The following is the unofficial transcript of a FIRST ON CNBC interview with Walt Disney Co (NYSE:DIS) Executive Chairman Bob Iger and Incoming CEO Bob Chapek, and CNBC’s Julia Boorstin, on CNBC’s “Fast Money” (M-F 5PM – 6PM) today, Tuesday, February 25.
Bob Chapek Disney CEO
BRIAN SULLIVAN: Welcome back. If you’re just joining us, a big bombshell from Disney tonight. Longtime CEO Bob Iger stepping down effective immediately. He will be replaced by Bob Chapek. Both men are sitting down right now with Julia Boorstin in Los Angeles in a first on CNBC interview. Julia, take it away.
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JULIA BOORSTIN: Thanks so much. I am joined now by Bob Iger, as of today Executive Chairman of Disney, overseeing all creative endeavors at the company. And also, Bob Chapek, as of just now the new CEO of the Walt Disney company. Thank you both so much for joining us today.
BOB IGER: Pleasure.
JULIA BOORSTIN: So, first, to Bob Iger, you back in 2017 when you announced the Fox acquisition extended your contract as CEO through the end of 2021. Why make this change now, more than a year and a half before your contract is up?
BOB IGER: Well, the company has a great collection of assets, businesses, brands, franchises, particularly with the acquisition of 21st Century Fox and the purchase of the larger share of Hulu. And we also have recently deployed a very new and extremely important strategy, the direct-to-consumer strategy that led to the ESPN Plus product being launched, and then, of course, Disney Plus which launched in November. As we looked at the businesses, we have a great set of assets, we have a great strategy, what’s next? And what was next, in terms of my own priorities, is making sure that the creative pipeline in the company was really rich, that all of our creative engines were working extremely well. I wanted to spend more and more of my time on that.
But the only way that I was able to do that was to pass the torch on to Bob so that my direct reports and the authority over our businesses will shift to him, freeing me up to do what I think is our next big priority.
JULIA BOORSTIN: Now, for investors, this seems abrupt. The stock is trading down in after hours. I interviewed you just a couple weeks ago after your quarterly earnings report. How long has this been in the works and for how long have you identified Bob Chapek as your successor?
BOB IGER: Well, we’ve had a succession process that’s been ongoing with the board for, actually a few years. It’s something that we talk about virtually at every meeting. And we identified Bob a while ago as a likely candidate to succeed me, but they went through a thorough process and discussed other possibilities. So, it’s again something that the board has been engaged in for quite a while. They got to know Bob very well during that period of time. He ran one of our most complex, one of our most important businesses, Global Parks and Resorts, for instance, during a time of great capital investment, at a time of great change.
And did so very well, after working for the company for 30 years. In terms of the market today, you know, what’s going on obviously today is something that is very serious and certainly a concern to us. But the timing is, you know, unfortunate, but not anything that we can control. And it certainly didn’t play into the timing of this decision.
JULIA BOORSTIN: And you are signed on to continue through the end of 2021, overseeing all the creative elements of the company. But at the same time Bob Chapek is going to be running the day-to-day business. For you as Executive Chairman and you as CEO, will that create confusion about who’s in charge if you’re going to be reporting to Bob Iger? How do you address those concerns and potential conflict while you’re still Executive Chairman?
BOB IGER: Well, we’ve worked together extremely well. Actually, our senior management team has worked together quite well. We know each other well. And we get together often. We share a number of the issues of our days in terms of running the businesses. So, there’s a lot of familiarity, a lot of collegiality. In terms of confusion, we’re not really concerned about that. Bob is going to be running the company and running the day-to-day businesses. As I said earlier, all of my direct reports shift to him. I have one direct report, and that’s Bob. We’ll be focusing on the creative. But any of the big creative decisions that have to be made, I fully intend for Bob to be at my side.
It’s important for him to learn as much as possible. And what this is about really is, we believe, a really good success process and a really smart transition process. The goal here during the period of time that I will be Executive Chairman is to create a transition process that is smooth and functioning and effective, and we’re not concerned at all about creating any confusion.
JULIA BOORSTIN: For you, Bob Chapek, congratulations on this new role. Your predecessor, Bob Iger, made a number of massive changes that really transformed the Disney Company: the acquisition of Marvel, Pixar, Lucasfilm, the launch of the direct-to-consumer business. What do you see as your mission going forward? Do you imagine transforming the company as much as he has?
BOB CHAPEK: Well, I obviously have huge shoes to fill. Bob’s legacy in the company is just profound. I think my role is now to take the strategic pillars that he’s so well established over the last 15 years and continue to work on those and implement those in the marketplace, most importantly, our direct-to-consumer initiatives. But at the same time look around the corner for what disruption might be going on in the marketplace that would necessitate a fresh look at those things. But right now, the course that Bob has laid is one that we fully intend to follow and I think will pay dividends for our shareholders for years to come.
JULIA BOORSTIN: What does it mean for you as the new CEO to have Iger as the Executive Chairman for more than a year and a half?
BOB CHAPEK: Well, it’s certainly a privilege to have Bob, you know, still available and there for guidance. I’ve had a front row seat to Bob Iger’s magic at Disney now for 15 years and to be able to extend that for the next year and a half or so while I make the transition into this new role is just a luxury that frankly I couldn’t ask for more.
JULIA BOORSTIN: Do you feel like your mission and your purpose as CEO is to continue on the path that Iger has started? Or do you envision more need for change or potential acquisitions or sort of shifts down the line?
BOB CHAPEK: I suspect in the beginning it will be more of the same because essentially the strategies that Bob’s put in place are really, you know, long lasting in terms of where the company is going to go in the short-term. Over time though, as we both recognize, disruption and transformation are just inevitable in this business. And it hits each of our businesses a little differently. It’s inevitable those businesses will be disrupted and it’s recognizing at that time when we’ll need to shift. And that’s I think the art of the job.
JULIA BOORSTIN: You are taking on this job at a moment of incredible change, not just in the Streaming business, we’re about to see the launch of several new streaming services, but also in the Parks division. You until today ran the Parks and Consumer Products division. Two of Disney’s parks are closed right now, Hong Kong and Shanghai. I know you oversaw the launch of the Shanghai Park. There is no sign when the Parks will open. Are you concerned about the long-term impacts of Coronavirus not just on those Parks but potentially also on the cruise business which you’ve run?
BOB CHAPEK: The long-term health of our business is a function of our consumer demand for unbelievable storytelling and our product. And while this is certainly a bump in the road in terms of the Coronavirus, we’ll come through this like we’ve come through every other challenge that we’ve had, and that affinity for the brand and our storytelling will way outlast any short-term blip that we have from Corona.
JULIA BOORSTIN: Bob mentioned the stock market’s decline over the past couple days. It’s been a very volatile time in the markets. And there’s always a question sort of how the consumer will react. Will there be an economic downturn or a correction that could impact consumer spending or it could impact advertising? What’s your outlook as you take the helm of this, you know, international major multiplatform media industry about the potential risks to all of those different factors?
BOB CHAPEK: We’re always very conscious of those disruptive elements, socioeconomic elements, social elements that could come in at any time and disrupt our business. But, I think when you have the core assets that we’ve got, those franchises, the Disney brand, once again we’ll sort of see our way through all those disruptive elements. It doesn’t mean we won’t get surprised tomorrow. But we’ve got the strength to get through them all.
JULIA BOORSTIN: Now you’ve worked in many different parts of the Disney business, most recently Parks and Consumer Products, also the Studio, Distribution of Home Entertainment. But you’ve not worked in the TV bundle part of the business, the part of the business that is suffering from the cord cutting trends which I’ve talked to Bob Iger about many times over the last several years. As someone who has not worked in that business, what’s your outlook to the threat of cord cutting and how to handle it?
BOB CHAPEK: Well, to me the commonality between our businesses arc is our consumer. And I’ve worked in consumer businesses my entire career, and it’s not ironic that our strategy for the media business now is a direct-to-consumer business, where we have the one-on-one relationship with the customer without having a lot of middlemen in between.
That’s my sweet spot and I think that’s something I can leverage now throughout all my experiences, not even Disney but even before Disney, in terms of figuring out how we take the data, the information, the technology and, once again, our storytelling right direct to the consumer so that we can take the great equities that we have and continue to build those for our shareholders.
JULIA BOORSTIN: Now, Bob, as you focus on the storytelling and less on the day to day, do you imagine potentially extending your time at the Walt Disney company beyond December 2021?
BOB IGER: No, I don’t. No. I’ve been with the company 45 years, and I was in the CEO job for 15 of those years, and I was President and COO for five. It’s been a fun run and I’m looking forward to the run ending. But I still have a job to do.
JULIA BOORSTIN: What will you do after 2021?
BOB IGER: I’m going to use my imagination.
JULIA BOORSTIN: You’re going to use your imagination.
BOB IGER: I’m going to go to Disneyland.
JULIA BOORSTIN: And you’re going to go to Disneyland, and I’m sure you’ll probably make your way there many times before then. Well, I want to thank you both so much for coming to us after this historic announcement. Bob Iger, Bob Chapek, thank you both so much for talking to us today. Guys, back over to you in the studio.