3 Min Read
NEW YORK (Reuters Breakingviews) - Bob Iger may swing for a three-peat. The Walt Disney chief executive is considering delaying for the third time his departure from atop the House of Mouse. It's a sign the media conglomerate has failed in efforts to find his replacement since Tom Staggs left last year. Clinging to power, though, can get messy.
Executives within Disney are betting that Iger, who has run the company for 12 years and turns 66 on Friday, will have to stick around longer, according to a report in the Wall Street Journal. By all accounts, Iger is a worthy boss. Since he took over in 2005, Disney's market value rose from $46 billion to about $148 billion at the end of its fiscal 2016 year. Total shareholder return over the same period increased 350 percent, Disney said in its proxy.
Beyond the numbers, Iger has boosted the company in other ways by making savvy acquisitions such as the $4 billion deal for "Star Wars" studio Lucasfilm. And no company is better at cross-promoting its products: Princess Elsa costumes from the animated hit "Frozen" are a big hit with toddlers, for example.
A successor will need time and guidance to learn the ways of Disney's sprawling divisions, from movie studios to theme parks to cable networks. Challenges are cropping up too: cable sports network ESPN, traditionally the company's biggest money-spinner, is losing subscribers as more people drop pay-TV packages. Navigating the hurdles of changing media habits will take exceptional fortitude.
CEO longevity can bring needed experience and stability. That's useful in a crisis - Lloyd Blankfein at Goldman Sachs and JPMorgan's Jamie Dimon have run their companies almost as long as Iger, for example. But it can also store up resentment among underlings and risk complacency. Dick Fuld, for example, headed Lehman for 14 years before its collapse.
Iger has a cautionary tale much closer to home: his predecessor Michael Eisner's 21 years in command came to an end after a series of bumbling decisions and his rancorous spat with deputy Michael Ovitz sparked an investor revolt. Iger has been good for Disney but he too risks overstaying his welcome.
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.