Ousted Disney CEO Bob Chapek tapped consulting firm McKinsey in recent months to centralize control of major spending decisions, angering creative execs, a new report said.

Chapek hired the firm in September, just two months before the beleaguered CEO’s shocking dismissal last month.

Discussions to implement McKinsey’s plans were underway in the weeks leading up to the board of director’s decision to fire Chapek on Nov. 20 and replace him with his predecessor, Bob Iger, according to The Wall Street Journal.

The decision was spearheaded by Disney Chief Financial Officer Christine McCarthy, who told the board that she had “lost confidence” in Chapek’s leadership shortly after the company posted a disappointing earnings report.

During Chapek’s two-year tenure as CEO, he not only racked up a host of PR gaffes, but he also shifted much of the decision-making related to content to his lieutenant, Kareem Daniel, upsetting creative execs at the Mouse House.

General views of Sleeping Beauty Castle at Disneyland
Disney reportedly hired consulting firm McKinsey to reorganize the company, rankling creative execs at the media giant.
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As part of its review, McKinsey suggested further centralization to eliminate redundancies at the media giant. One potential change was to take decisions about spending on marketing and publicity for films and TV shows out of the hands of studio execs and centralizing them in another part of the company, The Journal reported. McKinsey also suggested consolidating certain tasks related to hiring, communications and legal services.

McKinsey’s plans sparked outrage among some of Disney’s top content chiefs, who were still reeling from losing power over spending decisions on content under Chapek, according to the Journal. Sources told the publication that some execs told colleagues they felt that the changes would “strip them of nearly all of their power.”

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Disney’s board brought back longtime CEO Bob Iger, after the firm’s CFO said she lost confidence in Chapek.
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Iger quickly took steps to reverse Chapek’s moves. His first points of business was to fire Daniel and unwind Chapek’s structure, empowering Disney’s creators with decision-making over content.

“It is my intention to restructure things in a way that honors and respects creativity as the heart and soul of who we are,” said Iger, who gave up the reins to Chapek in 2020, in a memo to employees last week.

At a town hall meeting on Monday, Iger said building a new corporate structure would take time and will be done in conjunction with other executives including chairman of general entertainment content Dana Walden, Disney Studios head Alan Bergman, ESPN president Jimmy Pitaro and McCarthy.

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During his short time as CEO, Bob Chapek centralized decision-making for content marking and distribution under Kareem Daniel, taking away power from the company’s longtime creative chiefs.
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The CEO said Disney’s hiring freeze will remain in place as he examines the company’s cost structure. It is unclear if Iger will use any suggestions from McKinsey. Disney did not return requests for comment.

Iger also said he would focus more on building the profitability of its streaming division, which includes Disney+, Hulu and ESPN+.

Disney recently reported that the streaming unit lost $1.5 billion in the fourth quarter. Iger said the company must focus on boosting profitability and concentrate less on simply adding new subscribers, which was Disney’s priority when he relinquished the CEO reins two years ago.



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Tyler Cowan