Disney CEO Fired For Lying To Cover Up Failures?
Former Disney CEO Bob Chapek is facing accusations of deceptive financial practices with DIsney+.
Disney recently fired CEO Bob Chapek and the reason is allegedly some shady accounting practices. A report from Bounding Into Comics says that Chapek may have used deceptive accounting to hide how much money the company has lost while developing its streaming platform Disney+. Chapek was ousted from the company on November 20 after the board of directors came to a collective decision to remove him following a terrible Q4 earnings call.
Surprisingly, the company decided to bring back former Disney CEO Bob Iger to the role, after Chapek had only served for a couple of years. Of course, there are other theories as to why Chapek lost his position, including the public issues Chapek had with the Florida Parental Rights in Education Act. Chapek was indecisive in the face of this political issue, causing employees to be disappointed with his initial lack of response.
The Wall Street Journal spoke to insiders who also alleged that the company had lost more than $8.5 billion since the streaming platform was lost. Allegedly, Chapek would air Disney+ originals on other networks owned by the company, so he could list the budgets for those series on the accounting sheets of those networks. This would make it look like the streaming platform was more profitable than it actually was.
While it sounds like there’s nothing illegal about these allegations, it does seem like Chapek was trying to cover up some failures to avoid this eventual ousting. This could make it difficult for the House of Mouse to recover financially in the near future, so it seems like the newly anointed Iger may have some cuts to make. We’ll have to see if the first place those cuts are made is the original content put out by Disney’s streaming platform.
Allegedly, Chapek was spending a ton on content, which is another way he may have been deceiving investors and board members. At Investor Day 2020, Chapek mentioned that the subscriber growth would help to cover content expenses, meaning they would spend between $8 and $9 billion dollars on content in 2024. The insiders allege that Disney has spent $30 billion on content this year alone.
While Disney and Chapek haven’t commented on these reports, it’s not too surprising that the streaming platform has spent a ton of money to get up and running. The marketing for a venture like that alone has to be an incredible sum, not to mention the high price of producing quality content. When you’re competing with major companies like Netflix, Hulu, Apple, and Warner Discovery’s HBO, you know it’s not going to be a cheap market to enter.
Disney also happens to make shows that seem very expensive to make, since they have to keep some of their major IPs alive like Star Wars and Marvel. The shows that they put out for Star Wars and Marvel all have top-notch actors, tons of special and practical effects, and incredible people behind the camera. Paying for the highest production value possible seems like it has been a costly endeavor, and it wouldn’t be too surprising to see the House of Mouse slow that down in the future.
