He was favored to replace current Disney CEO Robert Iger, but Disney COO Tom Staggs announced Monday he was leaving the company.
Brooks Barnes of The New York Times had the day’s unexpected news:
Thomas O. Staggs, the favored contender to lead Disney after Robert A. Iger’s retirement, unexpectedly announced his departure on Monday, throwing succession at the world’s largest entertainment company into disarray.
Mr. Staggs, who became the Walt Disney Company’s No. 2 executive last year, beating out another candidate, will step down as chief operating officer on May 6. Disney said that Mr. Staggs, 55, would remain an employee until the fall, serving as “special adviser” to Mr. Iger, who is the company’s chief executive and chairman. In a statement, Mr. Iger called Mr. Staggs “a great friend and trusted colleague.”
Disney has a history of bumpy transitions of power. And last year, when Mr. Staggs was elevated to chief operating officer from theme park chairman, Disney insisted that it was not a coronation. Disney acknowledged, however, that the promotion made him Mr. Iger’s handpicked heir, pending the board’s approval. Mr. Iger, 65, said in 2014 that he would step down in June 2018, a two-year extension from a previously announced retirement.
After the promotion, as Mr. Staggs came under intense scrutiny by Disney’s board, it became clear that at least some board members were not convinced he had the skills required to maintain Disney’s creative momentum. While Mr. Staggs has extensive financial experience, his résumé is light when it comes to the successful creation of movies and television shows. (For his part, Mr. Iger ran ABC early in his career.)
An early personnel misstep did not help Mr. Staggs. He pushed for a theme park marketing executive, Leslie Ferraro, to become Disney’s merchandising chairwoman. Ms. Ferraro proved a poor fit and left Disney in February. Mr. Staggs also lacked the support of some Disney shareholders, including Isaac Perlmutter, the strong-willed chief executive of Marvel Entertainment. Mr. Staggs’s exit was first reported by The New York Times.
Disney prefers to promote from within, but Mr. Staggs was the only obvious candidate — the man he beat out for the No. 2 job, James A. Rasulo, has since left the company. The board may now look outside for a successor to Mr. Iger, who has led Disney to record-breaking results.
Daniel Miller of the Los Angeles Times explained how Disney is now scrambling for a new heir apparent with many notable names on the list, including Facebook CFO Sheryl Sandberg:
Now Disney will search for new candidates to succeed Iger. With the notable exception of former Chairman and Chief Executive Michael Eisner, Disney usually selects its chief executive from within. But the departures of Staggs and Rasulo make it more likely that Disney would have to turn to an outside executive to find a person capable of handling such a complicated job, analysts said.
“These are high-level skills, dealing with complex issues in a $160-billion market cap company,” said Laura Martin, an analyst at Needham & Co. “It is a short list of people who can do that job.”
Among the executives who’ve already been mentioned as possible candidates is Sheryl Sandberg, the powerhouse Facebook chief operating officer and a Disney board member.
Sandberg, 46, has the kind of resume that might be useful at Disney, especially as the Internet becomes an increasingly important entertainment portal. Before joining Facebook as chief operating officer, the Harvard graduate was a top executive at Google. She also has Washington experience — serving as chief of staff to former Treasury Secretary Lawrence H. Summers — a valuable asset for a company with a big media portfolio.
Sandberg helped shepherd Facebook through its 2012 initial public offering of stock, one of the biggest IPOs of all time. She also is known for her 2013 bestseller, “Lean In: Women, Work, and the Will to Lead.”
A Facebook representative said Sandberg was unavailable to comment.
Running Disney is considered one of the plum jobs in corporate America and could attract any number of high-profile executives such as Steve Burke — the chief executive of NBCUniversal and a former Disney executive — and former top Fox executive Peter Chernin.
Cynthia Littleton of Variety explained how the announcement comes at an uncertain time for the company:
The renewed uncertainty about succession comes at a time of some turmoil for Disney. The company’s shares have been on a roller coaster ride of late as “Star Wars: The Force Awakens” has been busting global box office records but investors are increasingly focused on the company’s vulnerabilities on the TV side as growth prospects slow for its powerhouse ESPN cable franchise. Staggs by many accounts spent a good deal of time after his promotion to COO learning the ins and outs of the TV business, which is the primary driver of Disney earnings.
At the premiere of “The Jungle Book” later on Monday, Iger declined to comment on the news. At the end of the red carpet, other executives were also reluctant to comment, including Ben Sherwood, co-chair of Disney Media Networks and Disney ABC Television. Staggs was not sighted.
Iger said he “debated not coming, but I am such a fan of the movie I thought I would be doing it a disservice if I were not here.”
Walt Disney Studios chairman Alan Horn also declined comment. He said he found out around 12:30 pm on Monday. “I’m still processing it,” he said.
