Earlier this week, Bob Iger returned to Burbank for the first time since being reinstated as the chairman and chief executive of The Walt Disney Company. Not surprisingly, he was greeted with a hero’s welcome—the sort of praise lavished on a C.E.O. who 5x-ed his company’s market cap during his fifteen year tenure, and whose reinstatement nearly singlehandedly overturned a sell-off prompted by his predecessor’s earnings call fiasco. Dressed in a Mr. Rogersesque cardigan and open-collared white shirt, Iger acknowledged the “challenging times” ahead, the need to take decisive action, and the importance of restoring responsibility and accountability to the creative business.
He fielded some questions and offered some candid assessments on the state of the media, including the inexorable decline of linear television. Then, upon finishing, was treated to a standing ovation. “Disney employees seemed overjoyed to see Mr. Iger,” Brooks Barnes reported in the Times.
Iger’s Odysseus-style homecoming is more than a little anachronistic these days. Without belaboring the classics metaphor, I have noted before that tech and media executives are like Greek gods, dramatis personae from another realm who wield power over how we experience the world, but those currently commanding our attention have recently taken their extended turn in the barrel. Of course, Bob Chapek’s own brief stint on Mount Olympus was rife with controversy and error, from his ill-advised corporate reorg to the mishandling of the “Don’t Say Gay” debacle to that final disastrous earnings call. Elon Musk has been live tweeting his interior monologues and picking public fights throughout his chaotic overhaul of Twitter. Sam Bankman-Fried is just the latest in a long line of young wunderkind entrepreneurs brought down by crises of their own making. Andrew Ross Sorkin’s effortlessly brilliant interrogation of him this afternoon at the Dealbook conference suggests that S.B.F. wasn’t emotionally prepared to run a lemonade stand, much less a multi-billion dollar, multinational financial trading apparatus and hedge fund.
Mathias Döpfner, the Axel Springer chief who is busy building a global media empire, has dealt with persnickety press as Morning Brew makes staff reductions and Insider rejiggers its paywall strategy. The media that covers media for a living can often mistake layoffs as an unassailable tragedy, but alas, shit happens, and companies need to pivot from lines of business that aren’t working to those that might. Döpfner will presumably make this nuanced point, among others, at a forthcoming backgrounder lunch with top editors and executives from the Times, Fortune, Fast Company, Bloomberg, Time and Semafor on Friday, I’m told.
Media narratives can change in a flash in this business. David Zaslav, not long ago fêted across Hollywood in the wake of his WarnerMedia megadeal, is now better known for eliminating jobs and failing to convince analysts on Wall Street that he can overcome a nearly $50-billion debt load. The debt may have been secured at more favorable terms, before Jerome Powell’s recent rate hikes, but as my Puck partner Bill Cohan has noted eloquently, WBD’s $48 billion of net debt is still 5.1x WBD’s last 12 months adjusted EBITDA of $9.3 billion. That’s a lot of leverage. Meanwhile, his deputy Chris Licht has sapped morale at CNN, even if unintentionally, by implementing the job cuts he once promised not to make. Those went into effect today, and will continue through the week.
As I’ve noted before, Licht can’t be blamed for having to relieve staff. During the Zucker era, particularly during the Trump years, CNN grew to unprecedented heights. We all know by now that the Zaz-Malone plan was to make the network more centrist, less bombastic, less-ego-driven, smaller, etcetera. Zaz may not have known that inflationary headwinds would ratchet up such pressure on the business in his first year. And Licht, despite his lack of C-suite experience, probably should have realized that the first rule of corporate Fight Club is that you never say you’re not laying anyone off. The markets are too unpredictable. Now, Licht has finally set in motion the long-anticipated course correction, which, as I reported earlier this month, will affect hundreds of employees and seek to trim $100 million from the CNN budget.
Despite weeks of advance notice, Licht’s memo to staff today “landed like a thud in the newsroom,” one staffer there told me. “It is incredibly hard to say goodbye to any one member of the CNN team, much less many,” Licht wrote. “I recently described this process as a gut punch, because I know that is how it feels for all of us.” The exact extent of the layoffs is still not known. Paid contributors were notified of the cuts today, but most impacted employees won’t know their fate until tomorrow. Staffers across the company’s domestic and international bureaus will be affected.
Were the cuts unavoidable? Under the new WBD plan, probably. But they are exacerbated by Licht’s absence of a signature masterstroke at 9 p.m or in daytime, and a lack of purpose among many on his staff. CNN executives like to herald the growth in digital, but that was already afoot under Andrew Morse in the Zucker era when the network contemplated competing with the New York Times. Licht, who has weathered a turbulent foray at the network, will probably enjoy the narrative reset offered by the holidays.
The reputations of media executives rise and fall, often with the economy, obviously, and yet Iger still seems to be above it all. It’s not merely because of his largely successful tenure at the helm of Disney, and the aggressive acquisition strategy that positioned the company for success even in the era of Apple and Amazon. There is also the effortless charm, the calm discipline, those 5 a.m. runs, the Tom Ford shirts, and the absence of body fat, all of which makes him the envy of his peers, and a constant source of fascination. While many executives struggle to avoid controversy and fight too hard to be liked, Iger seems to put people at ease—employees, fans, investors—with his well-tanned and well-coiffed aura, as though he walked straight off the set of a Nancy Meyers movie, her platonic ideal of a 71-year-old C.E.O. His very presence on the sound stage in Burbank was a balm on Disney’s recent wounds. The storm enveloping Disney may not have abated, but at least there was a reliable and steady hand on the wheel.
The question hanging over Iger and Disney, of course, is, what now? Because eventually Disney will need more than cool charm and lean muscle mass. Comforting as the 45-minute town hall may have been for Disney employees, it did not yield much in terms of a plan for Disney going forward other than undoing the damage Chapek did to Disney’s style and culture. “Iger will fix the style and culture stuff quickly,” one veteran media executive noted. “The strategic stuff isn’t easy.”
My Puck partner Matt Belloni recently compiled an ace cheat sheet of Iger’s potential successors (I might add EA’s Andrew Wilson to the list). And while finding a replacement for Chapek is a key piece of his mandate, it is secondary to the more titanic issues of what to do with Hulu, ESPN, and ABC, restoring Star Wars, and more. As Matt noted, Iger is looking for a successor who can demonstrate “courage.” And it goes without saying that the most gifted media executive of his generation probably counseled himself with the same advice.