According to a new report, recently ousted Disney CEO Bob Chapek is alleged to have engaged in a series of deceptive accounting practices in order to hide just how much money the company has truly lost in service of developing their signature streaming service.
As per a collective decision by the House of Mouse’s board of directors following his poor showing during the company’s disastrous Q4 earnings call, Chapek was removed as the Disney’s CEO on November 20th, having served in the position for only two years.
In his place, much to everyone’s surprise, the board chose to reinstate former CEO Bob Iger.
“The board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the company through this pivotal period,” explained the board’s chairman, Susan Arnold, in a statement provided to the media. “We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic.”
Though word on the exact reasons for the board’s loss of confidence in Chapek have not been publicly detailed, many have speculated that it was related to his abysmal handling of the Florida Parental Rights in Education Act debacle.
Between turning Disney into a full-on political entity, constantly flip-flopping on which side of the debate he truly supported, and basing his moves on the ever evolving whims of Twitter’s trending topic tab, Chapek’s ineffective and indecisive leadership during this period has since drawn widespread criticism and mockery from across the political spectrum.
But it seems that Chapek’s wild ride in Florida was not the sole reason for his removal, as the former CEO is also said to have been actively deceiving its investors.
During the company’s Investor Day 2020 presentation, Chapek assured those in attendance that the company expected “Disney+ to achieve profitability in fiscal 2024.”
However, as per insiders who supposedly spoke to The Wall Street Journal, this is a near impossible goal to achieve due to the fact that the company has, in reality, “lost more than $8.5 billion since Disney+ launched and has posted bigger operating losses in each of the post four quarters.”
Further, in order to keep the warning signals from blaring, Chapek allegedly took to airing some Disney Plus originals, such as The Mysterious Benedict Society and Doogie Kameāloha, M.D, on the company’s other networks.
In doing so, Chapek could then list a given series’ budget on the respective network’s accounting sheets, thus making Disney Plus look more profitable than it truly was.
This pitfall is said to have been the result of Chapek’s unfettered spending on content – another subject on which the former Disney executive supposedly deceived investors on.
While speaking at the aforementioned Investor Day 2020, Chapek assured attendees that in light of “subscriber growth fueled, in part, by an increased level of output for Disney+”, the company expected “our content expense to be between $8 and $9 billion dollars in 2024.”
Yet, The Wall Street Journal’s insiders claim that “under Mr. Chapek, Disney has increased its content spending dramatically—to around $30 billion this year alone.”
As of writing, neither Disney nor Chapek have offered public comment on The Wall Street Journal’s allegations.