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Vice Media co-founder and CEO Shane Smith
Last week, I went through the possible candidates to succeed John Skipper as the next president of ESPN. There are many well-regarded internal and external candidates. The person who gets tapped for that job will have the opportunity to shine and — potentially — position themselves well to succeed Bob Iger as Disney CEO in 2021.
I concluded that Disney's head of strategy, Kevin Mayer, had the best odds of getting the ESPN job, as he (a) has performed well overseeing a number of key recent acquisitions including the Fox assets and BAMTech, (b) is trusted by Iger, and (c) needs operational experience running a key Disney decision in order to make it on to the short list for the top job one day.
Last weekend, something happened which could potentially have big ramifications both on who gets the ESPN job, as well as the lead position in the Iger succession horse race: The New York Times' Emily Steel published a long expose of sexual harassment allegations against Vice Media's management.
Here are the three problems for Disney with this story:
- It has an existing $400 million investment over two rounds in Vice Media, which amounted to about a 10 percent stake at the time of investment.
- Mayer was responsible for the Vice Media investment and is close with co-founder Shane Smith and;
- It stands to inherit the $70 million Twenty-First Century Fox investment, which was about a 5 percent stake in Vice, as part of its recent $52 billion deal to buy the Fox assets.
Vice has already apologized for the behavior described in the Times article, stating, "from the top down, we have failed as a company to create a safe and inclusive workplace where everyone, especially women, can feel respected and thrive."
It remains to be seen whether this story dies or invites others to come forward with public accusations as has occurred on many occasions since the Harvey Weinstein allegations first came to light.
Regardless, the allegations look bad on Disney, given its large investment in Vice, and on Mayer, who is responsible for all Disney investments and acquisitions. Mayer sits on the boards of Hulu and BAMTech. He is also close with Smith, whether or not he is officially a Vice director.
Prior to these revelations, one could have imagined Vice fitting in with some of the edgier Fox assets which Disney is acquiring as part of this deal (including FX and Hulu). Now, that's up in the air.
It will be interesting to see whether these revelations have any bearing on if Mayer is now considered for the top job at ESPN. On paper, Mayer's resume is solid. Although not every deal he has done has worked out (e.g., Maker Studios), Mayer can credibly point to his involvement in all of the biggest transformational Disney deals. And Iger does trust him.
The Vice article from last weekend potentially might also have an impact on James Murdoch —who is set to have discussions with Iger in the coming weeks about joining Disney once the Fox deal closes. I've previously written that part of Rupert Murdoch's calculus in selling his assets to Disney might have been to put James in a good spot to potentially succeed Iger in 2021.
Don't forget that it was also reported last week that Bob Bowman had been forced out of MLB Advanced Media (which spun off BAMTech) following 10 years of allegations of inappropriate behavior on the job. Before this was known, Bowman's name had been mentioned as a possible candidate for the ESPN job. And the Boston Globe ran an article about ESPN two weeks ago alleging the network's problems with women "run deep." So this is a particularly sensitive time for Disney to make this leadership selection.
Iger is likely to weigh all these new wild card factors as he ruminates on who should get tapped as Skipper's successor at ESPN. Whoever gets that job will have a great stage to show off their skills to succeed Iger as the head of Disney in four years from now.
Mayer still may well get the top ESPN job. However, that likelihood is cloudier than it was a week ago.
Clarification: An earlier version of this story said that Bowman was forced out of BAMTech. He had specifically been at MLB Advanced Media, which spun off BAMTech.
Disclosure: Affiliates controlled by Eric Jackson have long positions in DIS.
Disclosure: Comcast, which owns CNBC parent NBCUniversal, is a co-owner of Hulu.
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