FX168 Financial Press (North America) — James Gorman will replace Mark Parker as Disney's board chairman starting January 2, and the succession process is often marked as a “key priority” for the new year.

Gorman oversaw his succession process at Morgan Stanley and first joined the Disney board in February — just two months before the company successfully thwarted activist investor Nelson Peltz. He has been leading Disney's succession planning committee since August.

Earlier, there were rumors that insiders, including Disney Entertainment Co-Chairs Dana Walden and Alan Bergman; Disney Parks and Experiences Director Josh D'Amaro; and ESPN Chairman Jimmy Pitaro, may be the next to succeed Iger.

Macquarie analyst Tim Nollen said I think they are actively looking outside. “Of course James Gorman is an outsider. He only joined the board a year ago, so I'm pretty sure they'll actively look outside of the company.”

Succession, Part II

According to a recent Wall Street Journal report, Disney is contacting a group of external candidates, including Electronic Arts (EA) CEO Andrew Wilson. EA did not respond to Yahoo Finance's request to comment on the rumored discussions. According to the media, at least two other external candidates are also considering top positions.

Historically, Disney almost exclusively recommended internally, and the last three CEOs rose to the top media companies.

Nollen said it was in their nature to do things this way. “But Disney is a big, huge company, and internal candidates run their separate individual divisions rather than the broader Disney.”

“So, can a person who runs a park also run an internet network? Can people who run streaming media or ESPN run parks too? I don't know if this is the best move,” he warned. “I'm not saying it isn't. I just don't know what the best move is.”

According to the Wall Street Journal, up to that point, Disney had discussed a dual CEO strategy, which worked well for rival Netflix (NFLX). But this situation could soon unravel, as Disney's leadership team has not traditionally operated under this structure.

Nollen said the reason Netflix was able to do this is because they all grew up together this way. “I'm not saying Disney [isn't capable], but I don't know if internal top candidates are being promoted in the same way.”

After Bob Chapek's succession disaster almost five years ago, finding the next CEO has been one of the company's top priorities.

Iger said earlier this summer, “I think it's safe to say that I've been considering [CEO succession].” “I can say 'I'm obsessed with it' is probably an understatement; in fact, when I came back, the board and I determined that it would be one of our biggest, if not our biggest [priorities].”

Chapek was carefully selected as CEO by Iger in 2020, but was fired in November 2022 after less than three years in office. This period was disrupted by political struggles, A-level talent issues, and controversial restructuring.

Speaking about returning to his role as CEO, Iger told Ripa, “I have no intention of being pulled back.” “I owe it to this company, it meant a lot to me, treated me well, answered the phone.”

Since Iger's return, Disney has faced some tough times, particularly as the industry tries to move away from linear TV.

Creative challenges at the box office, fundamental changes to ESPN, and antitrust barriers to its upcoming sports joint ventures, and other difficulties are putting pressure on the company's long-term prospects for investors.

Although the stock has recovered from last year's multi-year low, the stock is still underperforming the broader market. Since the beginning of the year, the stock price has risen by about 25%, while the S&P 500 is up 27%.

As prices rise and demand falls, shareholders are also increasingly concerned that the Disney theme park business may slow down. In August, the company's performance in domestic parks fell short of expectations. In the three months ending June 29, profits fell 6% year over year.

These trends reversed in the most recent quarter, but pricing the park will continue to be a challenge as new competition from Comcast (CMCSA) Global threatens sales.

Meanwhile, over the next five years, cruise ships will be a lucrative opportunity — and will serve as another area of business that the incoming CEO must drive.

But overall, Disney's strategy has been decided thanks to Iger's return.

Nollen said the next person just needed to come in and carry things the way Iger set it up. “It's simple: don't let the wheels fall off.”