The Walt Disney Company announced late Sunday that former CEO Bob Iger will return to head the company for two years in a move that stunned the entertainment industry.

Disney said in a statement that Bob Chapek, who succeeded Iger in 2020, had stepped down from the position. Disney board chair Susan Arnold thanked Chapek for his leadership during “the unprecedented challenges of the pandemic.”

She said directors believed Iger was “uniquely situated” to guide the entertainment behemoth during “an increasingly complex period of industry transformation.” Iger, 71, led Disney for 15 years as it absorbed Pixar, Lucasfilm, Marvel and Fox’s entertainment businesses, then launched its Disney+ streaming service. He stepped down in 2020.

Iger said in the statement that he was “thrilled” to return and “extremely optimistic” about Disney’s future.

“I am deeply honored to be asked to again lead this remarkable team, with a clear mission focused on creative excellence to inspire generations through unrivaled, bold storytelling,” Iger said.

Hollywood’s creative community had grumbled about Chapek’s cost-cutting measures and sometimes blunt approach to talent, while theme park regulars had been unhappy with price hikes. Earlier this month, Disney posted lower than expected results for its fiscal fourth quarter.

Chapek faced blowback early this year for not using Disney’s vast influence in Florida to quash a Republican bill that would prevent teachers from instructing early grades on LGBTQ issues. The bill sparked a spat between Disney and Republican Gov. Ron DeSantis.

He was also criticized for his handling of Scarlett Johansson’s lawsuit last year over her pay for “Black Widow,” an unusually public conflict between the studio and a top Hollywood star. The 2021 Marvel film was released simultaneously in theaters and through Disney+ for a $30 rental.

Iger first came to power at Disney when the board ousted its fifth CEO, Michael Eisner, in 2005. The former TV weatherman won over Wall Street and Hollywood with bold acquisitions and public displays of respect for the creative community and the company’s storied history.

Wall Street analysts said Iger’s return is a boost for Disney.

“Over the many years, Mr. Iger’s decision-making and strategic positioning — which ignored the Street’s often incorrect short-term focus — would ultimately separate Disney from the media pack,” Michael Nathanson, a senior analyst with SVB Securities, told investors in a research note. “In addition, his communications skills and his ability to stay focused and honestly optimistic in the face of structural challenges provided a constant ballast in the roughest of media waters.”

Disney shares rose more than 9% ahead of the start of market trading on Monday. Overall, however, the stock has tumbled 41% this year.

Among Iger’s biggest challenges will be making Disney+ profitable. The streaming service has grown fast since launching in 2019, even briefly topping Netflix in a count of subscribers earlier this year, but it continues to lose money because of the high cost of producing content.

Chapek previously said he expects Disney+ to earn money starting in 2024. Yet competition in streaming is fierce, with Netflix looking to boost its market share by debut a low-cost ad-supported service in November.

“Running huge streaming losses and seeking subscribers at all costs worked in the initial days of streaming and the early pandemic years when the market had little regards for the actual economics of the business, but the world is different now,” Adam Crisafulli of Vital Knowledge said in a report. “The reason the most recent quarter for Disney was such a disaster had to do with the huge losses posted by streaming (and the guidance for more red ink to come). Iger will have no choice but to continue with Chapek’s streaming strategy whereby subscriber growth is balanced with price hikes and profitability.”

This story was originally published by CBS News on Nov. 21, 2022.

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