How Bob Iger Remade the House That Walt Built

Instead of the easy fixes, Bob Iger played the long game by addressing Disney’s cultural issues head-on, by making it stronger and more profitable with greater depth.

The $45 billion company with 175,000 employees has grown too large to be run from the top down. It now comprises four divisions and five key brands, Disney, ESPN, ABC, Marvel and Pixar. It also consists of cruises and theme parks around the world. The most ambitious is Shanghai Disney, now under construction and due to open in 2015. Observers reckon it will be Iger’s capstone achievement. (His current contract expires in June 2016.)
The payoff has been dramatic. During Iger’s tenure through the end of the 2013 fiscal year, Walt Disney’s total shareholder return was 202 percent. In other words, if you invested $100 at the beginning of his tenure, your investment would have been worth $302 at the end of 2013. In addition, the company’s share price recently hit an all-time closing high of $79.23 in February. The stock was just $23.81 when Iger became CEO. What’s more, the company’s market cap reached $130 billion for the first time ever.

Other recent milestones from last year include:

  • Revenues and profits reached new highs for three years running.
  • Film releases generated the best box office results in Disney history.
  • Record attendance at company theme parks in California, Florida, Tokyo and Hong Kong.
  • Consumer products divisions posted its first $1 billion profit year—without fully benefiting from the Star Wars bonanza following the acquisition of Lucasfilm.
  • In addition to Disney’s animation app for iPad, six of the 10 most popular downloads on Amazon Kindle were Disney apps. ESPN’s user traffic on mobile devices exceeded that on desktops.

Always admired, Disney topped last year’s ranking by the Reputation Institute, a private firm that measure’s consumer’s perceptions. In 2012, it ranked 17. It ranks ninth overall in Fortune’s list of the most admired and second on Barron’s 100 most respected companies.

With the possibility of Iger’s stepping down less than two years off, the contest over who will replace him looms. The departure of Disney Media Networks co-chairman Anne Sweeney, one of the company’s two top television executives—along with ESPN head John Skipper—focuses the spotlight more intensely on two candidates: resorts chairman Thomas Staggs and CFO Jay Rasulo. In 2010, Iger had the two switch jobs, a move that gave Staggs his first operational experience and Rasulo involvement in financial decision-making.


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