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Chris Hill: We begin this week with surprising news out of the Magic Kingdom. Chief Operating Officer
Tom Staggs has worked for the Walt Disney Company for more than 25 years, and was widely
seen as the heir-apparent to become CEO when Bob Iger steps down in two years. But, that
is now over. According to the New York Times, Iger met with Tom Staggs in mid-March and
told him that the board of directors would be widening the search for the next CEO. And
Staggs, Simon, decided to leave the company in early May. So, now, Disney has to find
not just someone to be the next CEO in a couple of years, but they have to find
a chief operating officer, too.
Simon Erickson: And how do you replace Bob Iger, right, Chris? I mean, this is a guy
who's a legend. Hail to the chief, great chief executive officer for Disney for the last
decade. Share price has almost quadrupled under his tenure. He's always been kind of
thought of as the media juggernaut that is Disney. The acquisitions of Lucasfilm, and
Marvel, and companies like this. But I think the transition, when and if this ever happens,
is going to have to be from, "Hey, we've got a great media empire, we made some great media
acquisitions out there." I think the next phase for Disney is going to be digital distribution
out there. You've got Netflix and Amazon that are broadcasting pretty good content over
the internet now, and I think Disney ... they have that content, but I think they're a step
behind on figuring that part out.
Hill: Jason, I like the fact that this is a show of strength by the board of directors.
As investors, we want to see our boards of directors not just rubber-stamping someone.
Jason Moser: Sure.
Hill: By the same token, Tom Staggs is no slouch. There's a reason he was widely seen
as the next CEO. And they have a problem in the C-Suite now.
Moser: What was that in Caddyshack? "Come on Judge, you're a tremendous laugh." I just
... maybe he just really doesn't have what it takes, and maybe that's what they ascertain
from this. Honestly, we've talked a lot about this -- how do you follow in the footsteps
of what Bob Iger has done? It has been really phenomenal. Simon mentioned the trifecta of
acquisitions that he's headed. It's not to say that nothing else will happen while he's
still there. I honestly think shareholders will probably be okay with him sticking around
for a little while longer.
To your point, yeah, you never want to see a board rubber-stamping something like this.
They do really need to figure out the strategy in regard to ESPN and this move to over-the-top
distribution, because it is something that's going to come to fruition here at some point.
They've mentioned it on a number of calls, and because ESPN is such a profitable and
important part of the business, they kind of have all their other ducks in a row. This
is the question mark that's still out there. So, I think they just need to make sure they
have an executive who's going to be able to leave them forward in regard to this strategy.
Hill: Andy, where do you think they go here? Do you think Iger stays on for another year
or even longer?
Andy Cross: I'm wondering if Tom Staggs is checking his LinkedIn profile and who has
endorsed him, what skills, has Bob Iger taken his away from him. Certainly, I think it extends
the timeline of when Iger can hand over the baton, pass it to a leader. And who that is
... one conversation we were talking about, it was really interesting, is Steve Burke,
who's over at NBCUniversal, which is a subsidiary of Comcast. It was his father, who along with
Tom Murphy who built Capital Cities. Burke is president of a media division. He's under
in a company Comcast that his family-owned, run by the Roberts family. Probably not going
to take the helm of that job any time soon. Could be an interesting opportunity for him.
Erickson: I'm throwing Sheryl Sandberg in the hat as well, Chris.
Hill: She is on the board of directors. It wouldn't be the first time we saw someone
move from the boardroom to the CEO's office.