Bob Iger

Denise PELIGRENI on this weekend edition of Bloomberg Best. You know, I wanted to make sure I was there for him, to help him through what is obviously particularly challenging time. Bob Iger on handing over the range during a pandemic. Get a job on camera, work your way up from there, all the way to you have possibly becoming a network acorn Al, the Walt Disney executive's career began as on air talent. I gave it some serious thought. Actually, post the election of Donald Trump, I gave it a lot

of thought and Iger for president. All this and more coming up in the next hour of Bloomberg Best. All right, and if there's anybody associated with Walt Disney besides Walt Disney himself and of course Mickey Mouse and Donald Duck. Well, that person is Bob Biker, Yeah, Denis, and you know

he's still executive chairman at the company now. We had a chance to hear from him in depth on the David Rubinstein Show Peer to Peer Conversations, and Ker talks about how hard it's been to separate himself from Disneys, his role changes, and also about his political ambitions. David begins here by asking ire about his long and successful run of the world's most well known media giant. During

the time that you were the CEO. The stock market value of the company went up about and the market capitalization about four during that fifteen year period of time. So my big regret is that I didn't vacue and by stock. But um, you must be very pleased with what you accomplished in the fifteen years that you were in the CEO. Yes, I'm proud would probably be the

right word to use. You know, I inherited a company that was renowned and had been quite successful, but also had gone through a period of difficulty on a variety of levels, and there was a lot of work to do. Um, and my soul goal was to not only improve a lot of the company, but to ultimately leave the company in great hands for my successor. But you weren't as successful in leaving the company because you had wanted to

leave a few years earlier. And then the they, the board, said no, you gotta stay longer because you did the uh, the Fox acquisition, among other things. So, um, why were you so good at running the company but not so good at leaving the company? You know? I'm told that that's a common ailment of CEOs that have had decent tenure uh. And I So I failed leaving a few times. The first time we had had a succession process that didn't work out as we had hoped, and so I

agreed to stay on a little bit long. And then the last time was solely due to the largest acquisition that we had ever made, and that was most of the assets of Century Fox. And I knew when I proposed doing that to the board, which was close to when I was supposed to step down, that they would say, well, we will support you in this effort as long as

you agreed to stay. They did not want, and for good reason, to go through a CEO transition just at the time we were making the biggest acquisition we've ever made. It was rumored in the press and in your book that you were thinking of leaving Disney to run for president of the United States. So whoever heard of a businessman running for president United States? So where did you get that idea? From? Crazy idea? Right? Um? Well, there was some truth to that, um, both before the sixteen

election and then after the sixteen election. I gave it some serious thought. Actually, post the election of Donald Trump, I gave it a lot of thought and actually did a fair out of homework to study the feasibility of it. But I'm not sure I would have gotten as far as actually running, because as the realist in me was sinking in, I was starting to think more and more about how difficult the path might be in the Democratic

Party for a businessman to actually get the nomination. What would you say, is the chance that you would be interested in serving in a senior position in a Biden administration? Would that be something of any interest to you? Or you wouldn't want to come to Washington for that kind of thing. Well, I've always thought about what the next chapter in my life might be post Disney, because there will be a post Disney soon. I'm not going to fail.

Stepping down again, uh and giving back in some fashion, serving our country in some fashion is certainly something that I would consider seriously. But a lot of it would depend on, you know, what it is, what the opportunity is, and whether I thought it would be something that I would both be stimulated by and and and be good at.

So let's go back to the Disney situation. Uh, you announced that you're gonna step down finally at the end of two thousand nine become executive chair and then COVID hit comes along, and did COVID make it possible for you to leave as the same way you thought you were gonna be out to leave, or do do you have to spend more time at at Disney when COVID hit, Well, what actually happened was I stepped down, uh from the CEO position as you mentioned, to become executive chairman and

to focus all of my time and energy on our creative process because I thought, obviously what we create is the most valuable product that we have, and I thought that the best thing I could do in terms of um enabling my successor to succeed at the job would hind him a very very rich pipeline of great creativity. Uh And and in fact, I have spent almost all of my time since I stepped into this role doing

just that. Um. However, I also wanted to make sure he was success full in in other respects as well. And he had not handled a crisis that was anything like this, by the way, No, nor had I, and so UM I you know, I wanted to make sure I was there for him to help him through what is obviously particularly challenging time, not only for the world, but very specifically for our company. And I've done just that. So he's been the CEO, he's been running the company

from the day he stepped into that role. UM. I feel confident that he is doing a good job, and we'll do a good job into the future. And I've probably been there for them a little bit more than I might have expected. I think one of the hardest things is in in uh, passing the baton on to

someone else. You know, you expect that you're going to spend some in in in a situation where I was going to continue as an employee and executive of the company, I expected I would spend more time with him, meaning being more physically present as an advisor and as a support for him. That obviously has has not happened. Been

a little bit more challenging. So if somebody was an outsider and they'd say, well, COVID is hitting the United States, hitting other places, the kind of companies that aren't going to do well. Our companies, that say, are in the theme park business, the live entertainment business, the cruise ship business, the hotel business, um, and those are all the businesses that you're in. Yet your stock has really rallied and

and done reasonably well. Why do you think you haven't been as hard hit and financially as you might think on from the outside. I think the reason our our stock has been resilient and the company has been resilient is we were on extremely solid footing as a company going into this, meaning our businesses were all doing well and their prospects for the future were actually quite bright.

And so I think the street has looked at us UM knowing that we've been affected in dramatic fashion by COVID, but also realizing that when it ends, we will have the ability to rebound in a significant way. In addition to that, we had pivoted in a very significant way in the direct to consumer digital entertainment direction, meaning we launched Disney plus, ESPN Plus and in the acquisition of

One Century Fox for a controlling share of Hulu. So we moved into a space that is not only very exciting and in many respects the future of entertainment, but one that invests the investment community is looking at very positively. So how did a nice Jewish boy from New York wind up running Disney? Let's go through that. You grew up in the New York area, Is that right? Yes, it is kind of by the way, it's a pinch, pinch yourself moment. And I grew up in a relatively

modest background, lower middle class. My dad was a well educated man the advertising business, but he suffered from terrible manic depression and it made it very difficult for him to hold a job. My mother became an employee at a high school library junior high school live Rurry later on in my in my childhood, to help, you know, support our family. But it was modest back room. But I but I loved. I never felt poor and I

never felt deprived. Of anything, including love. By the way, my family, your parents didn't say you need to be a lawyer or a doctor or something like that. They didn't say that to you. There was a little bit of a push for me to be a doctor because my mother's oldest brother was. But no, my my father and my mom were pretty good at letting me pursue whatever my dreams were. And my dreams early on were to become Walter Cronkite or a television news anchor person.

I actually became a weatherman when I left Ithaca College for a local TV station there, and that was sort of the start. Get a job on camera and then hopefully work up work your way up from there all the way to you know, possibly becoming a network anchor man. Well, that didn't happen. I lost confidence in myself and my ability to actually fulfill that dream, and so I pivoted and took a job behind the scenes in reduction at

ABC in um the middle of nineteen seventy four. So if you ever thought you could have been outroker if you were really good at being a weatherman, that's true. Yeah, So you know, I I teased every once in a while, I'll go into one of our TV stations or visit Good Morning America, And I warned them that, you know, my next job maybe there's and I may, you know, I may become the weather person on Good Morning America. So initially you were doing some production at ABC and

so forth, but eventually went into the sports area. So did you think your career was going to be basically one day running ABC Sports and that would be the highest that you would have rise to. That would have been fine with me. And actually there are a number of steps along the way that if I had achieved them, you know, would have been absolutely fine with that being kind of the last job. Um, yes, I would have loved to have been president of ABC Sports. Interestingly enough,

I never got that opportunity. The people who had purchased ABC from Capital Cities Communication, Tom Murphy and Dan Burke, actually took me out of that role and sent me out to l A to run the entertainment division of ABC or primetime programming, which is a huge step for me into a an area of the business that I had very little familiarity with. But they believed in me

and gave me that shot. So when you you're doing very well out there, then ABC says, you're doing so well, we want you to come back to New York and kind of help run the whole company. Um, did you want to go back to New York? At that point I did. I was ready. I had done my four and a half year stint at ABC Entertainment. I liked l A, but I was ready to go back to New York. And they offered me the job to be president of ABC, the ABC network. Now you're the big shot.

You are going to be. You're running the whole company. And then all of a sudden, Cap Cities people say, guess what, We're gonna sell the company to Disney. So was that something you were happy with or did you think there was a role for you? Then? Well, it was an incredible time. It was the summer of and UM. I had been told by Tom Murphy, who was in the chairman, that um, it was likely I had become the next CEO. I was CEO, which I thought it

was great. Warren Buffett, by the way, was our largest shareholder, and I thought he had some enough faith in me. But Michael Eisner approached us and made an offer that not only we felt we couldn't refuse, but we thought it was in the best interest to the shareholders of

the company. Turns out we were right. And look, in the back of my mind, even though Michael made it very very clear that they were never going to be a guarantee, I thought, if I played my cards right, if I performed well, I could potentially run the Walt Disney Company something at some point. So eventually, Um, Michael Eisner decides to retire a little earlier than maybe he had thought he was going to retire. The board says, we have to go look for somebody to run the company.

Did they just call you up the next day and say it's your job or did you have to kind of go through a little beauty contest. Yeah, a little beauty contest would be an understatement. We as I mentioned at the beginning of this discussion, we had gone through a tough period of time, um, and the board fell that and rightfully so looking back, that they had to be expensive in their thinking about who the next CEO should be, and and they created a you know, a

true contest. They considered a number of outside candidates, They interviewed outside candidates. They said to me that I was the only inside candidate. But They made pretty clear at the beginning that not only was it not a guarantee, but it was less likely that I would get it because I had been CEO for five years and they they they seemed intent on bringing change to the company because they felt it was needed. UM. And so as the insider, I actually had the outside track, not the

inside track. So eventually they call you up and say the job is yours. And subsequently, as I mentioned the outset, your stock is up about four plus percent and market capps about four plus percent. Did anybody ever call you up and say, hey, we made the right decision. We're sorry we made you go through that process. Did anybody do that? No one said that we're sorry we to

go through the process. Um. They on a number of occasions board members were very generous in their compliments of me and to me about the job that I was doing. I think, you know, looking back, I think they thought they made they made the right decision. And look, I think that the numbers speak for themselves. And the position of the company today is um, you know, far different

than it was back then. UM. And you know a lot of that was due to strategy that was laid out even in the succession process because I discussed some of the things I wanted to accomplish, uh and being able to execute that strategy over the years. In your book, you point to four acquisitions you made. Let me try to go through each of them with you. One of the first ones was pixar UM. You Disney had a

complicated relationship with pixar UM. How did you convince Steve Jobs to sell you Pixar And was that an easy decision to convince the board to buy Pixar and what was thought to be a pretty high price. Yeah, we paid over seven billion dollars for Pixar, And it was

an idea that I had, uh right right away. In fact, I laid that idea on the table to the board in my first meeting at CEO with a company which I'm not sure it's the right way to start, UM, but we had gone through a period of time where Disney Animation had been faltering UM almost a decade and we had a very good um. Uh. We had had a lot of success with Pixar and what was basically a joint venture with them that was ending and Steve Jobs, you know, in a very very um difficult and kind

of in your face manner. UH told us publicly, meaning he made announcement publicly that the Pixar relationship with Disney

would end. I felt that I had to address UH Disney Animation that it needed it needed a huge improvement, and I thought the fastest way to accomplish that, albeit the riskiest and the most expensive, was to buy Pisar, not only to bring pis Are in as part of the company, but bring the executives that would created all the successive Pixar and have them turned Disney Animation around. And that was my pitch to the board, and it

took UM on the board side. It took from October to January January to convince them it was the right thing, and a lot of UM. I used up all the capital I had, and I didn't have much because I was a brand new CEO UM. But I also was able to convince Steve Jobs that it was a good idea. When the notion of buying pis Are came to me, I called him up. I was actually quite nervous. I got him on the phone and I said, I've got

a crazy idea. Can I come up and talk to you about Because I didn't think I should broach the subject on the phone. Well, I don't know how well you knew Steve, but anyone who knew Steve would know that if you said to Steve, I have a crazy idea, he would have to hear it right away. So the notion that I would say that to him and then say, but I'll come up and talk to you, it was ridiculous. And he made me tell him on the phone, like in the minute, what I had in mind. What was

my crazy I deal? He said, well, it's not that crazy. Um, why don't we Why don't you come up and we'll talk about it. And that led to a very very interesting discussion with him on the subject us buying Pixar and Steve becoming the largest shareholder of the Walt Disney Company, a member of our board and a true friend of mine.

That was just a simple result of that process. Right before the Disney board is about to approve the acquisition, he tells you something about his health, that he has his cancer, and returned, so did you ever think about changing the they proceeded proceeding to go forward the deal or not. Actually, we were on the Pixar campus basically preparing for the announcement which Steve and I were going to make, and he said, can we go for a walk.

And he told me that he was going to tell me something that only his wife and his doctors knew, and that was that the cancer that he had had a few years earlier that he was operated on, had come back in a different form, and he wanted me to know it because he wanted me to He wanted to give me a chance to back out of the deal. At that point, I looked at my watch and it was incredible. It was thirty minutes before we were announcing a seven plus billion dollar deal that everybody that needed

to approve it had approved. UM and I. It's not like I had an opportunity to phone anybody and ask for their advice, because he demanded confidentiality. UM and I made a decision kind of on the spot, which is that we were buying Pixar, that while Steve was important in the acquisition because he would become a board member and a shareholder, he was not material to the Pixar

deal itself. And therefore I thought that I was exercising the right set of responsibilities as the CEO of the company, and and and in asking shareholders ultimately to approve a large acquisition. And so while if we went to make the announcement with me carrying that incredibly heavy news inside me, and it was a secret actually that held for a few years that the world didn't know. Um. And that was in early two thousand and six, and he lived

until October of two thousand eleven. So I had the benefit of not only his friendship and his advice in his position on the board, but you know of of the of the wisdom that Steve Job brought to any room, any situation, wisdom and an incredible talent and instinct. How Disney has a lot of characters, Donald Duck, Mickey Mouse, Mini Mouse, so forth. Why did you need to go by the characters from Marvel Entertainment? Um, that's was your

next big acquisition, another comic book series of characters. Why did you feel that was such an important deal? In two thousand and five, when I became CEO, we were starting to see the very very a huge amount of

disruption to our business. And one of the things that mostly thanks to technology, and one of the things that new technology was bringing was an explosion of of what was being produced of creativity, uh, and consumer choice in the in the entertainment field, and I thought that with so much more consumer choice UM, that high quality branded

entertainment would be even more valuable. So after the Pixar acquisition was successful, we created a list of acquisition targets at Disney and they all were consistent with what I just laid out. We were looking for high quality branded entertainment and Marvel and Star Wars were at the top of the list. So you then went to talk to George Lucas and said, by the way, UM, I'd like to buy your company and we will make Star Wars in the future, and you can watch the movie, but

we're gonna make it. Was that hard for him to give up the the create creative control of Star Wars. It was, but again, you know, we saw in Star Wars something that was extraordinary, like Marvel and like Pixar and like Disney, as I talked earlier, and the difference being that George was the creator of it and the soul shareholder of it, and it was really who he was. And I think he explained to me at some point that you know when he passes is he will say

Star Wars creator George Lucas. This was, you know, like you know, selling his birth right. It was an incredibly difficult thing for him. I had a lot of empathy for him, but it was hard. And I don't know whether he has has second thoughts about it. He's never he hasn't expressed that to me, But I would guess that it's worked out really well for him, for his family. It's certainly worked out well for us. I can't speak for him, but I think he's happy with the stock

price increase that he got from from the acquisition. But again, I can't speak for him. Let me ask him about the last acquisition. Um, you know, the ones that you've made, they weren't what I would call bet your company kinds of acquisitions. They were expensive, but they weren't exactly fifty

and sixty billion dollar acquisitions. So when Rupert Murdoch said he might be interested in selling part of his company, Uh, did you worry about if it didn't work out, it could be the end of your job, at the end of your career and things like that. No. Um, Look, I've gone into every one of these acquisitions with the level of confidence that not only were they the right acquisition at the right price that, but that we could execute the vision that we had when we laid out

the reasoning behind the acquisition. Maybe I had too much confidence. I don't know, But so far, so good. So now as executive chairman, Uh, you have a little more free time than maybe when you had the CEO. And if you don't go into the Biden administration? Uh, what are you going to do to top what you've done and to keep yourself energized? I read you just went onto the board of a new food company. What do you

want to do to top what you've already done. I don't really have a need to top what I've done at all. I'm extremely satisfied with what I've accomplished. UM, And you know I wouldn't if I could do it again, I wouldn't change anything, I don't think. So I'm really I'm not looking to do that at all. I'm looking for things that are stimulating, as I mentioned earlier, whether that's in the public or the private sector, I don't know. So have if you considered the high is calling of mankind,

which is private equity as another career. You know, I'm not ruling anything out. I know, I know if private equity has served you extremely well. I've had some feelers from that space, but I've not made any decisions about what I do next. I think that I'm very excited about the next chapter. You know. Um, I'm sure it will be a sorry day for me to leave Disney, because it's been my home for forty six years, almost

forty seven. By the time I leave. On the other hand, there's a whole world out there, and I still have a lot of energy and a lot of huge amount of curiosity, and I'm looking forward to it. That was Bob Iger, current executive chairman and former CEO at Walt Disney on the David Rubinstone Show, Pure to Pure Conversations. And that's it for this hour of Bloomberg Best And I'm Denise Pelly Green. This is Bloomberg.