Disney COO TOM STAGGS has "made the decision" to step down after learning Chair & CEO BOB IGER and the Disney BOD had "decided to broaden the search" for Iger's successor to include more candidates, according to a source cited in a front-page piece by Fritz, Flint & Lublin of the WALL STREET JOURNAL. The source added that the implication was that Staggs' "odds of rising to the CEO role had declined precipitously." Another source said that the Disney BOD "decided 'in the past few weeks'" that Staggs was "unlikely to get the CEO job." Fritz, Flint & Lublin note Staggs' decision was "based on a review" of his performance after one year as COO. The BOD is "likely to focus in large part on outside CEO candidates." Sources said that Staggs' departure means Iger, who has said that he "plans to retire" in June '18, could "stay on past his announced retirement date" (WALL STREET JOURNAL, 4/5). In N.Y., Brooks Barnes notes Disney has a "history of bumpy transitions of power." As Staggs "came under intense scrutiny" from the BOD, it "became clear that at least some board members were not convinced he had the skills required to maintain Disney's creative momentum." Facebook COO SHERYL SANDBERG, a Disney BOD member, has been "frequently mentioned" as a candidate to succeed Iger. Over the last year, Staggs "devoted a substantial amount of his time to Disney Media Networks, a division that includes ESPN" (N.Y. TIMES, 4/5).
IMPORT/EXPORT: The AP's Ryan Nakashima noted Staggs "lacked experience in the TV and film businesses." Top execs will now "go back to reporting to Iger." Staggs' announcement "may draw out external candidates," but it also "raises the profile of other top internal contenders," including Disney Senior Exec VP & Chief Strategy Officer KEVIN MAYER and ESPN President JOHN SKIPPER (AP, 4/4). Sources said that one issue for Disney's BOD with Staggs may have been his "lack of a serious creative pedigree." In L.A., Daniel Miller in a front-page piece notes the move "stunned investors as well as executives inside and outside" of Disney (L.A. TIMES, 4/5). VARIETY's Cynthia Littleton reported there was "speculation that delays and cost overruns with the long-awaited Shanghai Disneyland" played a part in Staggs' decision. Sources added that Staggs "had a tough assignment working in Iger's shadow in the apprentice role and some questioned how much authority Iger was willing to cede" (VARIETY.com, 4/4).
TECH TACKLE: DEADLINE's David Lieberman noted there was "no outward sign that the company had a problem with Staggs' performance" (DEADLINE.com, 4/4). USA TODAY's Roger Yu writes Staggs is "well-regarded as an operator and a financially astute executive." But Edward Jones analyst ROBIN DIEDRICH said that given the company's shifting priorities, Disney's BOD may "be looking for a CEO candidate who has a different set of skills." Diedrich: "Competitive forces are tackling media on the tech side. My thought would be (that Disney's BOD is looking for) someone who has more skills and experience in the creative-slash-technology end of the spectrum" (USA TODAY, 4/5).
WHAT THEY'RE SAYING: BTIG media analyst RICH GREENFIELD said, "Wall Street loves Staggs. He led the turnaround, a big change at the parks. He knew the company better than anyone. ... The company is really hitting a wall. ESPN business has real issues. Yes, the content is doing amazing, but they've got real issues on 50 percent of [the] company, which is cable networks" (THEWRAP.com, 4/4). Needham & Co. analyst LAURA MARTIN added, "Wall Street doesn't like uncertainty and hiring someone from outside after they've jettisoned the heir apparent adds uncertainty" (VARIETY.com, 4/4).
