Arts’ MBA/MFA program, who observes that Chapek took over the company when COVID was upending the media and theme park businesses. “But many of his wounds have also been self-inflicted. A lot of top-level people in Hollywood know how to be smooth and handle things with finesse, and he has not shown that he has that ability.”

Chapek may not be in trouble with Disney’s board, but he’s in the doghouse with the company’s 200,000-plus employees around the world. Disney’s bungled response to Florida’s effort to pass the “Don’t Say Gay” bill, which would severely restrict public school teachers’ ability to address LGBTQ-related subjects in the classroom, has sparked a revolt among many employees. The anger over the company’s failure to stand up to the latest politically motivated effort to demonize the LGBTQ community also brought to the surface resentment over the company’s lack of non-heterosexual-centered characters and storylines.

All of this was on display outside Disney studio gates in Burbank on March 22 when a small group of protesters gathered to coincide with the planned employee walkout here and in Florida. The sight of protesters outside Disney has only served to make Hollywood nostalgic for Chapek’s predecessor, Bob Iger, who has taken on the nickname “Saint Bob” in the nearly three months since he retired from his role as Disney executive chairman at the end of last year.

Chapek was already grappling with tough comparisons to Iger, who set the standard as an entertainment CEO for being polished in public, daring in business, artistically engaging with talent and a visionary on the future of media. Iger was also unafraid to take positions on social and political issues he believed in, whereas Chapek initially chose to stay mum on Florida’s Don’t Say Gay bill, which backfired badly inside Disney.

Chapek sought to quell the uprising over the Florida bill by apologizing (“I let you down,” he told employees on March 11) and announcing the company would pause donations to politicians in Florida.

This past weekend, CNBC published a detailed report on the turbulence inside the Magic Kingdom and the frayed relationship between Chapek and Iger, which only served to make many inside and outside Disney feel wistful for the way that Iger was always seen as the steady hand at the helm.

NYU’s Newman notes that under Chapek, Disney allowed a spat with Scarlett Johansson over the actor’s compensation for “Black Widow” to erupt into a lawsuit in a messy way that did little to endear him to Hollywood’s talent community.

Some of the issues, experts say, may have to do with the fact that Chapek came up through Disney’s home entertainment and consumer products divisions before transitioning to run the company’s theme parks. Those are major profit centers, but they are not the most public-facing parts of the company, nor are they creative-driven.

“Chapek rose up through the ranks as an operations guy and an outstanding one at that,” says Gene Del Vecchio, adjunct professor of marketing at the USC Marshall School of Business. “But when he’s had to put out fires as CEO, he’s stumbled on the political aspects of the job.”

For now, Disney insiders see no credible scenario where Chapek is ousted as CEO anytime soon. The complexity of running the entertainment giant would be daunting for any outsider, which is one of the reasons Chapek got the CEO nod after a yearslong bake-off with other top execs.

Moreover, Disney’s board of directors is full of fellow C-suite executives from public companies — such as General Motors CEO Mary Barra and Lululemon chief Calvin McDonald — who have weathered their own PR crises and scandals. Buoyed by the surprisingly strong earnings in the final quarter of 2021 (Disney’s fiscal Q1) that Disney delivered in February, Chapek’s stock remains high in the boardroom.

But the board also can’t ignore forever internal morale issues and concerns that Disney’s stature may have diminished in the creative community.

If Chapek is granted more time, he will need to start finding a part of the portfolio to reimagine in a way that cements his legacy. Michael Eisner, who ran Disney from 1984 to 2005, was credited with revitalizing its animation studio. Iger bet big on megabucks acquisitions of Pixar, Marvel, Lucasfilm and 21st Century Fox that gave the company a formidable arsenal of intellectual property, and then pushed Disney to reorganize its entire media business to compete with Netflix as a streaming giant.

So how can Chapek make his presence felt?

“The question remains: Is Bob Chapek a visionary, who can articulate a path forward for Disney that is big and bold, or is he a caretaker, who manages what he inherits well but can’t determine what’s the next big thing?” says Del Vecchio. “That has yet to be determined.”