Former Morgan Stanley boss James Gorman will take charge as chairman of media major Disney

This former Melbourne boy and Wall Street boss is now in charge of steering Disney through one of the toughest succession stories in corporate America.

Morgan Stanley CEO James Gorman photographed at the banks's headquarters in New York City on February 20, 2018. Picture: Michael Bucher / Wall Street Journal

A banker from the suburbs of Melbourne has been given the responsibility of steering Disney through one of the toughest succession dramas in corporate America.

Former Morgan Stanley boss James Gorman will take charge as chairman of media major Disney next year and his first job will be to find a replacement for two-time chief executive Bob Iger.

For the 73-year-old Disney CEO, hanging up his career has been the hardest thing to do.

In late 2022 he was famously lured out of retirement back to the role he held for years after his anointed successor Bob Chapek quickly fizzed out.

Costs were spiralling and Disney was losing its sparkle – as well as billions of dollars – in the streaming wars. Iger was recalled for another four years to right the media major as well as find another successor.

Long-serving Disney chief executive Bob Iger will retire for the second time in 2026. Picture: AFP

During his first time around running Disney Iger had delayed his retirement as many as four times and stayed on as CEO for 15 years.

Investors had become hooked on Iger who, during his time had made a series of company changing acquisitions including Pixar, 21st Century Fox as well as Lucas Film that delivered the Star Wars franchise to the magic kingdom.

Gorman faces the weight of history too. Disney itself has a history of troubled succession planning, even Iger’s own appointment came about as a result of a boardroom battle that ultimately pushed out former chief executive Michael Eisner in part for failing to develop a clear succession path.

Iger’s second time running Disney hasn’t been met with the same share market success as the first stint, however it has also coincided with serious disruption through broadcast and streaming media.

Iger was among the first to pull back on spending as the streaming content wars were nearing their peak.

He too sought profit over reach for streaming, including leading the way with a series of price hikes. He also questioned the business model that set up a platform where consumers could binge on unlimited content then disappear. It was unsurprising that customer churn rates were pushing so high.

After two years of slashing costs and repositioning the streaming platform, in the June quarter the Disney+ streaming business posted a small but symbolic profit. All eyes will be on the next quarterly update in November.

So why pick James Gorman?

The Morgan Stanley boss delivered a textbook succession when he retired from his former bank last year.

Gorman had been in the role for 14 years and had rebuilt the Wall Street bank from a lender that was reeling from crisis during the GFC to a safer, confident bank of scale.

The obsessive Collingwood fan left Melbourne in the 1980s to make it in New York and quickly found his way in banking.

As well as an obsession with risk management, at Morgan Stanley Gorman was renowned for his focus on building long-term returns.

The Disney+ streaming platform is now making a profit. Picture: AFP

It was a major test when Morgan Stanley handed the job over to Gorman’s internal successor Ted Pick but investors barely blinked.

In a further boost, Morgan Stanley shares are up 25 per cent this year, although the lower interest rate environment is helping.

Gorman was appointed to the Disney board earlier this year and even at the time was expected to quickly take charge as chairman.

He replaces Mark Parker, who is also chairman of Nike. It was Parker who oversaw the transition from Iger to Chapek and then back to Iger

On joining the board, Gorman led the board committee tasked with finding a new CEO – this was a signal that Disney was determined to get succession right.

In the appointment Disney has put a signal to the market that Iger will retire once and for all in 2026. This gives Gorman a long runway to search and test candidates. After a career on Wall Street, Gorman will be well aware that the one thing a chairman does that really matters is hiring the right CEO.

In a speech in Melbourne last year Gorman said a board has two jobs. The first is managing the CEO and the second job is overseeing everything else.

The first is much, much more important than “the everything else”, he said in the speech.

Indeed Gorman who has limited experience in media will be tasked with overseeing and potentially reigning in an incredibly powerful chief executive – albeit one who is at the end of his career.

The key for Iger’s successor will be how Disney plans to keep growing the audience on its platforms in the face of further disruption. And while AI is in its relative infancy, the technology has the potential to fundamentally change the entertainment business model in the years to come.

For studios, this represents the ability to cut costs, but it also offers far more choice for consumers.

So too Disney needs to work how all of its content arms from movies, cable platforms such as ESPN and television and streaming fit together.

Now it’s all up to Gorman to write the sequel.

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