Published - November 21, 2022 @ 11:56 AM (EET)

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In a surprising turn of events, Walt Disney Co.'s (NYSE:DIS) board of directors on Sunday night brought back former leader Bob Iger who left the company at the end of last year, to replace his successor Bob Chapek Chief executive officer.

Following a string of disappointing results, Iger agreed to serve for two years and will help find a permanent replacement, according to a company statement by chairman Susan Arnold.

"We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic," Arnold said.

Chapek will leave with immediate effect.

WHY IT MATTERS

Killing the momentum built up over a strong year that saw record revenue and profits in multiple divisions, Disney's shares hit a 20-year low earlier this month after its fourth-quarter earnings showed mounting losses at its streaming media unit that includes Disney+.

While Chapek repeatedly said he expects the streaming business to be profitable by September 2024, the company lost $1.47 billion in the most recent quarter, more than twice the year-earlier loss.

Becoming CEO in February 2020 and succeeding Iger, outgoing Chapek had to navigate theme park closures and production shutdowns during the pandemic.

Chapek also became entangled in an internal dispute with staff, who blasted him for remaining silent on Florida legislation that would limit classroom discussion of sexual orientation and gender identity.

NOW WHAT

Before stepping back to take on the role of executive chairman and help manage the company's creative pipeline, Iger served as Disney's chief executive between 2005 and 2020.

During that time, the company acquired Pixar, Marvel, and Lucasfilm and launched the streaming service Disney+.

In an email to employees, Iger wrote,

"It is with an incredible sense of gratitude and humility - and, I must admit, a bit of amazement - that I write to you this evening with the news that I am returning to The Walt Disney Company."

Iger will have to deal with reversing the steep decline in Disney's share and will need to rein in Disney's spending on programming for streaming video while reigniting growth for the Disney+ service, all while managing a declining cable-TV business.

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