Walt Disney (DIS, Financial) has announced plans to replace CEO Bob Iger in early 2026, a delay from the original 2025 timeline. This decision follows pressure from activist investor Nelson Peltz (Trades, Portfolio), who criticized the lack of progress in succession planning.
Additionally, James Gorman, stepping down as Morgan Stanley's (MS, Financial) CEO at the end of 2024, will take over as Chairman of Disney's Board from Mark Parker on January 2, 2025.
- Disney is focused on turning around its Direct-to-Consumer (DTC) business. Under Iger's leadership since November 2022, the DTC segment has improved significantly, posting a $47 million operating profit in 3Q25, compared to a $512 million loss in the previous year.
- Despite progress in DTC, Disney's stock has remained stagnant since Iger's return, while the S&P 500 has gained 48%. The theme park segment is currently a concern, with decreased demand impacting revenue.
- Consumer preference for affordable travel options has affected Disney's domestic theme parks, leading to a 3% dip in operating income for Q3 to $2.2 billion, with expectations of a mid-single-digit decline in Q4.
- The next CEO will need to focus on revitalizing the Experiences segment, supported by a $30 billion investment plan for theme parks over the next decade.
- Given Disney's strategic shift towards sports, the new CEO might have a background in professional sports or within Disney's ESPN network. Candidates include ESPN Chairman Jimmy Pitaro, Experiences Chairman Josh D'Amaro, and Entertainment Co-Chairmen Dana Walden and Alan Bergman. Disney plans to launch an ESPN-only streaming service in late 2025.
Today's announcement provides some clarity on Disney's succession planning, but questions remain about the future CEO and ongoing challenges like reduced theme park demand.
