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Walt Disney's (DIS) CEO succession plans have been a bit of a contentious topic -- the lack of progress was a key reason why activist investor Nelson Peltz launched a proxy battle against DIS's Board of Directors this past March -- but the company took a big step forward today. The company announced that its Board intends to replace CEO Bob Iger in early 2026 (his current contract expires at the end of 2026), which is a little later than its original plan of 2025.

That's not the only major change that DIS will be making. DIS also announced that James Gorman, who will be stepping down as Morgan Stanley's (MS) CEO on December 31, 2024, will replace Mark Parker as Chairman of the Board, effective January 2, 2025.

• The shakeup comes as DIS continues to turn the once cash-burning DTC business around. When Mr. Iger took over for Bob Chapek as CEO in November 2022, his most pressing task was to stop the bleeding in DTC as the company was spending very aggressively to keep Disney+ subscriber growth racing higher. For some perspective, two years ago the DTC posted an operating loss of ($1.06) bln. In DIS's latest quarter (3Q25), DTC Streaming posted an operating profit of $47 mln compared to a ($512) mln loss in the year-earlier quarter.
• Mr. Iger certainly deserves plenty of credit for the massive turnaround in DTC, but it hasn't been completely smooth sailing at DIS since he took over. This is reflected in DIS's stock price, which is virtually unchanged since Mr. Iger stepped in as CEO, compared to a 48% gain for the S&P 500. In a role reversal from the past few years, it's now the theme park business that's weighing on sentiment.
• A more cost-conscious consumer has shifted towards less expensive travel and experiences options, putting a dent in demand for DIS's domestic theme parks. Driven by some softness at Walt Disney World and Disneyland, operating income dipped by 3% in Q3 to $2.2 bln, with the company also forecasting a mid-single-digit operating income decline in Q4.
• Whoever steps in as DIS's next CEO will be tasked with improving the growth for the Experiences segment. Helping their cause will be the $30.0 bln the company has earmarked over the next decade for theme park investments.
• Considering DIS's major pivot towards sports, it wouldn't be overly surprising if the next CEO has considerable experience in the professional sports industry or within DIS's ESPN network. On that note, the company has interviewed ESPN Chairman Jimmy Pitaro for the CEO role, as well as Experiences Chairman Josh D'Amaro and Entertainment Co-Chairman Dana Walden and Alan Bergman. As a reminder, DIS plans to launch an ESPN-only streaming platform in late 2025.

The main takeaway is that participants have been looking for more clarity out of DIS in terms of its succession planning, so today's disclosure is a step in the right direction. However, there are still plenty of question marks, such as who may be the front-runner for the position, while DIS still has plenty of other challenges on its plate, such as slowing demand for its theme parks.