Bob Iger’s stunning return as Disney CEO throws all of Bob Chapek’s major decisions into question

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  • Sources told CNBC that Bob Iger did not approve of several of Bob Chapek’s changes to Disney, despite him choosing him as his successor in early 2020.
  • Disney shares have fallen more than 40% this year, partly due to weak fourth-quarter financial results earlier this month.
  • The biggest point of contention may be Chapek’s reorganization of the company, which created a new division called Disney Media and Entertainment.

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Bob Iger’s shocking return as DisneyThe CEO immediately questions several major decisions made by outgoing CEO Bob Chapek.

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Disney shares, which rose about 8% in premarket trading on Monday, are down more than 40% this year, partly due to weak fourth-quarter financial results earlier this month.

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Disney’s board of directors’ decision to replace Czapek with Iger suggests that he has more confidence that Iger will do better. Iger disapproved of several of Chapek’s changes at Disney despite him choosing him as his successor in early 2020, according to people familiar with the matter, as CNBC reported earlier this year.

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The biggest point of contention may be Chapek’s reorganization of the company, which created a new division called Disney Media and Entertainment, or DMED, and consolidated budgetary authority for Disney’s content and distribution divisions under Kareem Daniel. Reversing a complete restructuring of the company would be messy and time consuming, but it’s hard to imagine Aiger keeping the Čapek organization in place. Daniel’s position in the company also becomes more precarious. He has close ties to Capek.

Iger also felt that Disney+ should undercut the prices of competing streaming services in order to maximize the perception of value for money among consumers. Chapek decided to raise the price of Disney+ to $10.99 ad-free as of Dec. 8, making it more expensive than other ad-free streaming services like Paramount+ and NBCUniversal’s Peacock. With only a few weeks left until Dec. 8, it may be too late for Iger to back out of a price increase — or a decision to price Disney+ with $7.99 a month ads instead of a lower price — but it’s possible.

The two leaders do not disagree on everything. Both have long championed the value of ESPN and Hulu, most of which are controlled by Disney. Disney has an option to buy Comcast’s 33% stake in Hulu in January 2024. Capek expressed his desire to continue this deal. Given Iger’s support for the three-way streaming strategy of Hulu, ESPN+, and Disney+, it’s likely that he will do the same.

But Aiger clashed with Čapek’s initial handling about how Disney responded to Florida’s controversial “Don’t Say Gay” law by privately voicing concern about how it might affect the Disney brand. Unsurprisingly, Eiger’s first step, before rolling back any of Capek’s structural changes or moving away from direct consumer spending, is to bring a sense of pride back into the corporate culture.

WATCH: Bob Chapek and Bob Iger’s strained relationship

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