The Ride of a Lifetime

by Robert Iger;

  It was an easy decision, really. I never asked what the financial repercussions would be, and didn’t care. In moments like that, you have to look past whatever the commercial losses are and be guided, again, by the simple rule that there’s nothing more important than the quality and integrity of your people and your product. Everything depends on upholding that principle.

  I received a fair amount of praise and some damnation throughout that day and the rest of the week. I took heart that the praise came from many quarters: heads of studios; politicians; some people in the sports world, including Robert Kraft, the owner of the New England Patriots. Valerie Jarrett wrote me immediately to say how much she appreciated our response. President Obama sent his appreciation, too. I was attacked on Twitter by President Trump, who asked where my apology was for him and said something about the “horrible” statements we’d made about him while reporting the news on ABC. Kellyanne Conway contacted the head of ABC News, James Goldston, and asked if I’d seen Trump’s tweets and did I have a response. My answer was: “Yes. And no.”

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  RIGHT AROUND the same time as the Roseanne debacle, and as our pursuit of 21st Century Fox wore on, John Lasseter’s six-month sabbatical came to an end. After several conversations, he and I reached the conclusion that a complete exit from Disney was wise, and we agreed to a high level of confidentiality regarding this decision.

  This was the most difficult and complex personnel decision I have managed. After John left, we made Pete Docter the chief creative officer at Pixar, and Jennifer Lee, who wrote and directed Frozen, the chief creative officer of Walt Disney Animation. Both are brilliant, beloved, inspiring people, and their leadership has been a silver lining to what was otherwise a painful time for the company.

  CHAPTER 14

  CORE VALUES

  ON JUNE 12, 2018, a district court judge in lower Manhattan ruled in favor of AT&T buying Time Warner. The next day, Brian Roberts announced Comcast’s new offer: an all-cash bid of $35 per share ($64 billion) to our $28 per share. Not only was the number significantly higher, but the all-cash offer would be attractive to many shareholders who would rather have cash than stock. Suddenly we were in danger of losing the deal that we’d been dreaming about and working so hard on for the past six months.

  The Fox board had scheduled a meeting, to take place a week later in London, during which they would vote on the Comcast offer. We could bid again, and we needed to decide quickly what our number would be. We could raise our bid but still come in slightly under theirs, and hope that their board would continue to believe that the path to regulatory approval, despite the AT&T decision, was still easier with us. We could match Comcast’s offer and hope that they wouldn’t scuttle our deal for an equivalent offer, even if many investors would prefer cash over stock. Or we could go higher and hope that Comcast didn’t have much room left to go up.

  Various executives and bankers were involved in the discussion. All of them were advising me to go in low, or at the most match Comcast’s offer, and bet on the regulatory issues still weighing in our favor. I decided I wanted a knockout bid, and the board gave me approval to raise our number and do just that. Meanwhile, Alan Braverman had been in ongoing discussions with the Justice Department, trying to clear a way to regulatory approval, should we prevail in the bidding war for Fox.

  Two days before the Fox board was set to vote on the Comcast offer, I flew to London with Alan, Kevin, Christine, and Nancy Lee. I made sure that only a few people on our team knew what our bid would be, and cautioned everyone that confidentiality was critical. We did not want Comcast to have any inkling of our plan to bid higher. We reserved a room in a hotel in London that we never stay in, under different names. I don’t know if it’s true, but some people told us that Comcast sometimes tracks the movements of competitors’ private jets, so rather than flying into London, we flew first to Belfast, where we then chartered a different plane for the short jump to London.

  Right before we boarded the plane to London, I called Rupert and said, “I want to have a meeting with you tomorrow.” Late the next afternoon, Kevin and I went to meet with Rupert and John Nallen at Rupert’s office. The four of us sat around his sleek marble table, looking out on the balcony where he and I had posed for a picture back in December. I got right to the matter. “We’d like to make a $38 offer,” I said. “Half cash, half stock.” I told him that this was as far as we could go.

  As for the $38 price, I suspected that Comcast could possibly go higher than what they’d already bid, and that if we went to $35, they’d go to $36. If we went to $36, they’d go to $37, at each stage convincing themselves that it’s only a little more, until eventually we’d go up to $40 per share. Whereas if we started at $38, they’d have to think hard about going up at least $3 per share. (Since they were offering all cash, it would mean borrowing even more money and significantly raising their debt.)

  Comcast assumed the Fox board was voting on their offer the next morning. Instead, Rupert brought our new offer to his board, and they approved it. When their meeting ended, they informed Comcast they were accepting our new bid, which we announced jointly and immediately. We needed to explain this new move to investors, but we didn’t have a conference room set up in London, because we didn’t want anyone to know we were there. So we brought a speakerphone into my hotel room and held the investor conference call from there. It was a surreal scene, the small group of us gathered in a hotel room as Christine and I spoke with investors, while on the television set in the background CNBC was covering the news we had just made.

  Shortly after we made our final bid, I exhorted Alan Braverman to see if he could reach an agreement with the Department of Justice regarding our acquisition. He knew our concentration in television sports and owning the Fox regional sports networks would be a big problem. We decided we would be better off agreeing to divest them in order to do a fast deal with Justice, which is what happened. This would give us a huge advantage over Comcast, who could still have a complicated and lengthy U.S. regulatory process, on top of their need to beat our $38 offer. In a matter of two weeks, we got a guarantee from the DoJ that, if we agreed to sell off the sports networks, they would not sue to block our deal. That guarantee proved to be crucial.

  After the Fox board’s vote, a new proxy, along with the board’s unanimous recommendation to vote for the deal, was sent to their shareholders. The vote would take place in late July, which still gave Comcast plenty of time to come back with a higher bid. It was a nerve-racking several weeks. Every time I opened my computer or looked at email or turned on CNBC, I expected to see that Comcast had outbid us. In late July, I went to Italy with Kevin for three days of meetings, and from there back to London.

  We were in a car in London when I received a call from David Faber, the host of CNBC’s Squawk on the Street. I answered the phone, and David said, “Do you have a comment on this statement?”

  “What statement?”

  “Comcast’s statement.”

  My anxiety immediately spiked. “I don’t know what it is,” I said.

  David told me that the news had just broken: “Brian Roberts announced that they’re out.”

  I was so expecting him to say that they’d topped our offer that my instantaneous reaction was “Holy crap!” I paused for a moment, then dictated a more formal statement to him. “You can tell your audience you told me,” I said. Which he did—and he also told them I’d said, “Holy crap.”

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  BEFORE WE COULD actually close the deal, we still needed to contend with the global regulatory process, outside of the United States securing approval in most of the places we’d now be doing business—Russia and China and Ukraine and the EU, India and South Korea and Brazil and Mexico among them. We got approval one region at a time, over the course of months, until finally, in March 2019, nineteen months after my first
conversations with Rupert, we officially closed the deal and began to move forward as one company.

  It all happened just in time. The next month, on April 11, we hosted an elaborate, highly produced, painstakingly rehearsed event on the Disney lot, to present the details of our new direct-to-consumer businesses to investors. It would have been a very different meeting if we hadn’t closed the Fox deal in time. As it was, though, hundreds of investors and members of the media filled rows of bleachers in one of our soundstages, facing a giant stage and backdrop.

  We’d promised Wall Street that when we were ready, we would share some information on our new streaming services. That led to an internal debate over just how detailed that information should be. I wanted to show them everything. We’d been candid about the challenges facing us in the past—in that fateful earnings call in 2015, when I spoke about the disruption we were all seeing—and I wanted to be just as candid now about what we’d done to face that disruption, to embrace it and become disrupters ourselves. I wanted to show them the content we’d created and the technology we’d developed to deliver it. It was also crucial to demonstrate how Fox fit perfectly into this new strategy and dramatically fueled it. Transparency about how much this would cost, the short-term damage it would do to our bottom line, and what we projected the long-term gains would be was also critical.

  I took the stage and talked only for about a minute and a half, following a beautifully produced film we’d made to showcase the history of these two newly merged companies, Disney and 21st Century Fox. It was our way of saying, We’re moving in a new direction, but creativity is at the heart of what we do. For years and years, these two companies have made extraordinary, indelible entertainment, and now, combined, we would do that more emphatically than ever.

  This gathering was a bookend to my first interview with the Disney board back in 2004. It was all about the future, and our future depended on three things: making high-quality branded content, investing in technology, and growing globally. I couldn’t have anticipated back then how everything we would do would emerge from that template, and I could have never predicted a day like this one, in which those three pillars would be so overtly on display as we demonstrated the company’s plans for the future.

  One after another, the heads of many of our businesses came onstage and introduced the original and curated content that would be available on our new streaming service. Disney. Pixar. Marvel. Star Wars. National Geographic. We would be releasing three new, original Marvel shows and two new series from Lucasfilm, including the first ever Star Wars live-action series, The Mandalorian. There would be a Pixar series, new Disney television shows, and original, live-action films, including Lady and the Tramp. All in all, more than twenty-five new series and ten original films or specials were slated to come out in the first year of the service alone, and all of them had been made with the same level of ambition and attention to quality as any films or television shows our studios produced. Virtually the entire Disney library, every animated film ever made since Snow White and the Seven Dwarfs in 1937, would also be available, including several Marvel titles, among them Captain Marvel and Avengers: Endgame. The addition of Fox meant that we would also be offering all six hundred or so episodes of The Simpsons.

  Later in the presentation, Uday Shankar, the new president of our operations in Asia, took the stage to talk about Hotstar, India’s largest streaming service. We’d made the decision to pivot toward a direct-to-consumer strategy, and now, as a result of the Fox acquisition, we owned the largest direct-to-consumer businesses in one of the most vital and thriving markets in the world. There was global growth.

  When Kevin Mayer came onstage to demonstrate how the app would work—on a smart TV, on a tablet, on a phone—it was impossible not to recall Steve standing in my office in 2005, holding out the prototype of the new video iPod. We’d embraced change then, much to the chagrin of the rest of our industry, and now we were doing it again. We were addressing some of the same questions we asked ourselves almost fifteen years earlier: Are high-quality branded products likely to become even more valuable in a changed marketplace? How do we deliver our products to consumers in more relevant, more inventive ways? What new habits of consumption are being formed, and how do we adapt to them? How do we deploy technology as a powerful new tool for growth instead of falling victim to its disruption and destruction?

  The cost of building the app and creating the content, combined with the losses incurred by undercutting our own traditional businesses, meant we’d reduce our profits by a few billion dollars a year over the first few years. It would take some time before success would be measured in profits. First, it would be measured in subscribers. We wanted the service to be accessible to as many people as possible around the world, and we had settled on a price that we estimated would bring in somewhere between sixty and ninety million subscribers in the first five years. When Kevin announced we would be selling it for $6.99 a month, there was an audible gasp in the room.

  The response from Wall Street went far beyond anything we anticipated. In 2015, our stock dropped like a stone when I talked about disruption. Now it was soaring. The day after our investors conference it jumped 11 percent, to a record high. By the end of the month, it was up nearly 30 percent. That stretch, through the spring of 2019, was as good as any in my tenure as CEO. We released Avengers: Endgame, which would eventually go on to become the highest-grossing movie of all time. That was followed by the opening of our new Star Wars land, Galaxy’s Edge, at Disneyland; and that was followed by an agreement to purchase Comcast’s remaining stake in Hulu, which will serve as our subscription streaming service for the content that will not be on Disney+, a move that investors again rewarded. If the past had taught me anything, it was that with a company this size, with such a big footprint in the world and so many employees, something unpredictable will always happen; bad news becomes an inevitability. But for now it felt good, really good, like the fifteen years of hard work had paid off.

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  BEFORE WE ENTERED into the Fox negotiations, June 2019 was supposed to have been my retirement date from the Walt Disney Company. (I’d had some previous plans to retire that didn’t quite happen as expected, but now I was determined to walk away, forty-five years after I started at ABC.) Not only was I not retiring, however, I was working harder and felt more responsibility than I ever had in my fourteen years in the job. That’s not to say I wasn’t fully engaged with or fulfilled by the work, just that it wasn’t what I imagined my life would look like at age sixty-eight. The intensity of the work didn’t fully inoculate me against a kind of wistfulness creeping in, though. The future that we were planning and working so feverishly on would happen without me. My new retirement date is December 2021, but I can see it out of the corner of my eye. It surfaces at unexpected times. It’s not enough to distract me, but it is enough to remind me that this ride is coming to an end. As a joke a few years back, dear friends of mine gave me a license plate holder, which I immediately attached to my car, that says, “Is there life after Disney?” The answer is yes, of course, but that question feels more existential than it used to.

  I’m comforted by something I’ve come to believe more and more in recent years—that it’s not always good for one person to have too much power for too long. Even when a CEO is working productively and effectively, it’s important for a company to have change at the top. I don’t know if other CEOs agree with this, but I’ve noticed that you can accumulate so much power in a job that it becomes harder to keep a check on how you wield it. Little things can start to shift. Your confidence can easily tip over into overconfidence and become a liability. You can start to feel that you’ve heard every idea, and so you become impatient and dismissive of others’ opinions. It’s not intentional, it just comes with the territory. You have to make a conscious effort to listen, to pay attention to the multitude of opinions. I’ve raised the issue
with the executives I work most closely with as a kind of safeguard. “If you notice me being too dismissive or impatient, you need to tell me.” They’ve had to on occasion, but I hope not too often.

  It would be easy in a book like this to act as if all the success Disney experienced during my tenure is the result of the perfectly executed vision that I had from the beginning, that I knew, for instance, that focusing on three specific core strategies rather than others would lead us to where we are now. But you can only put that story together in retrospect. In truth, I needed to come up with a plan for the future in order to lead the company. I believed that quality would matter most. I believed we needed to embrace technology and disruption rather than fear it. I believed that expanding into new markets would be vital. I had no real idea, though, especially then, where this journey would take me.

  Determining principles of leadership is impossible to do without experience, but I had great mentors. Michael, for sure, and Tom and Dan before him, and Roone before them. Each was a master in his own way, and I’d absorbed everything I could from them. Beyond that, I trusted my instincts, and I encouraged the people around me to trust theirs. Only much later did those instincts start to shape themselves into particular qualities of leadership that I could articulate.

  I recently reread the email I sent to all the employees of Disney on my first day as CEO. I talked about the three pillars of our strategy going forward, but I also shared some memories of my childhood, watching The Wonderful World of Disney and The Mickey Mouse Club, and about imagining as a kid what it would be like to someday visit Disneyland. I recalled my early days at ABC, too, how nervous I felt starting there in the summer of 1974. “I never dreamed I would one day lead the company responsible for so many of my greatest childhood memories,” I wrote, “or that my professional journey would eventually bring me here.”