Why Disney brought back Bob Iger and booted his replacement.

In a twist worthy of a Hollywood screenplay, the board of the Walt Disney Company ousted chief executive Bob Chapek on Sunday and replaced him with a familiar face: Bob Iger, the popular executive who ran the company for 15 years and stepped aside two years ago.

Iger is widely considered entertainment industry royalty, celebrated for his management acumen and creative chops. He turned Disney into a global powerhouse by acquiring marquee brands such as Pixar, Marvel, Lucasfilm and 21st Century Fox.

In contrast, Chapek’s tenure at the helm of Disney was rocky, starting off with the turmoil of the pandemic and culminating last month in a dismal fourth-quarter earnings report that rattled Wall Street.

Iger was clearly not going to let his Magic Kingdom crumble — and evidently, Disney’s board saw him as their white knight. How did we get here?

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Covid crisis, ‘Black Widow’ battle

Chapek took the reins at Disney in the early days of the pandemic, an unprecedented calamity that forced him to close the company’s world-famous theme parks, pull blockbuster movies from multiplexes and shut down other operations.

In the second year of the pandemic, when many consumers were still nervous about returning to theaters, Disney decided to make certain movies available to rent simultaneously on its streaming service — including Marvel’s “Black Widow.”

The move infuriated “Black Widow” star Scarlett Johansson, who filed a lawsuit against the company and argued that the simultaneous release ate into the film’s theatrical box-office revenue and deprived her a substantial cut of the ticket sales.

In a sharply worded statement that raised eyebrows in Hollywood, Disney said the lawsuit was “especially sad and distressing in its callous disregard for the horrific and prolonged global effects of the Covid-19 pandemic.”

Disney and Johansson ultimately settled the suit on undisclosed terms, but the episode signaled to many in the entertainment industry that Chapek was not as deft as Iger when it came to managing all-important relationships with megawatt talent.

Florida fiasco

Nearly two years after taking over, Chapek became entangled in a public relations snafu that angered employees and made the corporation a magnet for criticism from people on both sides of America’s sociopolitical divide.

In March, the state of Florida, home to Orlando’s Walt Disney World, enacted a measure that bars instruction on sexual orientation and gender identity in elementary schools up to third grade, a law that opponents called the “Don’t Say Gay” rule.

Initially, Chapek tried to avoid directly criticizing the bill. But when employees inside the company rebelled, Chapek apologized and vowed to take a more forceful stand in defense of the LGBTQ community.

“It is clear that this is not just an issue about a bill in Florida, but instead yet another challenge to basic human rights. You needed me to be a stronger ally in the fight for equal rights and I let you down. I am sorry,” Chapek said in a letter to employees.

But that apology set off another round of criticism, this time from conservative media outlets and Republican politicians — including Florida Gov. Ron DeSantis. Right-wing activists called for a boycott of Disney for being — in their minds — too “woke.”

In late April, DeSantis went even further, signing into a law a bill that would officially strip Disney of a special self-governing status in the area around its Orlando theme parks.

Chapek’s original stance on the “Don’t Say Gay” measure was seen by many observers as a stark reversal from the more openly progressive Iger era. Chapek’s response to criticism was similarly viewed as a rare public relations nightmare for a family-friendly company.

Financial woes, Wall Street worries

Chapek was not the only media executive grappling with tough economic headwinds and the effects of inflation. Paramount, NBCUniversal and WarnerMedia are also trying to figure out how to adapt. (NBCUniversal is the parent company of NBC News.)

But for investors who saw Disney as a reliable part of their portfolio, the company’s recent balance sheet troubles were cause for concern. Shares of the Walt Disney Company are down 40% this year, and layoffs are pending.

Two weeks ago, Disney announced lower-than-expected profit and revenue for the fiscal fourth quarter, sending shares plunging. The company’s direct-to-consumer division (which includes Disney+) reported a staggering $1.5 billion in losses for the quarter.

Chapek, for his part, reportedly baffled investors on the earnings call with what The New York Times described as a “happy-go-lucky tone.” In short order, CNBC host Jim Cramer called for his ouster. (NBC News and CNBC are both units of NBCUniversal.)

The battle of the Bobs

Iger, who chronicled his years at the top of the Mouse House in the memoir “The Ride of a Lifetime,” delayed retirement multiple times near the end of his initial run at Disney. When he finally decided to step down, Chapek was his handpicked successor.

But almost immediately, the entertainment industry press zeroed in on what was thought to be a frosty relationship between the two men. Matthew Belloni of Puck wrote in his Hollywood-focused newsletter just last week that the executives “don’t get along.”

Disney’s board seems keen on making sure the succession decision goes more smoothly next time around.

Susan Arnold, the board chairman, wrote in her statement that Iger has signed up for two years, “with a mandate from the Board to set the strategic direction for renewed growth and to work closely with the Board in developing a successor to lead the Company at the completion of his term.”

“Mr. Iger has the deep respect of Disney’s senior leadership team, most of whom he worked closely with until his departure as executive chairman 11 months ago, and he is greatly admired by Disney employees worldwide — all of which will allow for a seamless transition of leadership,” she added.