Disney’s ‘Don’t Say Gay’ misstep threatens to overshadow Chapek’s reign as CEO

Illustration by Alex Castro / The Verge

Disney CEO Bob Chapek was under pressure to speak out against the gay bill in Florida, but he did nothing. He backpedaled after his silence angered employees and advocacy groups. After condemning the legislation, he provoked politicians and started a weeks-long crusade against Disney by right-wing media. The chaos is the latest in a series of public gaffes that threaten to overshadow the tenure of the leader of one of the most powerful entertainment companies in the world.

Bob Iger was replaced as Disney's CEO in 2020 before the Pandemic hit. Problems emerged immediately under the leadership of a Disney executive. Disneyland Resort's reopening plans were protested by Parks employees. The Disney Plus hybrid and straight-to-streaming releases angered both theaters and talent, and led to a messy and very public lawsuit by Black Widow star. The restructure snowballed into an internal power struggle.

Disney has faced upheaval over its handling of the bill in Florida, which resulted in company walkouts as well as criticism by Disney employees and creators and various advocacy groups, including the Human Rights Campaign. It was one of many business decisions that deviated from the way the company was run under the previous leader, and INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals Disney has been the target of right-wing protesters who have called for a Disney boycott.

Disney employees who spoke with The Verge said there was little chance that the company's response to gay rumors would have happened on Iger's watch.

Chapek’s reimagined Disney

It was a pivotal time for the company as a result of Chapek's promotion to chief of Disney. Disney has a lot of content to take on the streaming giants. Disney's direct-to-consumer business is a core part of the company's second century plan.

The shift in leadership style has been felt at every level of Disney, from parks employees to staff and even talent. Disney's entertainment and media divisions underwent a massive reorganization in the year after Chapek took over, positioning Disney Plus as a key revenue driver for the future of the company. Disney said at the time that it would focus on developing and producing original content for its streaming services.

The ability to manage content creation distinct from distribution will allow us to be more effective in making the content consumers want most, delivered in the way they prefer to consume it.

CNBC reported last month that the restructure led to internal power struggles among long-employed executives. CNBC reported that the reorganization caused a burst of internal frustration among Disney employees who no longer controlled the budgets of their divisions, as a result of the failure to consult Iger.

There was a drama about ScarJo. Black Widow was released on Disney's streaming service on the same day it was released in theaters. The company would later be sued by the actress, who claimed that the hybrid release model cut into her box office bonuses. Disney responded by publicly disclosing her salary and framing her decision to collect on expected compensation as callous, a shocking response for a company that had been traditionally accommodating to talent.

Disney Plus launched without ads. Kevin Mayer, Disney's former direct-to-consumer boss, said during an investors event in 2019: "For Disney, for these brands, at this time no ads is the right call." Disney's move into gambling feels like another shift away from the Disney run by Iger, who told investors sports betting would not be a near-term area of focus for The Walt Disney Company.

Many of these decisions can be linked to the success of Disney Plus and its sister services. The Disney bundle adds Disney channels at a discounted price. Disney Plus was launched under Iger, but it will be Chapek who answers for the company's success. The impact of the Pandemic on Disney's businesses, from production to parks to theatrical debuts, only increased the stakes for a CEO over whom his predecessor's shadow looms heavily. It's too soon to say if his strategy will work, but he seems less concerned with alienating employees if he succeeds.

Chapek’s “Don’t Say Gay” misstep

The handling of the Don't Say Gay bill in Florida and his refusal to speak out about it has been the greatest public embarrassment. Disney has found itself at odds with advocacy groups, politicians, and its own employees, who in March staged walkouts over his response to the legislation.

Corporate statements do not change outcomes or minds, as we have seen time and again, according to a memo obtained by Variety. The best way for our company to bring about lasting change is through the inspiring content we produce, the welcoming culture we create, and the diverse community organizations we support.

The situation that unfolded over the past few weeks would have been handled differently if Iger had still been in charge of the company, according to multiple Disney parks employees in Florida.

One worker said that if Iger was still in charge of the leadership, he would have taken a different stance.

It is one of the clearest examples of how the House of Mouse is different from Disney. Disney took a completely different stance to similar legislation in Georgia in 2016 and said it would take its business elsewhere.

By March 7th, Iger had already publicly condemned the bill, after the initial remarks about Disney's silence. The bill would put vulnerable, young LGBTQ people in jeopardy, Iger wrote in a statement. It seemed to me that it could be harmful to kids.

Disney employees and their loved ones are at risk because of this problem, according to parks employees. One person said that the company really succeeds because of all the cast members and employees who make it happen.

The organizers of the Disney Walkout movement, who spoke with The Verge over email, noted that even the leader of the company has spoken out against discrimination. The company said it would stop political donations in Florida.

While Chapek is dealing with internal issues, his flip-flops on the company's position has infuriate people across the political spectrum. While public figures and advocacy groups denounced Disney's handling of the situation, conservative parents have claimed on social media that they'll cancel their Disney Plus subscriptions or boycott Disney parks. Republican lawmakers threatened to take away Disney's legal privileges in the state in a show of defiance. Right-wing media seized on the chance to blast the company after a patently homophobic rally was held at Disney Studios in Burbank last week.

While Disney has publicly said it would like to see the bill repealed, the organizers of the strike say that there has been no communication from Disney's leadership. The group said that Disney employees are frustrated.

The organizers told The Verge that patience can only last so long.

The group maintains that executive leadership has engaged with employees about their frustration with the company, but there was a lack of transparency and awareness among the broader employee base.

The promise of a listening tour has waned, with many feeling left out, because the list was not announced or disclosed. We can't be sure that those most affected by the law were part of the tour.

It is unlikely that many of the management shifts would see Chapek at odds with employees at every level of the company. His mistakes are impossible to ignore.

The contract of Chapek will be up in February of 2023. He will have more than just The Walt Disney Company's bounce-back to answer for next year.