Bob Iger makes shocking return to head Disney. Here's what it means

Some industry-shaking news came down the wire later Sunday night: Bob Iger, the former CEO of the Walt Disney Co., is making a return to head the company, replacing his successor, Bob Chapek.

"We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic," Susan Arnold, chairman of the board, said in a statement, per The Hollywood Reporter. "The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period."

Multiple sources expressed delight to EW about the change. "This is what we've all been hoping would happen forever," says one employee.

They're not the only ones who are thrilled, either: Disney stock has already risen since the announcement. According to Forbes, shares in pre-market trading were up 9.3 percent at $100.29 as of 7 a.m. ET on Monday.

"We raise the valuation multiple to reflect our greater confidence in the company's trajectory under the leadership of returning CEO Bob Iger," MoffettNathanson analyst Michael Nathanson explained in a Monday report, per The Hollywood Reporter. "We applaud Disney's board for the courage to make this change."

He added, "We have not recommended the shares since May 2020 for multiple reasons, including concern that the former CEO Bob Chapek had become wedded to a streaming strategy that did not make sense given today's reality."

VALERIE MACON/AFP via Getty Images Bob Iger makes stunning return to Disney as interim CEO.

As of now, Iger will serve as Disney's CEO for two years, while working with the board to pick a successor to lead the company after that time.

Chapek hasn't had a smooth ride as CEO since he stepped in during 2020, and though Iger hasn't been too critical of his successor in public, Puck reports that Iger has often expressed concern about Chapek's leadership in private.

Chapek's first challenge was navigating Disney through the coronavirus pandemic, which shut down virtually every live-action Hollywood production across film and television for a beat. Then came some very public fumbles.

Scarlett Johansson, a major Marvel movie star, sued Disney in July 2021 over the day-and-date streaming release of Black Widow, the first Marvel Studios film to feature Johansson as the main lead. Black Widow was simultaneously released in theaters and on Disney+ paid premiere access (for an additional $30) on July 9, 2021.

Johansson's lawyers argued that Disney breached her contract by using Black Widow as a way to grow its Disney+ subscriber numbers at the expense of Johansson's earnings. The suit claimed the actress and executive producer was given a contractual promise to release Black Widow theatrically and that her salary would be "based largely on 'box office' receipts." It was announced later that year in September that both sides resolved the legal dispute and agreed to continue their working relationship on multiple projects.

Chapek's response to Florida's "Don't Say Gay" bill, a title bestowed by LGBTQ activists, didn't work in his favor either. In the state, House Bill 1557, a.k.a. the Parental Rights in Education bill, makes it illegal for conversations about sexual orientation and gender identity to occur in kindergarten through grade 3 "or in a manner that is not age-appropriate or developmentally appropriate for students in accordance with state standards." When it comes to higher grades, only "age-appropriate" instruction is permitted, and parents have the right to sue schools or teachers that engage in these topics.

Disney, which makes a significant profit from Disney World in Florida, quickly came under fire after the Orlando Sentinel reported that the company donated to every politician who sponsored or co-sponsored the bill. Chapek and Disney leadership did not immediately denounce HB1557. In fact, Chapek made it known that they were to actively keep quiet. According to an internal memo to staff, Chapek said, "The best way for our company to bring about lasting change is through the inspiring content we produce, the welcoming culture we create, and the diverse community organizations we support."

It backfired. Various creators working on Disney projects came out to say that Disney has a history of censoring LGBTQ content. "We at Pixar have personally witnessed beautiful stories, full of diverse characters, come back from Disney corporate reviews shaved down to crumbs of what they once were," read an open letter from Pixar staff. "Nearly every moment of overtly gay affection is cut at Disney's behest, regardless of when there is protest from both the creative teams and executive leadership at Pixar."

As a direct result, Chapek changed course, vowing to cease all political donations in Florida for the time being. The company eventually made a public denouncement of HB1557. Chapek said Disney was "opposed to the bill from the outset," but did "not to take a public position on it because we felt we could be more effective working behind the scenes."

This month, in the wake of disappointing profit performance during its fiscal fourth quarter, reports emerged that Disney had implemented a hiring freeze with layoffs planned for the future. This had followed statements from Chief Financial Officer Christine McCarthy on an earnings call in which she said Disney was looking for ways to cut costs. Streaming continues to not be the cash cow many Hollywood studios thought it would be, leading to increased losses in that division for Disney.

Iger's main goals, per internal emails reported on by multiple trade publications, is to "set the strategic direction for renewed growth" and determine a new CEO successor. Iger, in his own note to workers, mentioned "a clear mission focused on creative excellence to inspire generations through unrivaled, bold storytelling."

Josh Gad, an actor involved in multiple Disney projects, from Beauty and the Beast to Frozen, expressed his excitement on social media. "The King has returned!!" he wrote in an Instagram post. "Welcome back to @disney to the greatest man in the biz."

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Related content:

• Disney reverses course by speaking out against Florida's 'Don't Say Gay' bill, pledges $5 million to LGBTQ organizations

• Scarlett Johansson and Disney resolve their Black Widow legal spat

• Pixar employees say Disney has censored LGBTQ stories 'down to crumbs of what they once were'