Almost any investor and analyst would agree that Bob Iger, Disney's 6th CEO, has been a great leader at the helm of Disney. He took over as CEO in 2005. In his tenure, some of the major highlights include: the 2006 acquisition of Pixar Animation Studios, the 2009 Marvel deal, and the most recent 2012 LucasFilm purchase. Apart from these acquisitions, Iger also oversaw the development of Disney in key markets around the world, such as growth of Disney theme parks in Hong Kong and Japan, and increased distribution of its film and technology around the globe.
Iger has won multiple awards and honors for his expertise as a leader, including being named among Fortune magazine's "25 Most Powerful People in Business," and Forbes magazine's "Top Gun CEOs," and he was named "CEO of the Year" by Chief Executive Magazine in 2014. Iger is also on the board of directors for Apple and the U.S.-China Business Council.
Investors we have appreciated having Iger at the helm of this company, especially with the quadrupling of Disney's stock price during his tenure. We don't want to see him go! But of course he can't stay forever, and we wouldn't want the company to ever stop innovating and growing due to the inability to foster new, competent leadership. So who's next to take the top spot at Disney and how could this affect Disney long term?
A great replacement option
In the last couple of years, there has been a lot of speculation over who would replace Iger, with many potential names thrown into the mix. Most of these possible candidates were from operations and finance teams, most of which had long and successful tenures at Disney, and all of which would have had great strengths and value to add to the company.
However, Disney watchers now have a very good idea of who the most likely candidate is, and I for one am pretty excited about it. The most likely candidate is Tom Staggs, the former head of Disney's theme park and resorts division, who was recently promoted to be chief operating officer of Disney.
One of the most notable successes that Staggs has to date is the growth of Disney's theme parks division that he oversaw since 2010. Disney's theme park segment has been one of the company's best-performing segments in recent years, and in 2014 the segment grew profits over 20% year over year. This recent growth has been mainly attributed to theme park success in the U.S., which is an amazing feat of year-over-year growth for such well-established parks, the first one of which opened more than 40 years ago.
But more exciting than the growth in domestic park visitation and revenue is Disney's new theme park opening in mainland China in early 2016. This new resort, set on nearly 1,000 acres just outside Shanghai, is a total investment of about $5.5 billion. Following the success of the company's Hong Kong park, this new park looks like it will be an even bigger success. The company expects around 25 million visitors in its first full operational year, more than the 18 million visitors in 2014 to Disney's most-visited park, Magic Kingdom in Florida.
Disney is a long-term buy, even without Magical Iger
While Staggs takes over as COO, have no fear that the theme park division will lose its way. The new head of the division is Bob Chapek, a 22-year Disney veteran who had served since 2011 as president of Disney Consumer Products, driving what the company calls "a technology-led transformation of the company’s consumer products, retail and publishing operations." And because Chapek now reports directly to Staggs as COO, the theme park segment will still have Staggs' input while the incredible new resort in China opens.
Before his role as COO and head of the theme park division, Staggs was Disney's CFO and had a major hand in the operations of the media and studio entertainment divisions (the segments responsible for the company's networks like ESPN as well as Disney's feature films). With 25 years at the company, Staggs seems very qualified in to be the one to take over for Iger when the time comes. As a shareholder, I am still bullish on Disney's ability for continued long-term growth.
Bradley Seth McNew owns shares of Apple and Walt Disney. The Motley Fool recommends Apple and Walt Disney. The Motley Fool owns shares of Apple and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.